With the city’s 2015 preliminary budget forecast sitting at a 3.42 per cent increase, some might ask why was last year’s so low, while this year’s is high?
Why not try and avoid such spikes?
The 2014 budget increase was the lowest increase in a decade at 1.18 per cent.
“Personally, this is me only, I only deal with budgets one year at a time. I don’t pay much attention to year two,” said Mayor Nolan Crouse. “I think it’s unwise for a CAO to deliver a budget where he or she is looking much beyond one year.”
Crouse did point out there are some communities that budget for multiple years at a time, but that’s not how St. Albert handles their financial planning. There’s the next year’s budget, a three-year plan and a 10-year capital plan – but they’re revisited every year.
He doesn’t subscribe to the theory of averaging out an increase over two years – and said he personally hasn’t heard complaints about fluctuations in the tax rate.
“I think what taxpayers generally say across Canada, St. Albert, whatever, is I don’t like paying taxes,” he said. “Most of us would like to see taxes frozen.”
The tax rate when the budget process starts and the tax rate when the budget is finally passed are often different, Crouse said. Council will often cut some items.
“I’d be surprised if it’s over three per cent,” Crouse said of the 2015 budget. While the mayor can’t guarantee that, he said he could “strongly project it’s going to be less than three per cent.”
City manager Patrick Draper remembers predicting last year that the draft budget staff presents to council would be higher than last year’s predicted 2.1 per cent.
“One of the big drivers last year in getting the rate as low as it was, was that we were able to find internal efficiencies,” Draper said. “As we come into the 2015 budget year, those efficiencies are still carrying on, but we don’t have new ones.
“We’re running out of low-hanging fruit … in terms of being able to find some cost efficiencies. I have to present a budget where there’s no change in service levels, so I can’t present a budget that we’ve changed the frequency of how often we cut the grass,” Draper said. The no-service level change is enshrined in policy – only council can authorize changes to municipal service levels.
Draper said that when preparing the 2014 budget last year, the efficiencies helped balance out inflationary pressure. They are still facing inflationary cost pressures for things such as electricity or wages.
To “smooth out” the amount of the increase he said he would have essentially had to not identify as many cost savings for the 2014 budget and “in essence, have spent money that we didn’t really need the money for.”
Draper did note that there is now a policy in place where new tax revenue in 2015 is split, with 25 per cent going to tax relief and the other 75 per cent going toward projects associated with supporting the new homes or businesses the revenue is associated with.