5 Things to Know: Budget 2023-2026

Administration has spent months working with Council’s Strategic Plan to create business plans, analyze service levels, and evaluate programming. This work has gone into creating a proposed budget for 2023-2026. You can read it here.

This week, Council will be questioning, debating, and amending the budget. Then in a few weeks time, it will approve a final budget.

Following are 5 key things to know about the budget.

As always: this is my personal blog space. Any mistakes or opinions here belong to me and me alone, not to Council or City Administration. And I welcome any questions, thoughts, or feedback you might have.

1) Tax Containment Has Been a Successful Priority

Compared to other municipalities, the City of Grande Prairie has always spent about average on a per capita basis. For example, in 2019, here is how we compared to the County and other Alberta cities:

However, compared to other municipalities, Grande Prairie has over-relied on residential property taxes to raise revenue. This means that our residential taxes have been high despite our costs being average.

Over the last 5 years, Council has made tax control a priority.

But we are now hitting a point where taxes either need to at least keep up with inflation or we need to reduce services that residents really care about. In the 2023 budget, it is currently proposed that taxes increase by 3%. This is about half the current rate of inflation. It will mean that taxes have only gone up by 2% over six years.

Over the past few years, there have been huge upward costs on our budget. Inflation has made the costs of delivering services more expensive. The province has reduced the property taxes it pays by 50% and slashed millions of dollars in infrastructure funding. The federal government has increased the cost of RCMP policing by millions of dollars. And the City has added new services such as driveway windrow removal, the outdoor pool, and grandstands at the turf field.

These upward pressures have resulted in changes that would’ve increased taxes by over 20% had the City continued business as usual.

However, Council and Administration have been focused on creating much greater efficiency in operations, reducing funding to low priority programs, and increasing non-tax revenue.

Despite upward pressure on the budget, over the past five years Council has REDUCED the average residential property tax bill by 1%. Taxes have been successfully contained.

Here is what that change looks like. The light blue line is how much an average residential bill has changed by. The other lines show what change would’ve happened had taxes kept up with inflation or inflation plus changes from other levels of government.

2) Budgeting is a Very Complex, Long Process

The City has an Operating Budget of about $230 million and a Capital Budget of about $40 mllion. This means that when a 4 year budget is created, it plans for over $1 billion in spending.

This money funds over 370 programs which are delivered by 28 departments. Here is how those departments are organized:

Because of the number and variety of services offered, municipalities are far more complex organisations than almost any private or non-profit organisation. And what happens in one department often has big ramifications in other departments. For example, to get busses around town, Transit isn’t the only department involved. Fleet maintains busses, Transportation makes sure roads can be navigated, various departments handle revenue and expenses, Corporate Marketing creates route guides, Planning & Development helps make sure Transit can serve other departments, and many other departments contribute additional work. A change in Transit impacts many other departments, and changes in any of those departments can impact Transit.

Because of this complexity, a Budget can’t be set in one week. Annual Budget Deliberations are the most visible part of budgeting. But Council and Administration work on budget year round. This means that if you have strong opinions about how the City spends money, it is important to pay attention, take part in City engagement opportunities, and be in touch with Council throughout the year.

3) A Service Level Approach is Needed

Council’s focus this budget cycle should be on adjusting service levels. I hope most of our conversation is focused around areas where we should do more for residents (even if it costs more) or do less for residents (to better steward financial resources).

Over the past few years, tax containment has been a priority of Council. There were efficiencies in the organisations which had to be obtained. And there was a need to make sure that funding was better aligned with community priorities.

To obtain these goals, Council has put tremendous fiscal pressure on the City. Budget deliberations were often focused on setting a total funding envelope Council was comfortable with, then working with Administration to attain it.

This created large challenges for City staff. And I am INCREDIBLY proud of how they responded. They have found huge savings while most core services are preforming better than before.

However, in my opinion, this fiscal pressure approach is reaching its limits. If we continue to reduce spending, core services are going to be impacted in very noticeable ways. I think this means Council needs a new general approach to budgeting.

