July 3, 2019 4:58 pm

Edmonton City Council wants budget changes as it faces economic headwinds

A photo taken at an Edmonton City Council meeting on Jan. 22, 2019.

Global News

Amid warnings that Edmonton’s economy is facing headwinds, city council is trying to batten down the hatches on city spending.

Councillors spent Wednesday morning discussing a new way for city financial staff to prepare the massive capital and operating budgets every four years.

“This is going to be a more intentional budget process,” said Councillor Michael Walters, who had asked for the report late last year when city council was in the midst of the last budget process. “Our spending will be driven by our priorities, as opposed to being mostly driven by previous spending.”

Watch below: (From April 30, 2019) There was some frustration at Edmonton City Hall as councillors debated how tax dollars are spent and as all the little requests added up. One councillor voiced concerned as council passed the 2.6 per cent property tax increase. Vinesh Pratap reports.

Walters is convinced the current system leads to systemic budget increases without asking about spending on individual programs on an annual basis.

“This is the cycle I feel we’ve gotten into,” he said.

“Last year’s budget drives next year’s budget, which drives the budget after that, and there’s not enough focus on understanding what council wants.”

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A pilot project on priority-based budgeting will be presented to city council in November. Deputy city manager Stephanie McCabe said running a pilot will allow staff to see what works, and what doesn’t, ahead of the next full budget cycle in 2022.

READ MORE: Calgary city council votes in favour of $60M budget cut and $70M in tax rebates

“For me, this is about the next four-year cycle… so we can pilot some approaches here that would help us budget differently when we’re making $16 billion worth of decisions three years from now,” Mayor Don Iveson said.

“We’ve got some $100-million decisions to make between now and then. If we can take a priorities-based approach to that, then that’s helpful. But I see this building towards the next big budget.”

Iveson said this will make expectations clear.

“The question is, could we be more explicit about that priority exercise before administration tries to read council’s tea leaves and bring us their best guess at our priorities?”

READ MORE: Edmonton city council to study savings strategies as budget debate ramps up

Councillor Mike Nickel said he feels the realization that city council has a money problem is a bit rich, after he said they had the chance last November to reign in spending.

“Council gave us the priorities, and what happened? Council went ahead and spent hundreds and hundreds of millions of dollars in new projects, raised taxes and voted for those things,” Nickel told reporters. “I get that. But you don’t get to come back today and say it’s a problem. I just find that hypocritical.”

“This is the line I keep hearing: ‘Stop talking about gondolas, bike lanes, funiculars, 30 km/h speed zones, and get to fixing the budget.'”

Nickel said he worries that Edmonton is one year behind Calgary, and will face a massive budget crunch unless it gets spending under control.

“The tough decisions are right around the corner,” he said.

“What we’re really waiting for is the provincial budget.

READ MORE: Less snow helps City of Edmonton save $64M in operational costs

“Twenty-seven per cent of our GDP is dependent on government of some kind, be it provincial or federal. It’s government-related jobs. So when those cuts come, that’s why I say we might be a year behind where Calgary is in terms of the damage.”

City manager Linda Cochrane said a priority-based model is better than a zero-based budget because they’re not in the position to start from scratch.

“When you start from zero, it’s like Sim City,” she said. “If you weren’t already here, how would you build it?”

City staff aim to find two per cent savings each year, reviewing operations to find less expensive ways to deliver services.


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