2011 Proposed Budget Holds Tax Increase at 3% for City Services
November 09, 2010
City Administration has presented the Proposed 2011 Operating Budget for civic services, boards and authorities, which achieves City Council’s guideline to achieve a balanced budget with a 3% tax increase for civic services and 2% to continue the Neighbourhood Renewal Funding Program.
“Council and Administration worked together earlier this year to establish guidelines for preparing this budget, and our staff has spent the past six months finding savings and revenue opportunities to achieve Council’s target,” said Simon Farbrother, City Manager.
“The continued expansion of the area and population we serve, in tight economic times, has been a challenge for the City, but our new approach to reviewing all business units to make sure they contribute to Council’s goals has helped us keep costs affordable while minimizing impact on direct services to Edmontonians.”
The Proposed 2011 budget includes an increase in debt charges of $14 million, or 1.5% of the tax levy increase for services. These costs arise from investing in new infrastructure and major rehabilitation projects.
Budget Strategies
To balance the budget at a tax levy change of 3%, $50.6 million in cost reductions and revenue opportunities are proposed. Without this change in the net operating requirement, the City would have required a tax levy increase of 8.5% for services.
Cost reductions were achieved through changes such as strategic sourcing and contract initiatives, rationalization of computers, telecommunication equipment and advertising costs. More than $7.3 million in reductions came from eliminating vacant positions, reducing budgets for consultants and reducing the transit fuel budget, due to stabilized fuel prices.
Realignment of funding between operating and capital budgets results in a net operating reduction of $3.4 million. Further reductions totalling $10.6 million will be achieved through rationalization and cost-efficiency efforts.
Administration also identified $26.2 million in revenue opportunities, including $2.1 million in traffic enforcement revenue to cover additional Edmonton Police Service traffic safety costs, and $8 million from transit fares and advertising revenue, parking meter revenue, fire inspection fees, and community facility fees. Administration estimates another $3 million can be generated from current planning revenue and $3.1 million transferred from capital budgets to fund maintenance operations.
An additional $10 million in revenue is proposed from electricity and gas franchise fees.
The cost reduction strategies also freed up $6.9 million to advance projects associated with Council’s 10-year goals. Additional funds not allocated in the proposed budget, are available for Council to designate while remaining within the 3% tax target.
Neighbourhood Renewal
In December 2008, Council approved the 2% tax funding strategy for Neighbourhood Renewal in 2009, 2010 and 2011. The program benefited more than 20 neighbourhoods in each of the last two years, with work on roads, sidewalks and streetlights. The Program involves a combination of total reconstruction in some areas and preventative maintenance in others. In 2011, the program proposes work in another 20 neighbourhoods.
Impact on Typical Household
If the final budget contains the tax levy increase of 3% for the civic services (including boards and authorities, and Police) and 2% for the Neighbourhood Renewal, the typical Edmonton household (assessed at $330,000) would see a tax increase of about $78 for 2011, or $6.50 a month for people on a payment plan.
The proposed 2011 budgets for waste utilities, drainage utilities and wastewater treatment would increase the typical household’s fees by $3.50 per monthly bill.
When factoring federal and provincial taxes, only 4% of a typical Edmonton household’s total taxes go to the City to fund services like transit, roads and park maintenance, police, firefighters, libraries and recreation programs.
Next Steps
Administration’s Proposed Budget marks the start of Council’s deliberations on funding levels for all civic services, including transit, recreation, parks, road maintenance and snow clearing, police, fire rescue and libraries. Council will discuss the proposed operating budgets from Nov. 29 to Dec. 7 (and Dec. 14-15 if required). The final tax rate is set in the spring after the Education Tax is set by the Province.
The City will hold a Public Hearing on the Budgets Nov. 22 in Council Chamber. To speak at the hearing, residents should call the City Clerk at 780-496-8178 or register online at www.edmonton.ca/meetings.
For more information:
Lorna Rosen
| Title | Chief Financial Officer & Treasurer |
|---|---|
| Telephone | 780-944-5524 |
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