Dear Haysboro ,
As we enter into discussions for the 2017 budget, we are faced with some important and difficult decisions both as City Council and as a community. I attempted to explain that last week through a number of media interviews and as often can happen, particularly in print media where space often overrides context, some meaning got lost.
So, I would like to give you an understanding of where I am coming from as we have this conversation. And indeed, it must be a conversation between you, me, and the rest of the City. These types of decisions require us to consider the desires and needs not just for ourselves but also for our fellow Calgarians.
Developing a budget is always a balancing act. Essentially, with our taxes and fees we are buying services. Garbage collection, clean water, emergency response, parks and recreation, and libraries, to name just a few, are all services we receive as a result of taxes. Delivering those services is balanced by what we can afford and our revenues.
The original tax rate for 2017 set out in our 4 year plan two years ago was for a tax increase of 4.7%. Since then, with ongoing work by city administration, we have identified that we can maintain service levels as they exist today with a 3.2% tax increase for 2017. Over the past two years, city administration has found $86 million per year in efficiencies. That was a $50 million reduction in 2015, a further $36 million in 2016, and now they have committed to finding another $15 million in 2017. That is $100 million per year of efficiencies without impacting service.
Council received that information earlier in June and subsequently asked Administration to bring us back scenarios for tax increases ranging between 3.2% down to a 0% tax for 2017. To achieve a 0% tax increase we would need to identify about $66 million in cuts from our budget. With the already achieved $100 million in efficiencies, there are limited options left.
$66 million is not a small amount. To put that number into context, the funding for the Public Library is $40 million per year. Our snow clearing budget is $35 million per year. From a property tax perspective, the impact of every 1% increase results in an $18 dollar per year increase on the average home (today that is a home assessed at $480,000).
As well, property taxes go towards the operating budget and not the capital budget. So our construction projects around the City, from roads & bridges, to bikeways and BRTs do not affect the property tax. An example would be that the construction of a fire hall is not paid for through property taxes, but the firefighters in that hall are.
A second piece to consider as we look at our overall operating budget, primarily funded through property taxes, is that the majority of the City of Calgary’s labour force is unionized. As such, wages and salaries are determined by collective agreements across several bargaining units. These are contracts that were negotiated in good faith by all parties. 2017 marks the final year of many of the collective agreements across the City, so we can definitely anticipate a different negotiating environment leading to the next agreements.
As well, City Council wages have been determined by policy to be adjusted by the average change in weekly salaries of Alberta workers. If the average wage across the province goes up by 1%, Council salaries are adjusted accordingly. If the average wage goes down, which is where we are right now, then Council salaries will go down the same amount. I am a firm believer that City Council should not be adjusting or setting their wages themselves. That is why I support the formula established by a committee of citizens who examined Council compensation and determined the manner in which compensation is adjusted.
I very much would like to get the tax increase as low as possible. I want to have the discussion of which services we could see less of. I am certainly not advocating that we close our libraries or eliminate our snow clearing program. We will need to look across all departments & services to consider where we find the cuts. It has been typical of Council to exclude police and fire from budget cuts. With those two areas being among our largest budget spends, that increases the impact on other departments such as transit, parks, community and neighbourhood services, and recreation.
I would like to hear from you. Which areas would you be willing to reduce service in? Which are the most important to you to maintain service? How do you feel about exempting Fire and Police from budget cuts? What level of tax increase would you be willing to accept? (Understanding that we would all prefer a 0% increase!) As part of this conversation around the Council table, I need to hear your voice and be able to share your concerns and desires.
Please let me know your thoughts on this.
Thanks for reading and I hope to hear from you soon.
Councillor, Ward 11
The City of Calgary
Address: PO Box 2100, Stn M. #8001A, Calgary, AB T2P 3M5
Haysboro Community Association
1204 89th Avenue SW. Calgary, AB. T2V 0W4.