This week St. Albert’s 2018 proposed budget was presented to council, along with the 2018-20 business plan.
The budget outlined a harsh reality: with the city’s current funding, there are few capital projects that can be built in the near future.
The city’s 10-year capital plan is merely a wish list at this point, as city staff recommends 25 of 42 capital projects be delayed or unfunded. Delaying does not fix the issue, as next go around there will be similar funding shortfalls and more projects to fund.
“The city currently faces a significant funding shortfall over the next 10 years, which results in limited ability to fund future growth projects,” city manager Kevin Scoble said.
This puts our new mayor and council in a tough situation. If our city is going to continue to grow, we need to fund projects that makes St. Albert an attractive place to live and do business. But how are such projects funded?
Raising taxes is one possibility, but residents already pay comparatively high taxes compared to other places in Alberta. Raising taxes makes the cost of living higher, which makes it harder to attract newcomers and retain residents.
Cutting expenses is another option, though it’s politically difficult. Residents don’t ever want to see service levels go down. Though many politicians campaign on ‘finding efficiencies’, there are only so many efficiencies to be found, and they aren’t material in the big picture. It’s popular to want to cut spending, but not as popular when the snowplow doesn’t visit your neighbourhood until two weeks after a heavy snowfall.
In an editorial board meeting with The Gazette this week, Mayor Cathy Heron suggested that the city may need to consider taking on debt for some projects. St. Albert currently boasts a low per capita debt when compared to other places, so it is an option that should be explored but it’s not a long-term solution either. Paying later is just another form of delay and we need to be wary of putting a burden on future generations.
So what does council do? St. Albert has, over the years, inched towards an 80-20 tax assessment split between residential and non-residential respectively. But inching is no longer acceptable progress, as evidenced by the precarious situation in which the city finds itself. If meaningful non-residential growth does not occur in St. Albert over the short term, there will be little choice but to foist substantive tax increases upon homeowners if St. Albertans are to enjoy current service levels. The city needs to execute a ramped-up economic development strategy.
The city will continue to grow and so too will the ‘needs.’ Pressure is mounting for the city to build more recreational and community facilities. We also need to repair, maintain and replace (RMR) infrastructure we have, which also isn’t cheap – the city is projecting to spend more than $22 million on it next year.
The newly elected city council will not have a long honeymoon period to enjoy. The city is at a crossroads.
How Mayor Heron and council balance the funding shortfall against the need for capital projects could be the defining issue of the next four years.