What would you do with $52 million? Let's drop the debt!
Property taxes are the primary source of funding for The City's operating budget and are also collected by The City on behalf of The Province, as required by the Alberta Municipal Government Act (MGA). Of the funds collected, just over h?alf remain with The City and the rest goes to The Province. The bulk of our infrastructure budget comes from Provincial and Federal grant programs.
Changes to the Provincial budget impact the amount of property taxes collected by The City on behalf of the Provincial Government. When the Provincial Government increases their portion by a lesser amount than previously estimated, or decreases it, this leaves The City in a position to either absorb that additional tax room, utilizing it for unfunded infrastructure or debt reduction, or to decrease the previously estimated tax rate.
Council direction (arising in the context of a June 28, 2011 debate) is that tax room funds are to be used for capital projects or debt reduction. A report to Council in April was debated that contained recommendations to place further stipulations on the use of tax room funds, such as the requirement to include information about future operating costs and consistency with the current multi-year Business Plan and Budget.
The current provincial tax surplus amounts to $52 million annually over the next five years. Under Council policy, this money cannot be used for operating expenses but must be used to fund the types of things that we often ask The Province to help pay for, such as one-time capital expenses or debt reduction.
To help us determine what to do with this money, we have asked Calgarians to participate by sharing your preferences and opinions with respect to five options. You can share your opinion by:
Council will carefully consider your feedback and make a decision in July.
The options under consideration are:
Although three face to face engagement sessions have already been held, three more opportunities are scheduled for this weekend:
- Chinook Centre: Saturday, June 1 from 9:30 a.m. – 1:00 p.m.
- South Centre: Saturday, June 1 from 1:30 p.m. – 5:30 p.m.
- Sunridge Mall: Sunday, June 2 from 11 a.m. – 3 p.m.
Over 100 members of the public participated in the May 22 event at Banker’s Hall, where I stopped by to discuss the options with attendees. Approximately 200 or 300 people came out for the May 28 public debate at Devonian Gardens as well. You can find out more information about these sessions at calgary.ca/52million.
Public debate – May 28, 2013
As I introduced the debt reduction option in Council, The Mayor asked me to represent this option throughout the public engagement period, including at the May 28 public debate. The debate was hosted by Mayor Nenshi and moderated by local businessman and entrepreneur, Brett Wilson, of Dragon's Den fame. Each of the five participating Alderman advocated for one of the five options that have been put forth to the public.
The full debate was recorded and broadcast. This CBC clip includes a portion of the debate in which I make the case for debt reduction.
Budget cycle aligned with four year Council terms
The Provincial Government passed changes to the Local Authorities Elections Act (LAEA) in December 2012 that will result in four year Council terms as of the October 2013 election. On April 22, 2013, Council passed a modified four year business plan and budget cycle in order to align with these changes.
In 2005, Council approved an integrated three year approach to business planning and budgeting. This process, now in its third cycle, sets three year priorities to guide the development of departmental business plans and budgets and an annual opportunity to adjust them as required.
The benefits of this multi-year approach have become well recognized, and include:
- Approving the longer-term funding that supports the identification and achievement of longer-term goals;
- Providing citizens with more certainty about the direction of City services, finances and taxation/utility rate levels;
- Making more strategic use of Council's time in reviewing plans and budgets, and the Administration's time in preparing them; and
- Allowing the flexibility to adjust approved plans and budgets to respond to changing circumstances.
About the changes
The change to four year electoral terms prompted a review of options regarding the timing and duration of business planning and budgeting. Earlier this year, we launched the "Let's Talk" initiative, asking citizens to be part of the decision-making process determining how to update the business plan and budget cycle to align with Council’s new four year terms.
In addition to the "Let's Talk" public engagement, City of Calgary staff provided input and expertise through workshops and interviews, as did the Mayor and Council Members.
The modified four year cycle will extend the current approach to span a four year time frame, with a more extensive review opportunity in the third year of the electoral term for Council to reconsider its priorities and direct any changes to the approved business plans and budgets. Departments will begin by preparing four year business plans and budgets based on the priorities and guidelines set by Council.
The business plans and budgets will be developed for Council review and approval at the end of the first full year of the new electoral term. Council will be asked to approve the four year plans and budgets, including all rates and fees required to balance four years of operating budgets, while still adopting the budget one year at a time, as required by legislation. An annual adjustment process also provides the flexibility to make adjustments in response to external factors and changing circumstances.
This approach builds on the strengths of the current three year cycle and provides a significant opportunity in the middle of each Council term to review the socio-economic outlook, revisit Council priorities and re-engage citizens, and then adjust the remaining two years of the plans and budgets as required to adapt to changing circumstances.
For more information on the full engagement process, results of the citizen engagement, and the Modified Four Year Cycle approach to Business Planning and Budgeting at The City, you can visit calgary.ca/ourfuture or review the Full Council Report and Business Planning & Budgeting alignment Engagement results (PDF).
West LRT Land Disposition Strategy
As part of the West LRT project, a land acquisition program was undertaken to secure the lands necessary to accommodate the new line. With the opening of the West LRT line and construction completed, the remaining surplus City-owned properties need to be addressed and a strategy for how to divest of these parcels considered.
Administration undertook an analysis of the City-owned properties associated with the West LRT project and determined their potential for sale. In total, the West LRT Land Disposition Strategy has identified and classified 92 City-owned parcels according to their saleability. Of the 92 parcels, approximately 58 parcels or portions of parcels are deemed potentially saleable and an estimated 34 parcels (or portions) have been identified as required for future City uses such as road widening or greenspace.
The properties have been grouped into categories based on the level of effort required to be able to sell them. Currently, ten properties are identified as immediately saleable, one of which is currently on the market. These properties are deemed to be reasonably saleable over a one year time frame, with the exception of one property.
The second group, which includes 14 properties, primarily require registration of a road plan and are expected to be available for sale by early next year. The third group, including 36 properties, are more complex and the timeline to bring them to a market is significantly longer. It is also difficult to estimate their potential value at this time. The fourth group of 34 properties, identified as "not for sale," are those which the City requires for future uses.
The most prominent parcel in Ward 6 is in Christie Park at 17th Avenue and the west side of Christie Park Gate SW. This land will be carefully studied by the City to determine if there are departments that need a site in this location. Typically this would be for utility or operations activities. If it is not needed, it could be offered to the market for sale.
I welcome your thoughts as to the most appropriate use of the land. To date, residents have suggested keeping it as a park, encouraging services such as medical and health offices or a multi-unit residential complex.
The site offers a unique feature for a potential LRT commuter, a short walk downhill to Sirocco Station in the morning and a short walk downhill from the 69th Street Station at the end of the day!
You can view maps that show the different property groupings here.
Back to May 2013 report
This content represents the personal views and opinions of the Ward Councillor and should not be taken as a statement of policy of The City of Calgary. The inclusion of any external content does not imply endorsement by The City of Calgary.