The City of Edmonton released four key financial reports Thursday that will begin the 2021 operating and capital budget discussions.
“Balancing the budgets was not achieved without sacrifices,” interim city manager Adam Laughlin said, referencing the layoffs, budget and service adjustments the city was forced to make in May.
The COVID-19 pandemic has had a huge impact on the city’s bottom line. In order to hold the budget at current levels, $64 million in savings will need to be found.
City administration is proposing $56.5 million in program changes, efficiencies, facility closures and other reductions and $7.5 million in other financial strategies.
However, administration is proposing a zero per cent tax levy increase, down from the previously approved increase of 3.2 per cent. This would be the lowest tax increase since 1997, which was also zero per cent.
“We recognize the economic impact that the pandemic has had on Edmontonians and we’re listening,” Laughlin said.
“These proposed amendments represent our commitment to continue building our city while finding savings to protect our financial position.”
He said the $56.5 million in proposed budget reductions would come from a combination of revenue increases, expense reductions, closures and service reductions, including closures or operating hour reductions at city facilities like rec centres, pools, arenas and transit service reductions (during non-peak hours) and in terms of fleet facilities and management.
The reports also recommended cutting 338 full-time equivalent city positions, including 108 in supervisory or middle management roles.
“The proposed budget will mean some service reductions and some corresponding staffing reductions,” Laughlin said.
He said city officials spoke with staff over the phone Thursday to provide them an update on the proposed budget adjustments and impacts to them.
The reports suggest $9.7 million in savings could be found in “efficiencies,” through adjustments in service delivery within the city corporation and externally to citizens.
It suggests $6.4 million in savings could be found through “expense reductions,” meaning cost-control efforts within city operations, including reducing contracts, professional services, travel and training.
They suggest $1.4 million in savings could be found through “facility closures.” This is based on the Reimagine Services approach the city asked administration to look at facility closures and reductions.
They suggest $6.4 million in savings could be found through reductions in “funding to partners,” meaning fewer grants or operating support to community partners.
The reports recommend $1.2 million in savings could be found through “increased revenues/recoveries,” $13.2 million through “service level reductions,” and $18.2 million through “workforce strategies,” including vacancy management, personnel reductions, overtime reductions, consolidating work.
“Our careful financial management has ensured that we have maintained a secure financial footing despite the impacts of the COVID-19 pandemic,” said Mary Persson, Chief Financial Officer for the City of Edmonton.
“Although any service reduction will be felt in the community, we worked to limit these effects. We know that Edmontonians expect sound financial management. We have looked for ways to balance our spending to ensure current and long-term financial sustainability to support the ongoing priorities of council.”
These reports are recommendations only. They have not yet been approved by council.
Councillors will be presented with the draft budget on Nov. 18 and there will be a public hearing on Dec. 3. A COVID-19 2021 financial update and funding strategy report will be presented on Dec. 9. Council deliberations on the draft budget will take place Dec. 9 and 11.
Laughlin said it’s hoped final decisions will be made by the end of the year.
The operating budget deals with the day-to-day costs of running the city, including road maintenance and public transit, police, water and drainage, waste management, social and leisure activities. These services are paid for through city revenue, including property taxes, utility rates and user fees.
The capital budget is for major infrastructure, including roads, bridges, rec centres, fire halls, police stations and libraries. These projects are funded mostly by provincial and federal grants, the city’s investment income, developer fees, local improvement fees and debt financing.
In June, city council voted to look at reducing the Edmonton Police Service budget by $11 million starting next year. The money would be redirected to community resources and initiatives.