2019 Budget Update & Year End

It has been a very busy year, particularly since the Government of Alberta released their budget in October. As I’ve mentioned in the past (found in blogs here, here and here), the provincial budget reductions were not a surprise, and I expect that there will likely be more cuts in the spring. 

 

If Council made no changes to its own budget, the Provincial cuts would have required a difficult 4.3% tax increase, an unpalatable increase from the current 2.6% rate. This is what Calgary did, and they passed a 7.5% residential tax increase.

Over the course of our budget deliberations, after hearing from many concerned citizens from across the city, Council re-assessed and settled on a 2.1% property tax rate. Lower than the previous 2.6% but in my opinion, not low enough.  

Without the provincial cuts, the property tax rate for 2020 could have been 0.3%.  But without the provincial cuts, I am not confident that Council would have felt the same pressure to achieve 0.3%. 

I don’t think 2.1% in 2020, and 7% over the next 3 years, is good enough.  While City Administration did some good work to provide Council with options, we cannot manage the City in the same way we have for decades,  and hope the economy is better next year or the year after.  

If nothing else, it is clear the province is on a multi-year path of significant financial correction, and that will have ongoing impacts to Edmonton’s budget.  Besides, even in the best of times, there is no reason to spend one more dollar than we absolutely have to.

 

Planning for Budget 2021 

I had intended to push much harder for corrections to our 2020 workforce budgets.  But because of circumstances related to our ongoing labour agreements, this was not possible.

While I reluctantly supported the budget, I also gave Council notice that I intend to bring a motion in January to look at options for reducing our workforce budget by 5% in 2021.  By bringing this to Council for a discussion and vote at the start of 2020, this will give Administration plenty of time to look at options for thoughtful 2021 adjustments, to start the transformational change that our taxpayers want to see, and to align our spending decisions with the decisions being made in our homes and businesses every day.  It’s time to change our spending habits, and we cannot wait until the 3rd or 4th quarter of 2020 to have that discussion.

It can seem easy to talk about job cuts or salary reductions when talking about numbers, but budgets are about people.  Our citizens. Employees of the city. Taxpayers.

There are a lot of people hurting, wondering how they will afford Christmas, the next grocery bill, rent or mortgage payment.  I have been in the position of laying off long-term employees simply because the organization could no longer afford them. So I do not make this suggestion lightly.

Personnel costs are projected to be over $1.6B in 2020 or 53% of our operating budget. A 5% reduction would take our workforce budgets to 2016/2017 levels. While this is not trivial, I do think it is a reasonable goal.

I do not believe it is the job of City Council to tell our City Manager where to find the 5%. I would challenge our City Manager and the leadership in this organization to take creative approaches.  Job sharing, voluntary retirement, voluntary salary reductions and unpaid vacation days are all examples. In previous roles as an executive in this position, I appreciated the opportunity to find my own solutions to a difficult challenge.  I believe we should empower our senior leaders to find their own solutions.

But not taking action means continually increasing property taxes year over year, yet another hit on individuals and businesses struggling to live within their means. And I can’t support that.

 

Terwillegar Drive Upgrades Approved … Again!

I’m very happy to say that for the 2nd time, the Terwillegar Expressway upgrades have received unanimous approval from City Council.  Why did Terwillegar need another vote? The 2019 Alberta provincial budget eliminated the Alberta Community Transit Grant which provided $24.6M to Terwillegar Drive and represented about 20% of the funding for the upgrades.

After losing the provincial funding for this project, City Administration proposed alternative staging for the expressway design.  That alternative staging will focus work on the Terwillegar / Whitemud interchange, the Rainbow Valley Bridge, and Terwillegar Drive widening from the Whitemud to Rabbit Hill Road.  Transit lanes and the multi-use trail remain part of the project.

I know this is a change from what we talked about. This happened fast, in reaction to the provincial budget cuts.  There will be much more detail in the New Year, and I appreciate your patience as the details are finalized.  

Council reaffirmed their support for this project to give SW Edmonton the transportation relief it needs.  I am very happy that we are finally getting the investment we need to get started on this 3-phase project.  

 

West LRT Disappointment

As you likely know, City Council voted 10-3 against my motion to look at BRT as a permanent alternative to the Valley Line West LRT.  This is by far our biggest spending commitment and I argued that a BRT solution (an “LRT on wheels” alternative) would meet our transit objectives while savings hundreds of millions of dollars.  

Freeing up some of the dollars dedicated to LRT would have allowed us to deliver a premium mass transit solution for west Edmonton equivalent to LRT AND continue to build our city AND reduce our tax bill.  We could have improved other LRT lines, or added other BRT lines to other corners of the city, or not spent the funds at all. Unfortunately, Council voted to not even have the discussion.

I’m disappointed with this outcome.  I believe that we will regret this choice.  My duty now, as your City Councillor, is to do what I can to make this project as successful as possible.  That means finding ways to adjust, modify and accommodate the disruptions, both temporary and permanent, that this project will mean for Edmonton.

Wrap Up

It has been a busy year at City Hall, and I am sure you feel the same way.  It seems that Christmas gets here earlier every year.

I hope you get the opportunity to pause and reflect on the year past, to get with friends and family, to share some fellowship.  Or simply to rest and relax. And let us all remember to reach out to that person we know that might not be able to have that big celebration, or that might be alone during the holidays.

My office will be mostly closed until January 6th.  If you have an urgent concern, please call the City’s Service Centre at 311 or email 311@edmonton.ca.  And if you or someone you know is struggling and needs help, access to resources or just someone to listen, please call the Canadian Mental Health Association’s 24/7 information and referral line at 211. See here for more information about this fantastic community resource.  

I wish you a very Merry Christmas and a wonderful and prosperous New Year!  See you in 2020.

Tim