In 2006 the St. Albert Council passed the first two year budget in the City's history.
This two year budget allowed the past Council to extend its policy mandate for an extra year and set a budget for 2008 as well as 2007.
As matters currently stand four members of the 2004-07 Council (Crouse, Bracko, Burrows and Garritty) were re-elected for another three year term. Unfortunately, the three new members of City Council (Jones, Lemieux and Watamaniuk) have been placed in the unhappy position of being held responsible for a budget they have had no part in preparing and the people who elected them have been denied the right to have these new Councillors play a major role in setting the 2008 budget.
This has never happened before in the history of St. Albert. All members of a newly elected Council have played an equal role in setting the new budget.
In the past a budget committee has been struck, City administrators would appear in front of the budget committee and answer questions and account for their past as well as their proposed future spending. Business plans were reviewed and input was invited from the general public and the business community.
No equivalent budgetary activity has been initiated by the present Council even though the 2008 budget prepared over a year ago was largely based upon the 2007 budget. Instead a piecemeal approach is being taken towards trying to salvage the two year budget system.
The Servus Place business plan is unsound. It will generate a multi-million dollar deficit in 2008. The City administration claims it will be months before an outside consultant will be able to advise them if the Servus Place problem can be fixed in whole or in part.
Some of the specific reasons the Council Budget committee needs to swing into action are as follows:
(1) If expenditure reductions are going to be made to 2008 City programs to partially offset the negative impact of the projected large Servus Place deficit on taxpayers then it is absolutely essential that such cuts are made as early as possible in the new budget year;
(2) If cuts aren’t going to be made to existing programs and if new program spending isn’t going to be postponed then consideration has to be given towards determining how much of the excess spending will be covered by tax increases and how much of the new grant money flowing from the provincial and federal government programs will be diverted and earmarked for Servus Place;
(3) (3)Certain of the City's reserve funds were drained by the past City Council in the run up to the election in October. Matters are compounded by the fact the present Council has stripped capital reserve funds from Servus Place and used the so-called surplus from “savings” on the capital borrowings ear-marked for the facility to staunch the large short run operating deficit; and
(4) If the user fees levied on individuals and groups using Servus Place are to make a contribution towards lowering the deficit then City Council and its administration need to make some decisions in this regard and invite input from various recreation user groups.
City Council needs to act quickly and decisively and pass a new Budget for 2008. This means the normal annual budget-making process followed by the City of St. Albert needed to be implemented at the beginning of November.
Prepared by Richard Plain (PhD Econ)
Dec. 11, 2007
