2011 capital budget

Council will review a 2009-11 capital budget this fall. Here's a look at 2011 (2009 and 2010 can be found in older posts).

Total spending: $21.1 million

Funding breakdown:
 - Grants: $16.4 million
 - Taxes: $3 million
 - Reserves: $1.7 million

What's in

Public works snow storage, $625,000

The city already has $1.2 million in the bank for this project.

Veness Road upgrade, $700,000

Improves what is now a rocky road to the North Campbell Business Park.

Transit satellite garage, $500,000

Buys land for a future garage to store new buses.

What's not

Northeast arterial (realigned Villeneuve Road), $14.1 million

Cost to build the first two lanes of the first major road in the annexed lands.

Badger servicing, $10 million

This cash is needed if the city decides to pay for servicing its 32 hectares west of Wal-Mart.

Servus Place fitness and wellness expansion, $5 million

More dollars to address the cramped fitness area.

Branch library, $4.5 million

The remaining funding need to build a second library. 

Southwest arterial (LeClair Way), $3 million

Ties into the section of LeClair Way (planned in 2009) between Sir Winston Churchill Avenue and the Riel Drive extension.

Transportation action plan, $2 million

Study to identify ways to improve transit speed and reliability, including light rapid transit.

2010 capital budget

Council is reviewing a 2009-11 capital budget this fall. Here are some highlights from year two.

Total spending: $37.3 million

Funding breakdown:
 - Grants: $20.2 million
 - Reserves: $5.7 million
 - Taxes: $2.9 million
 - Debt: $8.5 million *

* Debt proposed to rebuild fire hall No. 1

What's in

Fire hall No. 1, $9.5 million *

This would pay to rebuild or renovate (it's about the same cost, apparently) the city's fire hall on Sir Winston Churchill Avenue. 

Riel Park redevelopment, phase two, $6.5 million

This is related to landfill remediation work that's in the utility capital plan (another $6.3 million between 2009-12). The remediation work includes capping and grading. This returns the area to its previous state.

Transit replacement plan, $3.5 million

Replaces three of the 18-metre extended buses, plus other equipment.

Heritage sites plan, $1.5 million

This continues work from the 2005 heritage sites master plan, for the river lot area adjacent to the Meadowview ball diamonds.The city and Arts and Heritage Foundation want to create a European and Métis settlement using historic buildings currently sitting empty on site. This plan determines how to service the area and where specifically everything will be located. (There's also $150,000 in the 2009 budget for this project).

Far north transit park 'n' ride, $500,000

Buys land needed for a future park 'n' ride station north of Wal-Mart. It won't be built until 2016, according to the 10-year capital plan.

Lion's Park refurbishment, $400,000

Spiff up the park and winterize the washroom facility so it can be used as a warm-up site during winter.

What's not

There's quite a few in 2010.

St. Albert Road urbanization, $15 million

With annexation complete, council needs to determine if it wants to narrow the right of way for the section of Highway 2 in the new limits, making it consistent with the rest of St. Albert Road. This would improve intersections and storm water management.

Branch library, $14.2 million

As stated in the 2009 post, the city's looking at three potential sites: Erin Ridge North (an undeveloped area planned by Landrex), the Badger site (west of Wal-Mart and currently home to the compost yard), and the future Hole's development in South Riel.

South transit park 'n' ride construct, $4 million

The city has dollars to buy the land in 2009, but funding is lacking to complete the work. (I missed this when I posted yesterday about $500,000 paying for all of the work in 2009. My apologies.)

Transit priority implementation, $2 million

Study that will determine ways to improve transit reliability and speed.

Former public works yard clean up, $1.5 million

The city sold this Riel Park land years ago, but it's still contaminated with road salt. Legally, the city has to pay for it at some point.

Servus Place fitness and wellness expansion, $550,000

There's $200,000 in the 2009 budget to come up with an expansion plan, but there are no dollars allocated for the actual work. Perhaps it's just a coincidence, but the city is projecting the 2008 Servus Place deficit will be less than anticipated, leaving an extra $551,000 at the end of the year. (The expansion is needed to alleviate the prime-time workout space crunch.)

