City of Red Deer
‘Common Sense’ says City Council should avoid potentially massive tax increase
Submitted by Common Sense Red Deer
By Chad Krahn
More than a month later than normal, the City has finally released its proposed budget adjustments.
The numbers give Council – and the public – a much clearer picture of the City’s finances.
They’re not great.
They’re not even good.
In fact, the picture the proposals paint is pretty bleak.
The City is facing a $16.1 million shortfall, and is rapidly approaching its debt limit.
The reserves are also nearly gone as a result of using those funds to cover the shortfall in previous years instead of making a major course correction.
The tax increase to make up the shortfall is in the double digits – 10.65 per cent.
That’s a huge increase, but it’s made even worse by the fact that there’s no extravagant infrastructure project or big spending item on the books – it’s simply to maintain the operational status quo.
Let that sink in. For the City to continue offering the same level of services, they will need to raise taxes by 10.65 per cent.
Compare that with Statistics Canada’s November inflation rate – and Alberta’s projected 2024 inflation rate – of 2.5 per cent.
The City’s expenses are outpacing inflation and, more importantly, economic growth.
Council will hopefully do its best to soften the blow when the budget adjustments are actually debated later this month, but the built-in deficits that have crept into the budgeting process are going to haunt us.
Nearly every other municipality had their budget debates take place in November, but Red Deer’s are taking place on January 23-26.
Council will be left with the unenviable decision to either raise taxes, cut services, drain reserves or sell off assets.
If only there had been a way to prevent this.
Where are the learnings from the last few years? Where is the commitment to incremental improvement? A system of asking the front line staff ‘what is the next simple thing we can do to make this better’ to find that smart, bottom-up change. Taking that feedback to innovate and automate the way the City does business before we end up staring down big tax increases and no economic growth.
Red Deer’s population has largely plateaued, and consequently, so have housing starts.
Contrast that with other cities in Alberta – Calgary, Edmonton, and Lethbridge are all seeing their populations grow and new homes being built.
Alberta as a whole had such high rates of interprovincial migration that they ended their “Alberta Is Calling” program, originally designed to attract people to the province.
Worse still, Red Deer has the highest unemployment rate for a major region in Alberta.
Why is Red Deer stagnant?
The status quo approach to business hasn’t worked. The City interacting with business the same way it always has is producing diminishing returns.
We need a Council Committee on Red Tape Reduction, along with a dedicated commitment to reexamine the building code and a promise to industry to have a guaranteed turnaround time on issuing permits.
The downward trend in economic growth should have already set a five-alarm fire for the City. After all, they had to know how dire the financial situation already was.
Alberta is growing, and comparable cities across the province are all growing, but Red Deer’s graph is pointing in the wrong direction. The budget document even says that the city’s economic development resources are spread too thin and generally focused on land development and sales.
It also notes that economic leaders should all be in alignment, but the budget documents admit that the alignment isn’t there.
Getting our economic drivers aligned should be a top priority – getting all of Team Red Deer firing on all cylinders needs to happen immediately.
We can’t wait until some new report comes out in 2025.
We know what the problems are.
We’ve known for a long time.
This is an incredible place to live, yet somehow, the story is going untold.
Red Deer could be so much more.
Chad Krahn is the Executive Director of Common Sense Red Deer.
City of Red Deer
Council ends reduced fine option for early ticket payment, school and playground zones start at 7 AM
City Council approves first reading of updated Traffic Bylaw and General Penalty Bylaw
Red Deer City Council completed first reading of updated Traffic Bylaw (3707/2025) and General Penalties Bylaw (3036/A-2025) that will provide clarity and consistency in application of the bylaws as well as eliminate challenges in enforcement.
Key updates to the bylaws include:
- Ticket Pre-Payment:
- Removing the option to pay a parking ticket early to receive a reduced fee from the General Penalty Bylaw and adding it to the Traffic Bylaw.
- School and Playground Zone Start Times:
- Through investigating requests from schools to have school and playground zones start at 7 a.m., rather than 8 a.m., Administration determined that almost all school and playground zones in the city have students on the street prior to 7:30 a.m. To be consistent across the city, the start time is being moved to 7 a.m. providing an added measure of safety for all students.
- Salt on Sidewalks:
- Removing the provision prohibiting the use of salt on sidewalks as this provision was rarely reported and it is difficult and costly to enforce.
- Permits:
- More structure was added to the bylaw to clearly articulate conditions and requirements of Use of Streets Permits, as well as Excavation Permits and Alignment Permits.
- Lastly, fees for closures impacting on-street and off-street stalls have been adjusted to reflect the actual revenue in each parking zone rather than the flat fee.
- Penalties:
- Penalties have been reviewed and updated.
- During the last bylaw adoption, the penalty associated with vehicles being towed due to snow or street sweeping operations was inadvertently missed. This penalty has been added back in at a slightly higher amount due to an increase in the cost to tow a vehicle through The City’s contractor. This prevents the costs associated with towing vehicles during these operations from being subsidized by the tax base.
“These updates streamline the bylaws to create clarity for residents and administration,” said Erin Stuart, Inspections and Licensing Manager with The City. “They also help to eliminate regulations that are challenging to enforce and bring penalties in line with other City Bylaws.”
Second reading of both bylaws is anticipated for January 27, 2025.
Westerner Exhibition Association (WEA) loan agreement adjusted
City Council passed second and third reading of a loan amendment bylaw to suspend interest and principal payments related to a $19 million WEA loan with the goal to further support WEA’s financial sustainability.
The item was back in front of Council today after first reading occurred in December 2024, at which time Council expressed the need for a more detailed report on the impacts of WEA’s loan on the City’s financial position.
“Today’s decision is all about providing WEA additional time to achieve financial stability while recognizing its role in generating significant economic activity in the region. WEA hosts 1,500 events annually and welcomes 1.5 million visitors each year,” said Mike Olesen, Growth and Finance General Manager.
Between September 2021 and today, City Council has continued to adjust and respond to the evolving needs related to the loan agreement.
Recently, The City of Red Deer, Red Deer County, the Westerner Park Foundation and the Donald family each contributed $500,000 to the sustainability of WEA. Normally under the existing terms of the loan agreement and loan bylaw, this injection of cash would trigger a loan payment back to The City. However, the intention is to give WEA the time and funds to recover and reach sustainability and today’s decision to suspend interest and principal payments on the $19 million loan responds to this need.
With these adjustments to the conditions of the loan, WEA must still pay the loan in its entirety by the end of the loan’s term. This decision has an impact on the City’s financial position in the short term, but as WEA ‘s financial performance stabilizes, payments on the loan are anticipated to return. This is some of the additional information provided to City Council today.
“To reiterate, this does not mean that the $18.7 million remaining debt is forgiven, but rather that The City must temporarily report a change to our financial statements to better reflect the real value of the loan at a point in time,” said Mike Olesen, Growth and Finance General Manager.
“Westerner has a three-year business plan, and its success is contingent on the changes made today, and the involvement and contributions of partners, including the Province. We still need to continue to recognize the realities and time it takes to recover being a major agriculture society and event centre in our Province and region,” said Tara Lodewyk, City Manager. “The Westerner is working hard to make positive changes that improve its financial situation and the experience for our community. We can all help. It is as easy as choosing to attend one of the many events at the park, and we encourage our citizens to do just that.”
With today’s decision, loan payments will be paused until April 1, 2027, enabling WEA to focus on its recovery plan. This suspension aligns with ongoing financial contributions and recovery planning efforts by The City, Red Deer County, the Province of Alberta, and other stakeholders.
During this period, Westerner Exhibition Association will present annual financial updates to City Council.
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