Council should be focused on Service Levels. If I have colleagues who wish to continue reducing spending, my hope is they come forward with specific services they support reducing. Personally, I have a few services I hope to see Council INCREASE (more on that below) and I know that doing so would have a financial impact.

Fortunately, the Budget Book sets Council up well to have these conversations. It is the best picture I’ve ever received on all the services the City offers.

For example: here is a look at part of the Service Overview for Parks:

If there is a Councillor who wishes to invest money in making our parks look better or who wishes to save money by doing a little less in parks: this table gives very specific ideas of how services relating to mowing and tree care could be tweaked.

I’d encourage you to skim through the Budget Book for yourself to get a look at City service levels. This section starts on page 32. Please let me know if you notice any services that you feel should be increased or reduced.

4) How Funding Breaks Down

The Budget Book contains several charts that show how funding in the recommended budget is broken down.

This is how it is proposed that the City Spend its operational money:

Note: Fiscal Services is a big part of this graph. It’s two biggest expenses are property tax revenue the City is required to forward onto the province (about $30,000,000/year). Fiscal Services also includes Capital project funding, money transferred to reserves, and debt repayment.

The City also has a significant Capital budget proposed. Here is how it breaks down:


However, the most interesting graph to me relates to Priority Based Budgeting (PBB). All City programs (over 370!) are costed out and given a score based on how strongly they align with Council’s Strategic Plan. They are then placed into Quartiles. So the 25% of programs with the highest score go into Quartile 1 . And the 25% of programs with the lowest scores go into Quartile 4. This allows us to see how much funding is spent on high priority programs. Here is what the PBB breakdown of the Budget looks like:

Quartile 1 includes services such as examples include Snow & Ice Control, Economic Development, and Storm Infrastructure. Quartile 4 examples include Internal Mail and Building Services.

5) My Priorities

I’ll be honest: I’m really struggling with this budget.

Economically, we are still in a challenging time for many families and individuals. Any tax increases must be minimized and certainly should not be above the rate of inflation.

At the same time, I see some service enhancements our community needs. There are services that need additional resources which are vital to lower income individuals and families or which are key to attracting and retaining labour. The top ones on my list:

  • Transit: buses stop too early. There are many people who work service jobs that can’t get home on a bus at the end of their shift. This has caused people in our community to lose their jobs. Others are spending a huge amount of their daily earnings on taxis or Y Drive. This hurts those people, and is also damaging to businesses which are struggling to get labour. I would like to see evening service expanded.

  • Food Bank: Food insecurity is a HUGE challenge for far too many families. The food bank is struggling to keep up with demand: usage has doubled, with over 12,000 people accessing it in 2021. The Food Bank does not currently receive funding from the City. I would like to see it receive an operational grant.

  • Indoor Recreation: Indoor recreation through the cold winter months is so critical to residents, especially children. But there are many families who struggle to access it, either because they live far away from facilities or because fees are too expensive. With the demolition of the Leisure Centre happening next year, this is about to become a bigger problem. I would like to see us begin offering some free weekly drop in times at the Smith Activity/Reception Centre. I also think we need to fund replacement indoor recreation on the Leisure Centre site.

  • Snow/Ice Control: This year, the City undertook a significant review of Snow & Ice Control. Those who participated in engagement opportunities showed support for some reasonably priced service enhancements such as clearing residential streets after 7.5cm of accumulation rather than the current 10cm. I’d like to see some of these enhancements supported.

I’m looking forward to getting more information and discussion in about the cost of these enhancements and what should be prioritized heading into next year.

This is a very important week when it comes to setting City spending. I’d love to hear any thoughts or questions you have.

However, our budget is very much a living document. City programs and services get adjusted throughout the year to better serve our community. Please follow me on social media (links are at the bottom of this post) to get my insight on what is happening. But please also follow the City. Throughout the year, I want to hear from you. But it is especially important that you take part in formal engagement opportunities the City offers so that all of Council can hear from you. Those are not just advertised on social media, but also posted at engage.cityofgp.com.

Thanks for reading!

-Dylan

Dylan BresseyComment