2009 capital spending

City council will review a three-year, 2009-11 capital budget next month. This may look like a repeat of an earlier post, but the proposed budget contains a few changes from the 10-year capital plan. Here are a few highlights:

Total spending: $78.7 million

Funding breakdown
 - Grants: $67.9 million *
 - Taxes: $3.9 million
 - Reserves: $2.7 million
 - Offsite levies (roads): $2.2 million
 - Debt: $1.9 million **

* This includes $45 million from the provincial government as a payback for Ray Gibbon Drive, money that would go toward stage three to Villeneuve Road.

** Debt proposed to complete stage three of Ray Gibbon Drive.

What's in

- Ray Gibbon Drive stage three, $47.4 million

This will complete two lanes from Giroux Road to Villeneuve Road, plus all the land  needed for a wider right of way and interchanges to accommodate an eight-lane freeway. It also includes pre-grading of the next two lanes.

- Southwest sector arterial (LeClair Way) phase one, $4.9 million

Access to Riel Business Park from Ray Gibbon Drive. This arterial road will connect to the Riel Drive extension (work underway now) to Ray Gibbon Drive

- Transit buses, $2.6 million

New buses for route expansions and ridership growth. Does not include ridership increases related to the U-Pass.

- Bridge repairs, $2.5 million

The city repaired the Perron Street Bridge this year. Next year it's time to work on the St. Albert Road and Sir Winston Churchill bridges.

- Transit garage expansion phase two, $2.5 million

More offices, storage, driver facilities and dispatch areas. 

- Fire hall No. 1, $500,000

The first year of funding (possibly for designs) to complete a rebuild or renovate the fire hall on Sir Winston Churchill Avenue.

- South park 'n' ride, $500,000

Buys land for a new park 'n' ride station near Superstore (just north of the future ring road). It will replace the Village Landing station.

- Riel Park reclamation study, $300,000

This study will provide a plan and designs for the next phase of landfill remediation and surface work needed at Riel Park. The work is to start in 2010, split between the utility and capital budget. 

Note - There are plenty more that I didn't post here. Administration is proposing 67 budget requests in total (with identified funding). There are three more that didn't make the funded list (which council can change if they want), including this one below.

What's not

Library branch planning and design, $1.2 million

Pretty self explanatory. The city is looking at three potential sites for a second library: the new Hole's in South Riel, the Badger lands and Erin Ridge North.

One-year budget

After much debate last night, council opted to review a one-year operating budget and three-year capital budget. 

Council voted 4-3 to "focus" their time and attention on the 2009 operating budget that administration has prepared. They will not penetrate the 2010 and 2011 budgets.

The issue was renewed by Coun. Roger Lemieux who felt more comfortable with an annual spending review given the changing economic landscape. But his idea to create a brand new 2009 budget was amended (at the suggestion of Mayor Nolan Crouse) to focus on using the existing 2009 document.

Council will proceed as planned and review a three-year, 2009-11 capital budget.

The 2009 operating budget calls for $101 million in municipal spending. 

Homeowners can expect an 8.97 per cent increase. Non-residential commercial and industrial businesses face a 10.47 per cent hike.

The utility budget calls for $22 million in spending, and a 9.5 per cent hike in rates. 

The 2009-11 capital budget calls for $78 million in construction projects and equipment in 2009, followed by $37 million in 2010 and $21 million in 2011.

Council begins a department-by-department review of budget proposals starting next Tuesday, Nov. 4, a process that could extend to Dec. 8. The first opportunity for public input is Nov. 6.

Complete copies of the budget are available at the St. Albert Public Library (second floor in the resource room), or for purchase from city hall. A budget overview will also be posted on the city's website.

Why spend on stage three?

Lynda F. raised a good question in a comment she posted on the blog today. Namely, why would the city want to consider paying for stage three of Ray Gibbon Drive in the current economic climate?

Those answers will come out during the budget meetings, but I can offer my interpretation.

If the city doesn't build the first two lanes to Villeneuve Road, St. Albert in effect is not holding up its end of the deal that was agreed upon in principle by Premier Ed Stelmach and former mayor Paul Chalifoux.

The deal states that if St. Albert builds the first two lanes from 137th Avenue to Villeneuve Road, the province will reimburse the city for all dollars spent to ensure the road can one day be converted into a freeway.

The payback covers land that was (and some that still has to be) purchased for a wider right of way to accommodate up to eight traffic lanes, interchange land, extra design costs, etc. for all three stages. 

The city has crunched the numbers (which are still in the hands of Alberta Transportation)  and those extra costs add up to $45 million.

