To prepare for the 2021 budget, the City of St. Albert will be hiring an independent party to conduct a fiscal and operational review of all city operations.
A review of this size is expected to cost around $1 million, said chief administrative officer Kevin Scoble. Council reallocated $160,000 remaining in the internal audit steering committee's budget and $100,000 from the budget for internal service reviews. The $700,000 remaining would come out of the city's stabilization reserve fund.
Councillors unanimously passed a motion Monday for the review.
The review is meant for the city to examine the financial and economic value of programs, services, service-delivery models and service levels to the community, while finding opportunities to cut city spending.
"No one could have ever predicted (a pandemic), but this operational review might become the huge watershed moment for this council," said Mayor Cathy Heron.
Operational reviews tend to be more 'people-driven' with the introduction of a new chief administrative officer or after an election cycle. However, this review will be COVID-19 driven, Heron said.
The city has faced mounting economic challenges as a result of the pandemic.
Revenue for the city's transit system has disappeared even though buses are still running. Recreational buildings still need heating and maintenance, but all revenue for recreational programming has completely stopped.
"There's even some potential future revenue crunches that are really hard to predict," Heron said, noting residents may have to default property tax payments come September.
At the same time, the city has been faced with a number of unexpected costs, from shutting down all of the city's playgrounds and clearing snow away from bus stops so people could board at the back, to covering overtime hours accumulated from the city's emergency operations centre.
In May, St. Albert city council heard the city’s projected 2020 deficit is now looking to be $3.9 million. Back then, city staff said they are targeting to reduce expenses overall by seven per cent across every department.
"Coming out of COVID-19 provides us with an opportunity to look at what we're doing, and how we're doing it," Heron said.
The city has done smaller reviews in the past through the city's internal audit steering committee. But an independent review of all city departments and services is long overdue, Heron said.
This will be the first time the city has had an external consultant come in and do an operational review in the 10 years Heron has been on council, she said.
The review would be done in two phases. Community services, economic development, the chief administrative officer's office, recreational and parks, transit, strategic services, IT and environment are city services included in the first phase.
Reviews for the eight city departments would need to be done by Oct. 31 so council could take them into consideration when debating the 2021 budget this fall.
Recreation and transit were prioritized for the first phase because typical operations may change as the city recovers from COVID-19, Heron said. Safety measures like installing plexiglass at desks and transitioning physical tickets online may be necessary.
"As they start up, I want the consultant to ask the question, 'Do we really need to do it this way? Or can we do it a different way? And is it more efficient to do it a different way?' So that's where the opportunity from COVID comes into play," she said.
The second phase would then take a look at planning and development, legal and legislative, utilities, financial services, engineering services, public works, emergency services, and human resources and safety. That's expected to be complete by June 30, 2021, ahead of the 2022 budget.
Council members directed the city's internal audit steering committee to select a third party to conduct the review through a competitive process. The committee would also be responsible to vet and present the party's overall findings and recommendations to council.
Scoble was tasked with bringing a proposed scope and deliverables back to council before posting a request for proposals.
The City of St. Albert will have a better sense of the public participation opportunities for the operational review after the June 15 council meeting.
Though supportive of a review, Coun. Sheena Hughes questioned whether the city would be getting its "bang for their buck" working under tight timelines.
"How are we supposed to do an in-depth review in five months?" Hughes asked Scoble. The city councillor is also a member of the internal audit steering committee.
Time is needed to put together a request for proposals and select a third-party, meaning the actual review process could realistically start up in early August, she said.
"I'm just not sure if we're going to miss the opportunity to do enough of an in-depth scope by trying to meet a timeline to try and meet the next budget," Hughes said. "If you try to make five cakes at once, you can't make any cake properly."
Scoble recognized the timeline is aggressive, but departments included in the first phase could be scaled back depending on consultant feedback.
"The overall concept is to get some identification of opportunities to get into the 2021 budget. We may have to reduce the scope a little bit for phase one once we select a consultant and discuss with them," he said.
The internal audit steering committee, which includes Heron, will meet in early July to select a consultant with the hope of bringing some short-term recommendations back to the committee in the fall.