St. Albert’s repeated overspending on capital assets has finally caught up to the city.
City council's governance, priorities and finance committee opted Monday to recommend a base annual property tax increase of 1.5 per cent for the next three years in order to make a dent in a $16-million shortfall for the repair, maintenance and replacement of St. Albert's capital assets.
Council learned back in March years of underfunding its repair, maintenance and replacement (RMR) reserves must end. Contributions to the reserves have not kept pace with the growth in the city and continuing to rely on federal and provincial grants to pay basic RMR costs is too risky for city administration’s liking. Removing grants would leave the city short by about $16 million and closing that gap would require 20 years of 1.5 per cent increases.
The committee’s recommendation marks a compromise, with the hope that three years from now other solutions will be available. While the increase still has to be formally approved by council, the committee’s 6-1 vote gives a pretty good indication of where the final vote will land.
For eight years, St. Albert’s capital spending additions have outpaced assessment growth (the city's main source of revenue) by more than 50 per cent. Despite that, Mayor Cathy Heron says she doesn’t think council has been on a huge spending spree: “Besides the basics, we haven’t done a lot of growth, not substantial, not big,” she said.
The current fiscal situation shows budgets aren’t broken by spending sprees alone. Sustained overspending adds up and ironically we have less to show for it than if we had been funding big projects.
Cities across Alberta are facing down similar infrastructure gaps. Camrose, Lethbridge, Chestermere, Leduc and Red Deer all told staff they have similar issues. Red Deer and Strathcona County have both opted to increase taxes as a solution.
But regardless of how widespread the problem is, it should be embarrassing to our municipal leaders that St. Albert is in such financial straits. Government coffers often seem like a black hole for funding. There is never enough money to go around and municipalities constantly find themselves asking for more – usually from residents. That might be more palatable when residents are getting value for their money, but that's not the case with these particular increases.
Unfortunately, it appears the majority of council is unwilling to do the harder work of cutting spending, reducing services where possible and perhaps delaying some projects. We understand cost-cutting on its own won’t solve the capital funding shortfall, but asking taxpayers to do all the heavy lifting isn’t the answer either.
Council needs to show by its actions that it can be a good steward of our tax dollars. Prove that to us first and you might just find that taxpayers are willing to pay a little more.