Budget 2020: 5 Things to Know

Council just approved the budget for 2020. I’m very happy with the work that went into it.

This was a challenging budget. There are big needs in our community that require increased resources. At the same time, federal and provincial decisions will cost the City millions next year.

Budget 2020 creates more spending in priority areas while absorbing the changes made by other governments. At the same time, it will reduce our tax burden when measured against inflation.

Here are five key things to know about Budget 2020:

  • It has big investments in roads and safety

  • ~$4.5 million will be lost to senior levels of government

  • Downtown Rehabilitation will continue in 2021

  • Big savings were found throughout the City

  • Taxes are down this Council term

Following is more information. If you want to share something on social media, a “Budget 2020: 5 Things to Know” infographic can be found at the bottom of this post.

BIG INVESTMENTS IN ROADS AND SAFETY

Safety is a big concern in our community. From data I’ve seen, Grande Prairie is a safe place to live and that isn’t changing. However, we want to keep it safe. And many people are feeling less safe, which is a huge concern. So Budget 2020 has big investments in safety. These include:

  • 5 additional City RCMP members

  • $500,000 in cash and gifts in kind for a new Youth Emergency Shelter

  • $250,000 set aside for safety related special projects

  • $250,000 to make City facilities more accessible to residents with disabilities

Basic infrastructure is also a priority in the City. Residents rightly expect roads, public facilities, and other City property to be in reasonable condition. And neglecting proper maintenance can create huge costs in the future. Budget 2020 sets aside significant investments to better maintain roads and other infrastructure. These include:

  • Over $2,000,000 more in tax dollars dedicated to capital projects, including road rehabilitation

  • Resources to better estimate the costs of projects so that they can be managed better

  • Resources to better understand and plan for the lifecycle repair and replacement needs of City infrastructure

~$4.5 MILLION WILL BE LOST TO SENIOR GOVERNMENTS

Senior levels of government are making significant changes in 2020. These will cost the City big time.

Changes from the province include:

  • The City will receive a lower percentage of court fines (~$800,000)

  • The City now has to operate the old bypass (~$750,000)

  • Infrastructure grants are being reduced (~$730,000)

  • Less funding to provide roads, police, fire, and other services to provincial buildings ($210,000)

Additionally, the federal government is increasing its RCMP fees. In 2020, the cost of our police contract will go up by a little over $2,000,000. This doesn’t account for any new officers- it is just to receive the same level of service that we received in 2019.

My take on these changes:

I’m not fundamentally opposed to most of them. Right now, the provincial government is working hard to reduce costs: it makes sense for municipalities to share in this work. And the federal government is requiring more for the RCMP to reflect true costs: it’s appropriate for all municipalities to pay for the full cost of their policing.

I don’t mind that the City is losing money to senior levels of government.

However: these changes do have significant local impact. And that should be recognized. For example, $4.5 million is equivalent to a property tax increase of ~4%. Budget 2020 has a tax increase of only 1.25%, which is below inflation. But if there were no changes coming down from the federal and provincial governments, this would change into a decrease of 2.75%.

(Worth noting: you can click here to get more information about these government changes, including why I strongly object to one of them. You can also click here to get more information about how police funding works in Alberta: Grande Prairie is one of a minority of municipalities which has to pay for its own police.)

DOWNTOWN REHABILITATION WILL CONTINUE IN 2021

Council voted to go ahead with Phase 4 of Downtown Rehabilitation in the summer of 2021. This will include underground pipe, road, and sidewalk replacement on 100 Ave between 100 St (CIBC) and 98 St (Co-op).

The Downtown Association as well as a majority of businesses in Phase 4 were in favour of going ahead with this project. Its benefits include:

  • Replace underground pipes before they fail: most are clay, and many are 75 or more years old

  • Increase the size of underground pipe to allow for future higher density re-development

  • Replace broken roads and sidewalks: they have deteriorated to the point that they would likely have already been replaced if they were elsewhere in the City

  • Increase the accessibility of the street for people with disabilities

  • Allow for the installation of City fiber optic cable: this will save the City money as it transfers data between City facilities

  • Allow for the installation of a new parking management system

  • Extend the modern look and feel created by earlier phases of Downtown Rehabilitation

Currently, there are no further plans to do work downtown after Phase 4 is complete in 2021.

BIG SAVINGS WERE FOUND THROUGHOUT THE CITY

For a couple years now, City management has been working hard to use public money better. Significant work has gone into spending money more efficiently, and into better aligning spending with community priorities (more can be found about that work here).

This work to find savings was very important in forming Budget 2020. It includes approximately $6,000,000 in spending reductions across many City departments. As part of these reductions, the City will be decreasing its workforce by 31 full time positions.

Thanks to the hard work of our staff and management, these reductions will have minimal community impact. Many of them reflect increased efficiencies within the City: they won’t have any direct impact on residents. However, some of the reductions do involve changes to front line service. But I’m very comfortable with the service reductions our community will see- I’m confident that they will not significantly decrease quality of life in Grande Prairie.

TAXES ARE DOWN THIS COUNCIL TERM

2020 will be this Council’s third year in office. Since it was elected in 2017, taxes will have gone down by 0.9%.

Checkout this graph. The blue line shows where taxes have gone this Council term (-0.9%). The orange line shows where they would’ve had to go to match inflation (+3.9%). The grey line shows where they would’ve had to go to match inflation plus the government changes being made in 2020 (+7.9%).

cumulative budget 2020 no title.png

If Council could reduce taxes in 2019, why couldn’t it do it in 2020?

There are very real cost pressures on the City. Not only are senior governments taking ~$4.5 million out of the budget, but inflation also adds to our expenses every year. There some key areas (including safety and infrastructure maintenance) requiring increased investment.

In 2020, holding the line or decreasing taxes would’ve required much greater cuts than have already been made. These would’ve meant slashing services to a degree that would not be acceptable to the community. So Budget 2020 includes a modest tax increase that is lower than inflation: 1.25%.

This increase refers to the tax bill an average residential property will receive: a typical household in Grande Prairie will pay $37.87 more in 2020. This number will not change if average assessed values go up or down (click here to learn more about how property taxes get set).

Worth noting: this budget would’ve delivered a 2.75% decrease if the federal and provincial government had made no changes to City costs and revenues.

That’s what I think are the most important aspects of Budget 2020. However, I’d also encourage you to read the City’s official summary by clicking here. And if you want more detailed information, I wrote a series of blog posts leading up to and throughout deliberations: click here to see them.

As always, I welcome any feedback, comments, or questions you might have.

You can comment here. You can call me at 780-402-4166 or email me at dbressey@cityofgp.com. Or you can find me on Facebook through my official page or in the GP Round Table group.

Finally, please consider letting your friends know about Budget 2020 by sharing the infographic below.

Thanks for reading!

-Dylan

Dylan BresseybudgetComment