St. Albert city council has received the second phase of its $1-million fiscal and operational review ordered in 2020 from consultant Ernst & Young.
The complete review, split into two phases, was tasked with identifying long-term, sustainable management solutions to budget challenges, and measures to provide quality, affordable municipal programs and services without relying too much on taxpayers.
In total, the consultant company presented the city with 40 business cases after looking at all city departments, which could save the city $22.9 million over five years if all opportunities are implemented.
"These opportunities spanned both financial benefits and transformation pieces as the city continues to grow and evolve its service offering and demands of residents," explained Alan Thom, associate partner with Ernst & Young. Overall, he said the city would have to make a 10-per-cent investment, or $2.6 million, to realize that $22.9 million in cumulative benefits. It's now up to the city to decide how many suggestions the municipality wants to run with.
Over 80 per cent of the financial impacts identified through the business cases come from how the city delivers programs and services, according to the report. Twenty-three of the cases presented could be done within the next six to 18 months, saving the city about $20 million over five years. Within the next six months, the city could save $2.5 million over five years if they implemented nine business cases, according to the report.
Top five
Five of the business cases would have the biggest financial impact on the city overall.
Up top is for the city to explore partnerships for recreational facilities within the next six months, which could save $1.84 million over five years. Recreation facilities and programs are generally subsidized significantly by taxes as revenues aren't usually enough to cover operation costs.
The second priority identified is also around recreation, with the report suggesting the city explore opportunities to partner with neighbouring municipalities on recreation projects over the next year. Partnership models could save the city $1.5 million.
Transforming the city's procurement model would realize about $4.56 million in savings over five years, with estimates that this would take between six to 18 months to do. The city has made some initial progress in this area by consolidating janitorial contracts, according to consultants, so this business case explores the possibility of expanding that to reduce procurement spending through strategies like bundling contracts to get volume discounts.
A review of library grant funding comes in fourth place on the consultant's list, with cost-saving opportunities estimated to save $7.3 million over five years. The City of St. Albert provides 80 per cent more funding to the library than other municipalities, according to Ernst & Young. Exploring shared services with the city, eliminating any duplicative services and reducing grant funding are all potential options.
Changing how the city runs the Arden Theatre could also save the city $1.27 million. Exploring partnerships with non-profit or other organization to manage the theatre could offset costs to the city, while the city could provide an annual grant to the entity to manage a portion of costs.
Mayor Cathy Heron thanked Ernst & Young for its report, and said it was a good overview.
"The recommendation is actually to make this a huge part of the 2022 council strategic planning with the brand new council," Heron said. "I'm super pleased and I think this is an opportunity for not just the city and council, but even the community to celebrate what we've got in front of us."
Council also passed a motion from Coun. Wes Brodhead for administration to bring back an implementation plan that "outlines opportunities that they are pursuing immediately and the anticipated savings, cost avoidance, new revenue associated with these opportunities, further identify any opportunities that could be actioned now but require council approval."
That will come back to council on June 21. Council also went in-camera for about an hour before the report was presented publicly to discuss potential opportunities.