The province has also agreed to make Ray Gibbon Drive a highway bypass. That means they'll one day pay to extend the road beyond Villeneuve Road (some of that extension will be in the city's jurisdication) to Highway 2 just south of Morinville. The province will also pay to widen the road, as traffic counts warrant. 

No stage three = no payback = the province won't pay to extend the road north of Villeneuve Road to Highway 2 south of Morinville = no highway status = no future widening on the province's dime.

The city's plan is to use the$45 million payout from the province to pay for the bulk of the $47 million stage three. That means the city needs to find $1.9 million of its own funding for stage three.

Given the amount of money spent to date on non-arterial road costs and time put into negotiations with Alberta Transportation, I would be extremely surprised if council decided not to continue with stage three.

2009-11 budget operating highlights

The draft 2009-11 budget was released on Friday. It calls for $123.4 million in spending next year (municipal and utilities), $133.8 million in 2010 and $145.7 million in 2011.

Although a three-year budget is not a foregone conclusion (given Coun. Roger Lemieux's pending motion tonight to revert to a single year), here is a year-by-year breakdown of operational spending highlights. I'll do a separate post on the capital side.

Note: these are proposed budget items.

2009
Proposed tax increase: 8.97 per cent
Municipal spending: $101.1 million
New operating requests: $2.4 million

Operating highlights

- Fire station No. 3 staff, $540,000

- Servus Place lifecycle plan (repairs and equipment), $300,000

- Snow and ice control (roads - restore standards), $216,200

- Downtown area redevelopment plan, $189,000

- Riel Recreation Park maintenance/operations, $205,800

- 2011 Alberta 55-Plus Winter Games, $185,000

- 150th anniversary celebrations, $150,000

What didn't make it (highlights):
- Tree bylaw implementation, $100,000; Capital Region Board (CRB) initiatives, $100,000; incentives for affordable housing, $150,000

2010
Proposed tax increase: 8.41 per cent
Municipal spending: $109.3 million
New operating requests: $5.6 million

Operating highlights

- Extra office space, $1 million

- Fire station No. 3 staff, $720,000

- Servus Place lifecycle plan, $350,000

- Fire services platoon chiefs, $334,000

- Sidewalks (restore snow and ice control standards), $275,000

- Snow and ice control (roads), $272,100

- Riel Recreation Park maintenance/operations, $205,800

- 150th celebrations, $150,000

What didn't make it:
- Transit local route improvements (off peak), $330,000; incentives for affordable housing, $150,000; tree bylaw implementation, $104,000; CRB, $100,000

2011
Proposed tax increase: 8.60 per cent
Municipal spending: $118.4 million
New operating requests: $9.6 million

Operating highlights

- Extra office space, $852,900

- Fire station No. 3 staff, $720,000

- Fire staffing (for high rise development), $480,000

- Fire services platoon chiefs, $414,000

- Servus Place lifecyle plan, $400,000

- RCMP staffing, $349,000

- Sidewalks snow and ice, $304,300

- Snow and ice control (roads), $272,100

- Riel Recreation Park maintenance/operations, $205,800

- 150th celebrations, $200,000

- Staff transition fund (succession planning), $200,000

- Tree maintenance, $172,400

- Consultant to review east transit routes (including Servus Place), $175,000

What didn't make it
- Transit local route improvements (off peak), $500,000; incentives for affordable housing, $150,000; CRB, $100,000; tree bylaw implementation, $87,100

Servus Place expensive?

The municipal trend of building mega recreation centres continues.

Have a look at what's proposed in Grande Prairie — a 200,000 sq. ft. monster of an aquatics and wellness centre.

It's going to be attached to existing twin arenas and a gymnastics facility, but will include: leisure and competitive pools (you can surf too), fitness area, squash and racquetball courts, running track, soccer pitch, etc.

The construction contract hasn't been awarded yet, but it could reach $104 million, according to the Grande Prairie Daily Herald-Tribute.

Whether you agree with the 2004 plebiscite or not, it really hits home about inflation in Alberta since St. Albert's guaranteed maximum price of $42.8 million with PCL.

From the Herald-Tribune:
Cutting costs - City still looking at ways to reduce multiplex tender before Nov. 11 deadline

Interestingly, the aquatics and wellness centre was designed by the same firm as Servus Place, Barr Ryder Architects and Interior Designers.

