Re: ‘Report upholds St. Albert's high-tax rap,’ Jan. 1 Gazette:
This story contained information on how the finances of our city relate to those of five other cities of ‘comparable’ population size. A report available online from Alberta Municipal Affairs (AMA) contains fiscal information for 2008 for cities in Alberta. Comparable internal data for 2009 was used by city manager Bill Holtby to assert that he is managing our finances efficiently. He uses such data selectively as benchmarks for St. Albert. This type of skullduggery is used by company executives to ratchet up their annual compensation by millions of dollars. It can also ramp up taxes in St. Albert.
The use of medians to compare finances of St. Albert with the other five cities is not justified on at least three counts. The sample of five cities is too small, the data too variable, and population growth differs tremendously. For example, in 2008, revenue and expenditures for Medicine Hat were about double those for St. Albert and reserves were more than seven times larger. Rapid growth requires large capital expenditures for several years before taxes compensate for it. The population of Airdrie increased 40.7 per cent from 2005 to 2009 and 11.7 per cent from 2008 to 2009 (Municipal Affairs report). Population growth of Grande Prairie from 2005 to 2008 was five times that of St. Albert.
The finances of St. Albert must be viewed only in the context of this city and not other cities that have unique fiscal issues. Furthermore, per capita comparisons among cities assume equal age distributions, which is not valid. Property taxes are based on dwelling units and so should other financial comparisons. Please note that data available from Municipal Affairs excludes the last two years and represents rapid growth before the recession. They should not be used to guide fiscal management in 2011 and beyond. Council should advise Mr. Holtby to cease using invalid comparisons with other cities to justify increases in expenditures, which means increased taxes.
Don C. Thomas, St. Albert
