City Council Approves the 2016 Resilience Budget
(Calgary, AB) – Today, City Council approved the proposed adjustments to the operating budget for 2016-2018 and adopted the proposed operating budget as amended. Approval and adoption of the operating budget is intended to signal to businesses and citizens that The City intends to continue to deliver services efficiently, promote stability and support local employment through continued capital spending.
The approved operating budget will bring the 2016 tax rate down to 3.5% from the previously approved 4.7% tax rate increase. This translates into a property tax increase of $4.90 per month for the typical residential property (compared to $6.75 per month at 4.7%).
“The proposed budget has been guided by The City’s overall Economic Resilience Strategy and provides a pragmatic and balanced approach”, said Chief Financial Officer, Eric Sawyer. The strategy focuses on continued service delivery, ensuring value for money, investing in infrastructure, retaining jobs and investment, and continued monitoring of impacts to City finance.
Soon after the approval of Action Plan 2015-2018, the economic downturn began to affect The City and the community we serve. As a result, unemployment levels in Calgary have increased, and municipal revenues have dropped below the level that was budgeted in Action Plan. At the same time, the most recent civic census shows that overall service demand and growth pressures in the community have remained high, and are in fact exceeding earlier forecasts.
The City is also experiencing corporate revenue shortfalls as a result of the slower economy, driven largely by lower franchise fees from depressed natural gas and electricity prices, and lower projected taxation revenues as a result of slower economic growth that is slowing growth in the tax base. The 2016 Resilience Budget proposes to cover the projected revenue shortfall of $41 million through an operating budget reduction with no impact to City services.
“Moving the tax rate increase from 4.7% to 3.5%, amounts to a reduction of approximately $18 million in base funding and can be covered by efficiencies and savings without any impact to service delivery”, said Sawyer. The Budget Savings Account has demonstrated that Administration is able to find savings. The Zero-Based Review program has been instrumental in helping business units to find savings through service efficiencies, and will continue to do so.
Council approved the $18 million to be covered through Corporate Costs initially. Following approval Administration will allocate the $18 million reduction to departments.
Administration will bring forward a “capital stimulus budget” on 2015 November 25 for Council’s approval and adoption. The intent is to stay the course while providing economic stimulus and supporting job creation. “We want to create value and invest in programs and services that the community wants. The intent is to use our existing capital spending levels to maximize the benefit for the community”, said Eric Sawyer.
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