Here's another tidbit that should be familiar to St. Albert residents — the GP multiplex was originally touted as a regional project between the City of Grande Prairie and County of Grande Prairie. When talks fell through, the city decided to go it alone.

If you want a closer look, here's a link to floor plan maps, visuals and the business plan. (They're forecasting 76 per cent cost recovery in 2011, the first year of operations, which would increase to 84 per cent and 99 per cent the following two years. Servus Place is shooting for 77 per cent in 2009).

Taxes v2.0

St. Albert homeowners are looking at almost a 28 per cent property tax hike compounded over three years, after the 2009-11 budget was released Friday. That's up slightly from figures released earlier this month.

The budget calls for proposed tax increases of 8.97, 8.41, and 8.60 for 2009, 2010 and 2011, respectively.

The owner of a $400,000 home can expect to pay $209 more next year, and a combined $660 over all three.

The hike translates into an extra $130 a year for the owner of a $250,000 condominium. That's $411 over three years.

Utilities could go up 9.5 per cent a year for all three budget years.

Business pay more

Business owners face the largest tax increases: 10.47, 10.66 and 9.59 per cent for 2009-11.

The difference? For the 2009-11 budget, non-residential operations are being taxed at a higher rate than in past years. It's part of a "tax burden ratio" that's being worked into financial policies. The idea would use an 84/16 split, meaning 84 per cent of all tax revenues would come from homeowners, while 16 per cent would come from non-residential. (Those were the numbers used over the summer, which may or may not have changed).

According to the budget overview, the proprosed increases actually could have been worse for business had the city not held back on the Servus Place levy. Businesses will gradually pay more for the capital levy in the coming years.

Single-year budget?

That on-again, off-again debate about multi-year budgeting appears to be headed for a conclusion.

Council on Monday is expected to debate whether they want to review a one-, two- or three-year operating budget. Coun. Roger Lemieux intends to introduce such a motion on Oct. 27.

There's been quite a bit of back and forth on this issue during the last year. Since the spring, admnistration has been operating under direction to prepare the full 2009-11 budget and present it starting Oct. 27. Council had agreed to first review all three years worth of budget requests before deciding whether to approve one, two or three years worth of spending.

If council does have a change of heart and Lemieux's motion passes (and it sounds like the majority is leaning that way), they could ask to hear just the 2009 budget presentations and focus their questions on that year alone.

This would likely mean fewer budget meetings this year, but additional deliberations in 2009 and 2010.

Lemieux's notice of motion only refers to the operating budget. He indicated he's still in favour of a multi-year capital budget.

Read more in Saturday's Gazette.

Power line misses budget

The cost to move a high-voltage power line away from Big Lake will not find its way into the city's 2009-11 budget, or any other spending year for that matter. The line is responsible for numerous bird fatalities due to collisions with overhead wires.

Council on Monday rejected its own environmental advisory committee's (EAC) recommendation to put $450,000 toward relocating the AltaLink transmission line. AltaLink had offered to match (unheard of for environmental reasons), while the province already cut a $300,000 cheque.

The EAC advocated running the line along the east side of Ray Gibbon Drive, one of six options presented to council. The city's own office of environment said that option would not eliminate fatal bird collisions, but would certainly move it from a "high-risk" area and likely reduce fatal strikes.

Out of sight …

Rather than put city dollars toward the move, council instead favoured James Burrows' idea —  ask the province and AltaLink to bury the line underground at a cost of $6.3 million. (A move not without environmental consequences).

Burrows argued it would be a "great gift" to the people of St. Albert if the province came through. Moving the line, he said, would boost eco-tourism opportunities at Lois Hole Centennial Provincial Park.

Indeed it would be quite a gift if the province came up with the millions needed. That would be 10 to 20 times Alberta Tourism, Parks and Recreation's original contribution, depending on whether AltaLink agrees to such a partnership.  The early response from both organizations … has been short on enthusiasm.

Dream on

Coun. Lorie Garritty said council is "dreaming in Technicolor" if it thinks the province and AltaLink will reach that far into their pockets. He may be right.

However, Mayor Nolan Crouse worried about the implications of using reserves to pay for the move.  Replacing the money (something council would be advised, but not obligated to do) would require the equivalent of a 0.75-percentage point tax increase. 

Crouse doesn't view the power line as the city's top environmental priority. If the city is to go to government for environmental funding, it should be for issues like improving the water quality of the Sturgeon River, he said. (Dredging the river is a $2-million expense in 2013, according to the 10-year capital plan).

