Budget Reset 2019: Things to Know

Over the past year, Council has talked about having a “Budget Reset” in 2019.

There is a desire in our city to see money spent more efficiently. The community also has priority areas which require greater resources. The proposed budget accomplishes both these goals.

It should be acknowledged that this budget is possible because of the incredible dedication and work of our staff. A lot of time (including evenings and weekends) went into creating this budget. Even more has gone into shaping the City so that it can deliver on it. I’m so thankful for our Corporate Leadership Team, managers, and staff.

Following is what you need to know about budget 2019. Any mistakes or opinions belong to me and me alone, not to Council or staff. This budget still needs to be approved by Council at a regular meeting. It may also receive some revisions before a Property Tax Bylaw is passed in the spring.

TAX DECREASE

The budget currently delivers a -4.1% decrease for residential properties.

This means that the average property will owe 4.1% less taxes in 2019 than it did in 2018. For an average home owner this is a decrease of ~$130.

This decrease is to the actual amount that you will pay, not to the mill rate. After 2018 assessments are completed, the mill rates will be created to incorporate this decrease. This means that even if your property assessment goes up, you will see a tax decrease as long as it went up at the same rate as average properties in its class went up.

INVESTMENT IN POLICE AND PUBLIC SAFETY

There is increased investment in policing and emergency services. In 2019, the following new positions are funded:

Two RCMP officers
Peace Officer to service the Community Knowledge Campus
Public Information Officer for the Public Safety department

The budget also includes resources to address root causes of crime. Most significant: $500,000 has been set aside for affordable housing strategies. This will be used to attract provincial, federal, and private investment into our community.

There will also be investments in emergency preparedness through the hiring of an Emergency Social Services Coordinator and upgrades to the Emergency Operations Centre.

INVESTMENT IN ROADS AND TRANSPORTATION

Significant new investments are being made into roads. In 2019 these include:

A $9,784,000 Road Rehabilitation and Overlay program. This is a 22% increase over 2018 levels.
Purchase of an Asphalt Repair Unit. This will allow for hot patches to be applied to roads throughout the winter. These are significantly more durable and longer lasting than the cold patches currently used.
Bypass care. $500,000 in 2019 is designated for assessment and rehab work when the City takes ownership of this road in July.
Windrow removal. Last year, this was a one year pilot program funded through reserves. It is now a permanent program with operational funding.

There is over $7,500,000 of additional funding for basic infrastructure capital projects in 2019.

In addition, significant projects are budgeted in the following three years. These include $12,750,000 for additional work on the bypass and $4,000,000 for a new snow dump and equipment marshaling yard.

INVESTMENT IN COMMUNITY ENHANCEMENT

In 2019 significant new investments will help make Grande Prairie a better community to live in. These include:

$80,000 towards projects to make City owned facilities more accessible
Next steps for the Leisure Centre funded, including partial demolition, public engagement, and land use planning
A new City website and online engagement tool to help the community interact with the City
Operational funding for the Bear Lake Outdoor Pool and CKC Grandstands
Trees, pathways, and an entrance feature for Hillside
$500,000 put towards Economic Development to encourage investment in our community

Over the next few years there are also budgeted enhancements to community recreation facilities. For a few of these projects, management only requested 50% funding. Management is committed to obtaining corporate sponsorship for the rest. The City is working hard to build revenue from non-tax sources.

DOWNTOWN

There are currently no plans to undertake another phase of Downtown Rehabilitation in 2019. However, Council will be looking at options to increase aesthetics on 100 Ave. The options it considers will cost significantly less than full rehabilitation and will not be destroyed by future construction. Examples may include light posts and semi-permanent planters.

Click here for more information about how the proposals for 2019 differed from earlier phases of Downtown Rehabilitation.

Council also allocated funds towards demolition and mixed-use building grants. This is meant to encourage redevelopment of end-of-life or underutilized buildings and vacant lots.

ORGANISATIONAL EFFECTIVENESS AND EFFICIENCY

Significant work is underway to help the City do more with less resources. Initiatives include:

Lean and Priority Based Budgeting implementation- click here for more information
A Customer Service enhancement program
Centralization and better resourcing of financial administration to provide increased support and more oversight to all departments
A Human Asset Management strategy to better care for employees while pursuing more efficiency and effectiveness
Rebuilding of procurement practices to ensure City purchases get maximum quality, value, and social impact

DEBT RESTRUCTURING

Council currently intends to restructure a number of loans with interest rates of over 3.5% and with maturity dates beyond 2026. These will be consolidated into a single loan with a 30 year term and an interest rate of ~3.5%.

Doing this will incur a stop loss payment of ~$3.1 million and will lead to more interest paid over the course of the loan. However, it will increase the City’s cash flow by ~$3.3 million for 5 years and by a little less than this for the following 6 years.

Council has directed that half of this increased cashflow should go into reserves and half should go to funding a tax decrease of ~1.5%.

This decision is not final yet. To implement this strategy, Council will need to hold a public hearing and at least two debates. I’ll be posting more information on Facebook and at www.bressey.ca/meetings.

REVENUE SOURCES

City staff have worked very hard to become more efficient and effective with our resources. A lot of work went into optimizing the expense side of our balance sheets. However, it is also important to look at revenue sources.

To ensure property tax payers aren’t unduly subsidizing others, non-tax revenue sources have been increased. These are:

The Electric Franchise Fee will be raised from 7.75% to 10%. This new rate is less than the average rate of other Alberta municipalities who charge franchise fees. This measure ensures that tax exempt facilities are paying for a fair share of municipal resources. This will generate extra revenue of ~$1.5 million which is equivalent to a 1.3% tax decrease. It will cost an average single detached home $2.53/month.
City Fees and Charges will be reviewed and some will be raised. This will be the first time in over a decade that all fees have been reviewed. It will include everything from transit passes to building inspection fees. Raising fees ensures that those who use services pay for a fair share of those services. This will generate extra revenue of ~$250,000 which is equivalent to a 0.2% tax decrease.
Corporate Sponsorship is an elevated priority. Attention is being put into gaining private investment for recreational facilities.

BREAKING DOWN THE TAX DECREASE

Some may point out that the proposed 4.1% decrease is due in part to re-financing loans and increasing revenue. That is true. Refinancing has an impact of ~1.5%, increasing the Electric Franchise Fees has an impact of ~1.3%, and the proposed Fees and Charges Review has an impact of ~0.2%. This means that without counting these measures, a tax rate decrease of -1.1% was achieved.

The City is achieving a tax decrease just from controlling its expenses. This is despite many service improvements built into the budget and all the upward cost pressures described here.

MORE INFORMATION

If you want more information on the budget, including how I voted on individual items, I wrote reports on each day of deliberations:

Day 1: Financial Strategies, Be Safe & Feel Safe Package
Day 2: Targeted Cuts, Strategic Initiatives
Day 3: Infrastructure & Sustainability, Organisational Efficiency, Community Enhancement, Downtown, Debt Restructuring

I’m also happy to answer questions. The best ways to get a hold of me: on the GP Round Table Facebook group, at dbressey@cityofgp.com, or 780-402-4166.

Thanks for reading!

-Dylan

Guest UserNovember 18, 2018budgetComment