Skip to content

Economic indicators worrisome, says city report

Rising unemployment and reduced oil prices are just some of the factors that worry city officials as they plan next year’s budget, according to an economic report presented to council Monday night.

Rising unemployment and reduced oil prices are just some of the factors that worry city officials as they plan next year’s budget, according to an economic report presented to council Monday night.

The report uses economic indicators like the labour market, GDP, inflation, oil prices and the unemployment rate to help council understand how the recession will affect St. Albert and plan accordingly.

“If our report says anything there are some conditions that occur in the kind of economy that we’re in that are beneficial to us and there are some that are not,” said Bob Treidler, the city’s general manager of business and strategic services.

Council asked for the quarterly reports during last fall’s budget when the recession began.

The first report included advice from a panel of municipal experts, including former mayor and retired economics professor Richard Plain.

Monday’s report said the municipality is relatively insulated from the recession because its revenue is largely taxpayer based and demand for services remains stable.

Still, Plain believes city council can save money if it factors the current inflation rate into next year’s labour costs.

“That’s the big, big issue here is how do you get things sorted out, finally, with respect to your labour costs,” Plain said.

According to the report, labour costs account for 60 per cent of the city’s operating budget and are increased based on the annual rate of inflation.

The current Consumer Price Index, which measures inflation, rests just below zero per cent compared to four per cent in September 2008.

Plain argues council made a mistake when it agreed to carry forward 2008’s inflation rate in the 2009 budget, a mistake that cost taxpayers more money than was necessary.

He said many of this year’s municipal wage increases were not warranted by an inflationary factor, and that decision locked council into an expensive 2009 budget.

“It’s like the Titanic — get on collision course for an iceberg and then can’t change [course].”

Plain voiced similar concerns during last year’s expert panel, and said council needs to make sure administration presents cost alternatives.

“Those would be centred around different scenarios with respect to the impact of inflation on the municipal budget, with particular focus on labour,” said Plain.

Treidler said administration doesn’t present alternatives unless asked for by council, and the economic indicators are just used to help the city see what direction it’s travelling in.

Mayor Nolan Crouse said he plans to keep this year’s budget as tight as possible and avoid any additional expenditure beyond what’s already planned.

“We don’t want to see any new initiatives,” said Crouse. “Let’s finish off what we’ve committed to, let’s fund what we’ve committed to and let’s not start on anything new that we can’t afford — and that’s been the message we’ve given.”