Member Message: City of Red Deer Budget

November 25, 2024
 
Dear Red Deer District Chamber Members,
 
I want to take a moment to address the recent budget decisions made by Council of the City of Red Deer, and the implications they will have for our business community and taxpayers.
 
Overview of Budget Decisions
 
Capital Budget
On Monday, November 18, 2024, City Council unanimously approved the 2025 Capital Budget in the amount of $88,939,000, along with unanimous approval in principle of the 10-year capital plan, which proposes annual spending of approximately $148 million.
 
The City’s Capital Budget is funded through various sources, including the Capital Projects Reserve, along with on-going and one-time federal and provincial grants and funding programs. In recent years, those funding sources have continued to decline, and The City’s ongoing capital needs are outpacing external available funding.
 
Operating Budget
On Thursday, November 21, 2024, City Council approved the 2025 Tax Supported Operating Budget with a vote of 5 for (Mayor Johnston, Councillors Buruma, Jefferies, Lee, and Wyntjes) and 4 opposed (Councillors Barnstable, Doerksen, Higham and Krahn).
 
City Administration proposed a 2025 Operating Tax Supported budget of $512,371,612, with just over $18 million in changes required to balance the budget.
 
Through a series of amendments to the budget, Council adjusted this amount to $16,811,822.
 
Key aspects of the overall 2025 budget include:

• Municipal Property Tax increase of 10.5% to generate the $16,811,822 needed to balance the Budget.
• Maintaining services were available, with some service level decreases
• Maintaining core infrastructure.

1. Financial Impacts:
   • Taxpayers will face a property tax increase of 10.5%, representing an increase to the average household valued at $350,000 of $22.75 per month.
2. Service Adjustments:
   • This budget focused heavily on maintenance of existing infrastructure and services, and in fact, some service level decreases will be realized. Funds for public engagement, postponement of establishing operational washrooms at Sorensen Station and reduction of funds directed to the fleet reserve, while community associations will receive an increase in funding through the Neighbourhood Activity Grants, and The Red Deer Symphony Orchestra will be receiving ongoing operating dollars.
3. Opportunities and Challenges:
   • While some decisions may address long-term financial sustainability, they also highlight the need for enhanced efficiency in municipal budgeting which the City plans to address with a Financial Framework. Many of the budget requests that have been deferred will be brought back to future budgets.

• Water: Increase by 6%
• Wastewater: Increase by 6%
• Waste management:
  • Waste management facility: Increase by 2%
  • Collection: Increase by 5%

• Brought together a Business Focus Group to meet with City Administration to review The City’s proposed budget and bring forward insights on behalf of the membership to emphasize the importance of minimizing tax increases, reducing operational inefficiencies, and focusing on core service provision].
• Conducted a survey to gather member feedback, sharing the questions posed to the focus group by The City, ensuring your voices are represented in our advocacy efforts.

• Submitted a formal recommendation to City Administration advocating for The City to immediately cut operating expenses by 3% to mitigate the anticipated tax increases. This reduction reflects an understanding of the economic realities faced by businesses and residents alike and will support the lowest tax increase for Red Deerians possible.

• Continuing to advocate for fiscal responsibility and policies that foster economic growth while focusing on the provision of core services.
• Engaging with municipal leaders to ensure the business community’s needs are prioritized.
• Supporting our members with resources and information to navigate these changes.