Mayor appeals for cuts

The mayor is the public face of city council. He chairs the meetings, works full-time and attends pretty much every event of significance in St. Albert.

But when it comes to trimming next year's near 8.97 per cent tax hike, Nolan Crouse is just one vote among seven. 

Sometimes the votes don't go your way.

That was the case Saturday, when council approved $1 million to top up road maintenance next year. The extra spending — which city engineers did not request — will be funded with a mix of grants and tax dollars.

In the lead up to Saturday, council had managed to trim $245,000 worth of tax-funded projects from the 2009-11 capital budget. In theory, that's money they could have cut from the capital fund to reduce next year's tax increase by 0.4 per cent.

Coun. Len Bracko had other ideas when he said council should increase infrastructure spending by $1 million. With some $3 billion in infrastructure assets, the city doesn't put near enough dollars into maintenance, he argued.

Crouse, however, strongly objected to putting dollars into a pot "without any level of specifics."

But aside from Carol Watamaniuk, the mayor was alone on this one, and clearly frustrated.

Just minutes later, while defending a motion to cut $200,000 for a backup disaster recovery site, Crouse delivered a pointed speech.

"We must, sooner or later, make some tough decisions," he said. "We were at 8.9 per cent and any of the pay as you go (tax dollars used for capital projects) we freed up, we continue to find ways to spend."

He later added this lecture: "I need to remind council of our priorities. I clearly think we need to make tough calls."

Council begins debating staffing requests on Monday. They'll resume committee of the whole budget deliberations after the regular council session.

Bypass needed

The City of Red Deer wants $107 million from the province to pay for a $133 million northern bypass.

While this isn't exactly related to St. Albert's 2009 operating or 2009-11 capital budget, it's an issue that relates to our local history. I suppose there's a slight budget tie in with the $45 million in the 2009 budget for stage three of our bypass, Ray Gibbon Drive.

Perhaps Red Deer will be able to swing a similar deal with the province.

Reserves aren't free

With $130 million at stake, it's a heady task to prioritize which capital projects deserve to be in the 2009-11 budget. Sometimes the funding source is the deciding factor in the debate.

During capital budget debates this week, council members scrutinized how each project could be funded. Capital projects and equipment are funded with a mix of government grants, reserves, property taxes, offsite levies and, in rare instances, debt.

Council took keen interest in whether projects could be funded with grants, reserves or pay as you go (a fancy term for tax dollars that are set aside annually for capital projects).

Coun. Lorie Garritty defended the construction of a $140,000 dog park, arguing it won't cost taxpayers because the money is coming from reserves. (And a $10 hike to dog licence fees will eventually replenish the account).

Alternatively, reserves sometimes come into play when council does not want to support a project.

Mayor Nolan Crouse used reserves as part of his rationale for not approving two projects this year — extra funding for the St. Albert Housing Society's $19-million apartment building project, and the AltaLink relocation. Of the later, he said council would have to raise taxes to replace the $450,000 needed.

(I do not mean to single the mayor out, but those are the two most recent examples. And by the way, council did give the housing society $150,000 for that project, about $90,000 less than requested).

The whole idea behind a reserve is to accumulate cash to avoid a large single-year tax hit. Depending on the type of project, reserves are funded through developer levies, utility fees or taxes. Some $2.7 million in property tax dollars will be transferred to reserves next year for future capital needs.

Crouse and Garritty both have a point. Reserves do not immediately cost the taxpayer, but in the long term there can be a cost impact.

Reserves are not free.

Spending cuts, additions

Council started debating the 2009-11 capital budget this week. The debate continues Saturday morning with the capital budget and staffing requests on the agenda.

Here's a list of changes council has made so far.

• Add $400,000 for the community tourism strategy (approved)

• Add $160,000 for a community recognition tribute in the downtown (approved)

• Add $75,000 for upgrades to the Mission tennis courts (approved)

• Delete $371,200 for affordable housing (approved - St. Albert Housing Society has already committed to raising this money)

• Delay $275,000 for St. Albert Place repairs by one year (approved)

• Delete a $200,000 study for a satellite public works shop (approved)

• Delay $44,000 for a municipal enforcement officer patrol car until 2011 (approved)

• Delay $25,000 for murals in Servus Place until 2010 (approved)

A few motions to cut funding were defeated:

• Delete $135,000 for civic building security upgrades 

• Delete a $27,000 truck purchase for Fountain park pool (defeated)

Fuel savings

Declining fuel prices could save the city $375,000 in 2009. That could lower next year's 8.97 tax increase by about 0.6 of a percentage point.

The savings is due to the administration revising its fuel forecast, lowering it by 25 cents to $1.25 per litre. The original estimate was calculated several months ago, before the price of crude went into the tank.

The $375,000 in savings are based on 1.5 million litres of consumption.

Mayor Nolan Crouse introduced a motion at tonight's budget meeting to make the fuel forecast official. It still needs to be debated, likely next week, but really is  just a formality.

Debate begins

Officially, city council was not supposed to begin debating the 2009 budget until Wednesday.

However, council informally kicked off debate on Saturday after members traded words with two separate organizations.

The first came when St. Albert Taxpayers' Association president Lynda Flannery presented her organization's views about civic spending and the proposed 8.97 per cent tax increases.

Flannery recommended council to cut spending by reducing staffing positions and growth-related capital projects. She criticized both the city's use of the municipal price index and municipal comparators as justifications for increased spending.

With the economy slowing, Flannery said the city should hold off on completing stage three of Ray Gibbon Drive until development begins in the annexed lands. She also recommended slowing down recruitment for fire hall No. 3 until growth picks up.