Sports backlash?

Crouse and Coun. Gareth Jones shared worries about the power line's proposed proximity to the Riel Park sports fields. A map of the EAC's preferred alignment shows it running across the southwest corner of the soccer pitches.

Realistically, relocating a power line near the sports fields would not win many friends among soccer parents, the rugby club, cricket, Kinsmen Club, BMX — and on down the list.

Those are potentially louder voices than the EAC and the three residents who spoke in favour of relocation Monday.

Interpretive centre questions

After years of delays, Monday's decision should trigger a powerful conclusion. Either the province will come through and bury the line, or it's possible they'll cancel their $300,000 cheque.

It's not clear when the city will get an answer. But you can bet the issue will come up again when St. Albert, the province, Ducks Unlimited and the Hole family resume talks about creating an interpretive wetland centre situated in Lois Hole park … in view of a bird-killing power line.

Transit budget

Someone posted a question the other day asking what the three-year budget has in store for St. Albert Transit.

While the transit department doesn't present its budget requests until Nov. 13, I can share a few line items that show up in the draft 10-year capital plan.

Transit highlights:

- More buses for growth ridership, to the tune of $4.96 million over 2009-11. That includes $2.18 million to accommodate students who've taken advantage of discount transit passes through the U-Pass program. The city saw a 10 per cent jump in ridership in September, due in part to U-Pass.

- South park 'n' ride, $500,000 in 2009. The city hopes to buy some land from the province south of the Superstore/information centre, just north of the future ring road. The new park 'n' ride location would replace the Village Landing station, which is jammed full due to lack of parking. Incidentally, the south park 'n' ride is the spot city hall believes would make a great LRT station some day.

- Transit priority pre-emption, $500,000 in 2009 and $500,000 in 2011. I don't have the details, but from past interviews the city is looking at technology that allows transit vehicles to change a red light to green, improving trip times. They're also looking at queue jumps — short bus-only lanes that allow transit vehicles to skirt around lineups at traffic lights. A special signal would tell the bus driver when it's safe to proceed.

The City of Edmonton is currently building a queue jump at St. Albert Trail and Yellowhead Trail (St. Albert chipped in), which should improve travel times to downtown Edmonton. The jump should be open sometime next year. Additional jumps are planned along the Trail, including 137th Avenue.

As engineering director Todd Wyman once told me, transit priority pre-emption is meant to gradually improve public opinion of transit and reduce traffic gridlock.

"You're going to be stopped at a red light and see a bus take off and get ahead of the pack … if you don't like that you have a choice to make: get on the bus or sit in traffic."

- NW LRT study, $50,000 in 2009; LRT planning study, $1 million in 2017. Much like it sounds, this would explore the possibility of extending LRT into St. Albert. The 2017 date alarmed Coun. Len Bracko last weekend when he asked about fast-tracking LRT. "I might be dead by then," he quipped. 

Officials reassured Bracko by explaining the city is trying to piggyback on work the City of Edmonton is currently doing on an analysis to determine what route LRT would take to reach St. Albert's border.

- North park 'n' ride, $500,000 in 2010. This only buys the land, located north of Wal-Mart. The station shows up again in 2016 as a $5.7-million expense.

- Bus replacement, $14.6 million over 10 years (2009-18). This would replace existing transit buses (not to be confused with purchasing buses for new routes).

There are other capital requests, but those seem  to be the main ones. 

I have no details on the operating side, but the rumbling from city hall is the new transit driver contract isn't going to be cheap.

Capital budget: Ray Gibbon Drive in, library out

St. Albert's 10-year capital plan is an exercise in prioritization and compromise.

The plan identifies $732 million worth of roads, bridges, buildings, transit and parks related spending through to 2018. The plan provides the building blocks to the three-year capital budget.

Some projects appear in danger of falling into the "window-shopping only" category, thanks to a gaping $476-million shortfall. The city has identified just $255 million in capital funds over the 10 years. 

The plan translates into proposed capital spending of $78 million, $37 million and $21 million in the 2009-11 budget.  Those tallies of course are subject to change when council combs through the details next month.

