City Releases Proposed 2018 Adjustments to Action Plan
Today, The City of Calgary publicly released the proposed 2018 budget adjustments to the final year of Action Plan 2015-2018. The proposed 2018 adjustments respond to changes in the local economy since Action Plan was approved.
The goal of the adjustments process is to respond to changes in citizen’s needs in a financially sustainable and resilient manner to ensure The City can continue to deliver the level and types of services at acceptable levels of taxation and fees, while proactively managing associated risks. It means balancing revenues and expenditures so that The City has the capacity to recover from shocks while continuing to adapt and grow.
While the Calgary economy is beginning to recover, the downturn brought about a shift in citizens’ priorities and significantly impacted The City’s operations. The proposed 2018 Adjustments are responsive to the needs of citizens and the community - building on work conducted through the year to close an operating budget gap while reducing the 2018 municipal property tax rate increase to zero per cent.
Mayor Nenshi says, “I’m pleased with this draft budget. We’ve closed the budget gap while minimizing cuts in service and tax increases for Calgarians. We’re reducing landfill tipping fees and holding the line on taxes while continuing to build infrastructure and supply the services Calgarians need. I’m also hopeful Council will fund the ask from the police and adopt my proposal to rebate increases in non-residential property taxes."
The need to reduce the 2018 tax rate increase along with revenue challenges stemming from the economic downturn, led to a projected 2018 tax supported operating budget gap of $170 million. The proposed adjustments close the budget gap through a combination of cost savings and service reductions using a least harm approach to help reduce the impact on citizens.
“Recognizing that a top priority for Calgarians, particularly given the current economic reality, is to live in an affordable city, all departments were asked to find ways to reduce costs”, says City Treasurer, Carla Male.
Administration has collectively found proposed solutions that balance the financial impact to citizens with service demands. While some service reductions are necessary in order to reduce the previously approved property tax rate increase to zero per cent, the delivery of most City services will continue as previously approved in Action Plan.
Key elements of the proposed 2018 Adjustments include:
- A reduction in the previously approved municipal property tax rate increase for 2018 from 4.7 per cent to zero per cent for property owners.
- Dedication of $23.7 million in 2017 tax room to fund Green Line financing costs.
- Closure of the $170 million operating budget gap through a combination of cost savings and service reductions based on the least harm approach.
- Reductions in all City departments, including removal of 156 full-time equivalent positions.
- $4 million to continue funding the low income transit pass for Calgarians’ in need.
- Reductions to the previously approved 2018 basic sanitary tipping fees from $119 to $113 per tonne, and Planning & Development fees, to reduce the burden on Calgary businesses. These reductions build on the reductions to the 2018 approved rate increases for water and wastewater utilities to 2.5 per cent, and 7.4 per cent for drainage that were approved during Mid Cycle Adjustments.
- The solutions provide $8 million in available funding for Council to allocate to additional needs if they choose.
With the proposed tax rate increase at zero per cent, taxpayers would see an average 2.9 per cent increase on the municipal portion of their 2018 property tax bill. This is the result of one-time rebates that Council approved in 2017, which effectively sheltered taxpayers from the 2017 increase by deferring the impact for one year.
The effect of a one per cent increase in the municipal property tax rate would result in an annual increase of about $18.00 or $1.50 per month for the average homeowner with a median assessed single residential property valued at $460,000.
In addition to the 2018 adjustments, the report includes information on The City’s reserves at the end of 2016 and the results of the 2017 Triennial Reserves Review.
Council deliberations on the 2018 Adjustments to Action Plan will begin on November 27, 2017 at 9:30 a.m. in Council Chambers. Public submissions will be heard after an opening presentation.
Visit calgary.ca/2018Adjustments for more information or to download a copy of the 2018 Adjustments report.