The Riel Park reclamation work also fell under the association's scrutiny. Flannery said the city should proceed with landfill capping and grading in the area, but not the $6.8 million needed to return areas like the soccer and rugby club back to their original state.

Coun. Lorie Garritty applauded the association for providing feedback about the civic budget. However, he took the opportunity to rebut several of the association's suggestions, particularly for Riel Park.

Normally, that kind of rebuttal is not tolerated by the chair. Council debates council, not public appointments.

Later the same meeting, Mayor Nolan Crouse participated in a debate of sorts about the need for a $20-million branch library. The mayor said the proposal — which is not contemplated for at least three years — does not add up when looking at a 10-year decline in library membership and visitors.

While it would be an overstatement to call the subsequent exchange with library board chair Kelly Aisenstat "heated," it was more tense than most placid dialogue at council meetings.

It concluded with the mayor asking the library board to "invite me to the library when it's full."

At least council is warmed up for what could be several more hours of debate.

Mirror, mirror

Residents are facing an 8.9 per cent tax increase and a hike to utility rates that is near double digits.

We're talking about St. Albert, right? 

Nope, Strathcona County.

According to the Sherwood Park News, Strathcona County is looking at an 8.9 per cent property tax increase, and 9.9 per cent utility rate hike.

That's rather close to St. Albert's 8.97 per cent tax hike and 9.0 per cent utility rate increase.

One wonders if the parallel is due to similar budget assumptions, such as sharing the same municipal price index.

Given the 13 per cent Edmonton is facing, it appears times are tough in the region.

Cash flow, round three

City council has raised a scalpel toward next year's 8.97 per cent property tax increase.

By Tuesday, more than 60 motions were raised to cut or add funding. The cuts amount to $2.7 million for 2009 alone, with other capital changes proposed in 2010 and 2011.

Spend thrift

Here's a sampling of recent cuts proposed for 2009. (For past motions click here).  

• Cut $371,2000 for affordable housing from the capital budget. (Lorie Garritty). Note: the city previously asked the St. Albert Housing Society to raise the funds, as a condition of $740,000 in grant. 
• Cut $200,000 from Servus Place's material, goods and supplies budget (Nolan Crouse)
• Cut $105,800 for Riel Recreation Park operations (Nolan Crouse)
• Cut $100,000 from the snow and ice removal budget (Nolan Crouse)
• Cut $100,000 from Servus Place's contracted and general goods budget (Nolan Crouse)
• Cut $30,300 for a landscape technologist (Nolan Crouse)
• Cut $32,100 from the environmental management system program by reducing proposed staff to a half-time position (Nolan Crouse)
• Cut $25,000 from the 150th anniversary budget (Len Bracko)
• Cut $25,000 for murals at Servus Place (Roger Lemieux)

• Cut $20,000 for SmartDriver program (James Burrows)

More cuts

A few motions targeted significant capital spending beyond 2009:
• Cut $2.4 million from the 2010 capital budget for Riel Park landfill reclamation (Nolan Crouse)

• Cut $1.4 million from the 2010 utility capital budget for Riel Park remediation (Nolan Crouse)

Hold off

Council also made a few motions to delay spending:
• Defer for one year $216,200 from snow and ice control budget (Len Bracko)
• Defer for one year $225,000 for a tandem truck/snow plow (Len Bracko)
• Defer for one year $400,000 for St. Albert Place upgrades over 2010-11 (Nolan Crouse)

Spend more

Council members also introduced motions to increase or fast track spending:

• Fund $88,500 for RCMP youth asset development officers starting in 2009, not 2010; Fund $205,000 for asset development in 2010, not 2011 (Lorie Garritty)

• Fund $25,000 for a train whistle bylaw (Nolan Crouse)

All motions will be debated starting Nov. 26.

Debt solutions?

What to do when faced with a double-digit tax hike? If you're Edmonton Mayor Stephen Mandel, the answer is simple: take on debt.

Mandel this week unveiled a unique plan cut Edmonton's proposed tax hike to 2.6 per cent, down from the 13.1 per cent proposed.

Using debt in more creative ways has also been discussed in St. Albert, where city council was briefed at a committee meeting a few weeks ago.

Corporate services GM Dean Screpnek said at the time the city could inject $50 million into the 10-year capital plan without adding a dime to tax bills. The plan identifies $730 million worth of projects, but the city has funding to complete less than half.

By borrowing the city could shift dollars that it normally would put into the capital fund each year and use that money for debt financing. The $50-million sum was based on debt payments (principle and interest) of $3 million a year over 20 years.

Granted, the borrowed $50 million is less than the $60 million the city would have put into the capital fund over 20 years. But as Screpnek pointed out, with construction inflation factored in over 20 years there's a good chance the city would come out ahead by borrowing and building the projects today.

The added benefit is the city would immediately benefit from the new infrastructure, rather than waiting several years for funds to accumulate.

Of course, every plan has a down side. Coun. Len Bracko can't stomach the idea of handing down more debt to the next generation. The city's debt is already at $1,218 per capita. Bracko has introduced motions not to take on debt as proposed in 2009 for fire station No. 1 ($8.5 million) and stage three of Ray Gibbon Drive ($1.9 million).

This all shapes up for a good debate when council starts reviewing the 2009-11 capital budget next Tuesday.

Power line plot thickens

Mayor Nolan Crouse threw another curve ball into future budget debates about the relocation of the AltaLink power line.

Crouse today introduced two motions. The first would see the power line relocation moved to the "unfunded" list in the 2009 budget. That means the city would not put dollars toward the move next year.

The second motion was to return the $300,000 the province gave the city for the estimated $1-million relocation. Crouse also wants to decline the $450,000 that AltaLink pledged for the move.

Council won't debate either motion until Nov. 26 at the earliest.