Here's a few notable projects currently on the funded list for 2009-11.
- Ray Gibbon Drive, stage three: $47.4 million in 2009 *
- Fire station No. 1 rebuild: $10 million
- Riel Park reclamation, phase two: $6.8 million
- Southwest sector arterial (Riel South): $4.9 million in 2009
- New buses: $4.8 million (includes $2.2 million for U-Pass) in 2009, plus $200,000 in 2011

* The city has budgeted the province will cover all but $1.9 million, as per a proposed funding payback deal. 

Here's the list of projects that didn't make it due to lack of funding:
- Downtown civic building: $32 million in 2012-14
- Branch library: $20 million in 2009-11
- Badger lands servicing: $20.5 million over 2010-13
- St. Albert tourism strategy: $10 million over 2009-14

Debt proposed

The funding gap is proving such a challenge, administration recommends borrowing to enhance grant, reserve and tax revenues. Borrowing is proposed to cover $8.5 million for fire station No. 1, and the $1.9 million to complete Ray Gibbon Drive.

After years of debt-adverse practices (aside from Ray Gibbon Drive and Servus Place), could we be headed toward a philosophical shift about borrowing? The jury's still out, although the idea left a poor taste with some council members last weekend.

Mayor Nolan Crouse wants to see more grants put into the plan and not debt. The city still has $33.8 million revenue that has not been earmarked for a project. 

There's another $21 million in provincial grant dollars sitting in budget limbo. The funds  are not currently listed in the 10-year capital plan. They appear on a separate line called "growth development fund." Sounds to me like a plan to kick-start development in the annexed lands.

Council takes a closer look at the capital plan on Nov. 25. Additional time could be set aside in early December, if needed.

St. Albert budget déjà vu

A few comments this week gave me a sense of déjà vu, yet still managed to reinforce how much  has changed in two years.

The first came when Coun. Lorie Garritty recognized the 8.39 per cent increase proposed for 2009 might not be popular with the public, suggesting a more "palatable" number might be in the six or seven per cent range. Coun. Gareth Jones later said 8.39 per cent seems "a little high." 

Former mayor Paul Chalifoux made similar remarks early in the 2007-08 budget process, when administration at the time forecast annual tax increases of seven per cent. 

"There will be trepidation because seven plus seven doesn't look good," Chalifoux said at the time. "The reality we're facing is that we're in a churning economy right now and we don't want to let the quality of the community go down hill."

Two years ago council faced an upward curve of inflation, a booming regional economy, several unfunded projects yet still found some spending to cut. They trimmed down the 2007 tax increase to 6.4 per cent and 5.49 per cent in 2008 (before this year's Servus Place review). 

To get the increase down, council put several projects on the shelf and found other ways to save, such as cutting in half the contingency fund for unknown costs and inflation. 

Fast-forward two years and inflation is still sky-high, but growth has dried up. The city continues to have more capital needs than money.

Now the formerly unpalatable seven per cent increase is preferred to 8.39 per cent.

Are there areas to cut this year? Stay tuned.

St. Albert budget: council's reaction Part 2 of 2

St. Albert homeowners face property tax hikes of 8.39, 8.42 and 7.84 per cent over the next three years, according to draft budget figures. (Full details won't be released until Oct. 27).

Here's what council had to say:

Coun. Roger Lemieux
"My first thoughts are I'm pleased," he said. "Just look around you, our society is having increases left, right and centre. Energy prices are going up. We're not immune, as a municipality, to those increases."

Lemieux said other municipalities are worse off than St. Albert, according to feedback from municipal peers at the recent Alberta Urban Municipalities Association convention.

"Medicine Hat, Calgary, Lethbridge — everybody was talking about double digits. As a matter of fact, places like Beaumont and Fort Saskatchewan are closing in on 15 per cent. Now, this is what the councillors are saying … they might find it will go down. We know for a fact Edmonton will be in double digits."

Lemieux, who celebrated the birth of his ninth grandchild on Thanksgiving Day, said he's sensitive to the plight of seniors and families on limited income. 

"Our provincial and federal governments have to come to their rescue. They're the people that built this country. They're our fathers and grandfathers."

Coun. Len Bracko
"This is what council asked (administration) to do, to come up with … an operating budget that keeps us operating at the same level of service that we had in 2008, with minimum increases. What we need to emphasize is the municipal inflation factor, compared to the (consumer price index)."

"In the city we have certain fixed costs — the agreements have been worked out. The municipal inflation costs hit us harder. That has to be looked at carefully."

