Edmonton council gets 2014 budget preview

EDMONTON – Thursday, Edmonton city council began debating what the proposed tax increase should be for the 2014 budget.

There is no sets number for the tax hike, but the current increase is in the five per cent range.

That number includes a 1.5 per cent increase for neighbourhood renewal, but there are a number of other elements behind the increase.

“Police and fire, they cost us a lot of money. Transit, roads, snow removal.”

Mayor Stephen Mandel lists off the realities of operating a city.

“People complain we didn’t have enough snow removal. Well, we’ve increased that to about $60 million a year,” he explains. “There’s nothing free.”

Thursday, city council got to take a first look at the 2014 budget. As in years past, it has already become the subject of much debate.

“I’ve seen this so many times now,” said Ward 11 Councillor Kerry Diotte. “We get the high figure and then we have to fight and scrap over various things. Why not just come in at something like the rate of inflation at the minimum. I mean, I’ve had seniors on the other end of the phone crying about tax hikes because they’re the people who it most impacts.”

Tony Caterina argued against a zero per cent tax increase.

“Doing nothing, we get zero,” said the Ward 7 councillor. “And I think that we had this conversation – or it comes up all the time – that the decades of doing zero certainly look good at the moment, but future councils – which this one happens to be; that future council  that inherited all the zeros in the eighties and nineties…”

“You inherited quite an infrastructure deficit, yes,” finished Chief Financial Officer Lorna Rosen.

However, this year, the debate will likely be especially political ahead of October’s municipal election.

“I think the discussion over the summer here will naturally be a little bit more political,” said Councillor Don Iveson, “but the council will come back after the election and have to wade through this, and it won’t be politics, it will just be fatigue and compression that make the budget more complicated for the new council in the fall.”

It is believed Iveson might throw his name in the mayoral race. He has not yet revealed his political intentions.

Determining how much to raise taxes is always a balancing act for council; weighing the financial burden on citizens with the desire for services and maintaining infrastructure.

“The big hit in this budget is rec centres, libraries, LRT, and keeping the pace on neighborhood reconstruction,” explained Iveson.  “We could stop doing all those things, and go back to zero per cent, but that’s not what citizens are telling us they want.”

New infrastructure projects include a new fire station in the west end, a major recreation centre in Clareview and another in The Meadows, and the Metro LRT line. Plus, the city has contractual obligations and inflation to consider.

“We’ve had an infrastructure deficit, but we’ve also had a service level deficit as well, when you look at the zero per cents we’ve had over a number of years,” said Councillor Karen Leibovici, who is also rumoured to be running for mayor.

She said, in years when council decided on a zero per cent tax increase, the city suffered a lack of basic services, including police officers and fire fighters.

“The city doesn’t have a profitable business in the sense of services we deliver,” added Mandel.  “They’re all subsidized by taxes.

“There’s always ways to lower costs.  You can flatten out the organization a little bit, less administrative costs… There’s always ways to decrease cost, but do citizens want less service? From what I gather from people when we have our annual meeting… 98 or 99 per cent want more service…. and a few people want things cut.”

Rosen says the city has done quite a good job reducing costs in recent years.

“We do have a continuous improvement program in place, where we do look at our business processes around the functions of the city, and we do try and make improvements every year,” she explained.

“Between 2010 and 2013, we actually managed to take $168 million in net requirement out of those budges largely through increased productivity, and efficiency and reallocation of cost.”

“Taxes would have been 16 per cent higher if they hadn’t done that,” added Iveson. “So they’re working to do that, and they’re going to find additional efficiencies for this year too. I think they could a better job of telling us what they are and showing the taxpayer, but they have found efficiency, and they should be commended for that.”

Council members will debate the issue again in July, when they will present the number they would like to see for the proposed 2014 tax increase.

However, it will be the next council that will ultimately decide what the final number will be.

That debate will take place in November, after a new council is elected.

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With files from Vinesh Pratap