Bracko said most members of the public understand the cost pressures municipalities are under. Council must emphasize how budgeting practices have "come from the dark ages" in recent years.

"We have our 100-year utility plan, we have our 10-year capital plans. we have our three-year budget plan and everything feeds into it … we're very well set up compared to 20 years ago. We're very transparent with it."

Coun. Gareth Jones
"This is just a sketch," he said of the figures released with the budget preview. "There's a lot of paint to go on it yet."

Like others on council, Jones found it difficult to comment on the proposed increases without know more about the details.

"Until we start plowing through the details, I don't know really how to comment about it. It still seems a little high to me. Until we see the details I don't know what to say."

Jones said it will be interesting to hear the public's initial comments at Saturday's mall visit in St. Albert Centre. 

"Even during election time, one of the major concerns raised by people was the tax increases. Going into the three-year budget they're obviously going to be very concerned. I'm one of them that's going to be very concerned as well, just from a citizen point of view."

"I can understand the problems everybody's facing right now — personal, business-wise or the city. Costs have gone up and there's not much we can do about that. Those are external costs that we do not have any control over. Those kind of costs are the ones that we have to look at closely. I don't know what we can do to adjust that."

St. Albert budget: council's reaction Part 1 of 2

St. Albert homeowners face property tax hikes of 8.39, 8.42 and 7.84 per cent over the next three years, according to draft budget figures. (Full details won't be released until Oct. 27).

Here's what council had to say:

Mayor Nolan Crouse
The mayor said he was surprised maintaining services, at 6.8 percentage points, will require the bulk of the 2009 tax increase due to inflation.

"Just to do nothing (no new spending), it's six per cent. That would suggest that all municipalities throughout Alberta would be at six per cent … it was a little bit higher than I had expected. I hadn't done the arithmetic myself, so it did catch me off guard."

Until details are released on Oct. 27, it's hard to know where to cut, he added, but promised to look for "how much conservatism is built into some of the plans."

"I'll give you an example. In Servus Place, what's truly built in, in terms of the anticipated operating costs? Based on the first nine months — and I haven't seen the exact numbers yet for September — Servus Place is operating at an average of about $100,000-a-month deficit.

"Early numbers on Servus Place that I had seen projected were $200,000 a month in 2009. Well, that to me is an example of perhaps building in conservatism."

Coun. James Burrows
Burrows said it's difficult to comment on the 2009-11 budget until all the details are released Oct. 27. The budget preview presented this week only included proposed tax and utility increases, along with a brief environmental scan.

"What's really, really hurt the city is there's just no housing being built. That extra cash we rely on, it's dried up," he said. "The budget has to be basically a keep-the-lights on budget and that's it."

Turmoil in the global markets is another reason why city council should not approve more than one year of spending, he added.

"Things have really changed a lot since June. Housing stopped. Stock markets had a crash and we're in a correction. We're hearing the United States might be on the brink of a recession. This is why it's a challenge to really plan three years out."

Coun. Lorie Garritty

"It's looking like we're going to have a less than 10 per cent increase, which I suppose is good news. It's going to be a challenge to get that down to six or seven per cent to something that might be more palatable to residents. 

"There are going to some tough decisions to be made — every budget year there is — but with the global economy, the national economy, what's happening out there … there's going to be some decisions we really have to struggle with."

Many inflationary pressures are beyond the city's control, he said, adding salaries represent a large portion for any organization. 

"The actual reality of the situation is we're still having to pay more to hang on to good people. There's still a fair amount of mobility in the workplace. People in municipalities are having to face the problem that if you don't pay your people well enough they're going to move on."

Garritty surmised it's possible to lower the tax increase by putting off some budget requests, but council can't cut the basics. "I don't hear any of the public saying let's lower our service standards."

St. Albert budget: have your say

City council is hosting the first of four public information sessions tomorrow (Saturday) at St. Albert Centre from 2 to 5 p.m. 

The mall visits are designed to be informal. It's a good opportunity for face-to-face dialogue about city spending priorities. Ask your questions and make your voice heard!

St. Albert taxes, services and Servus

An interesting bar graph jumps off the page of a city budget backgrounder. The graphic breaks down how much of the tax increase is needed for various city functions.

Here's the breakdown:

Protective services (fire, ambulance, police, bylaw): 2.31%

Corporate services (HR, finance, assessment, taxation, legal, communications, IT) : 1.95%

Land use/developments: 1.75%

Roads: 1.67%

Transit: 1.35%

If you're doing the math those percentage points combined equal 9.03 per cent, which is above the proposed 8.39 per cent increase for 2009.

The same bar graph shows the following:

Culture/recreation/FCSS (Servus Place levy): -0.64% (yes, that's a negative)

Could Servus Place really be responsible for bringing the tax rate down? Technically, yes.

City administration attributes the tax drop in that category to Servus Place's improved deficit situation, which spells good news for this year and beyond.

Don't break out the confetti just yet. It's important to remember St. Albert's budget does not start from scratch every year. Council reviews new spending.

Just six months ago council approved a $2.2-million subsidy for Servus Place that added 3.68 percentage points to the 2008 tax increase. (Council later cut spending elsewhere to bring the total increase down to 5.9 per cent).

So while the Servus Place subsidy could actually decrease next year and reflect well on the 2009 tax increase, there's still a lot of tax dollars supporting the facility.

Progress has been made, but take it with a grain of salt.

Why 8.39%?

City council insists the majority of next year's tax increase is needed just to maintain services. Some 6.77 percentage points of the 8.39 per cent tax increase will go to existing services.

The reason? For one, it's getting more expensive to to run a municipality, thanks to rising fuel and construction costs, wages and materials.

Secondly, St. Albert, like the rest of the region, is feeling the pinch from a downturn in new home construction. Fewer new homes means the city has fewer property tax dollars to collect. The city uses those new tax dollars to pay for new programs and services.

Growth forecasts are downright gloomy compared to past years. The city predicts the growth rate will be just 1.22 per cent in 2009. That will increase slightly to 1.75 per cent in 2010 and 2.0 per cent in 2011. Traditionally, St. Albert has been in the 4.0 per cent range.

Growth

While the 2009 figures show mostly a hold-the-line budget, growth does factor into the tax increase. Growth costs — mostly to maintain new areas of the city — can be attributed to 1.29 percentage points of the tax increase.

New initiatives

Only a small portion of the new tax dollars will pay for new initiatives. The share of the total tax increase works out to 0.33 percentage points.

Public reaction?

Does any of this information make tax increases of 8.39, 8.42 and 7.48 per cent in 2009-11 more palatable to the public? That remains to be seen.

One sure bet is council and administration will go at great lengths to explain the inflation pressures facing St. Albert and all municipalities in this province. (I'll write about the 'municipal price index' in later posts). But already St. Albert city hall is more than willing to point out Edmonton and other cities are facing possible double-digit increases.

The public has its first chance to sound off this Saturday at
St. Albert Centre from 2 to 5 p.m. Council members will be on hand to answer your questions and jot down comments.

It's your city, have a say.

8.39%, 8.42%, 7.84%

As promised by city officials in Saturday's print Gazette,  municipal tax increases will not reach double digits for the next three years.

City administration lifted the lid from the 2009-11 budget during a preview for the finance and audit committee on Tuesday. All council members sit on the committee, so it was their first opportunity to see the proposed increases.

Here's the proposed tax hike breakdown:

2009: 8.39 per cent

2010: 8.42 per cent

2011: 7.84 per cent

The 2009 increase works out to an extra $17 per month in taxes for the owner of $420,000 single-detached home. That's $204 a year for those without a calculator.

Utilities up 9.5%

Taxes are not the only means for a municipality to raise revenues. Utilities are also on the rise — 9.5 per cent annually for all three years of the budget. 

The utility hike means the average* monthly bill will rise $7.06 in 2009 to $81.37. That would increase to $89.10 in 2010 and $97.32 the year after.

* The city bases the average utility bill on 20 cubic metres of water consumption and two bags of garbage.

I'll have more information about the 2009-11 budget later in the day.

Welcome!

Welcome to Bryan's Budget Blog!

This will be my online home for the better part of two months as St. Albert city council reviews the 2009-11 budget.

This blog will keep residents up to date about civic programs and spending and what it means for St. Albert taxpayers. The issues are many, as we'll soon discover. These uncertain economic times only add to the complexity.

I'll post key budget information as it happens, along with background, insight and analysis. But my goal is to keep you informed and engaged during this process.

I welcome your comments and concerns about the budget and what it means for the future of our city. Feel free to send your questions my way. I'll do my best to find timely, accurate answers.

Stay posted!

Bryan