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Council’s deliberations on mid-cycle adjustments to Action Plan 2015-2018 have concluded, after Council unanimously adopted the 2017 budget earlier in the week.  The approved adjustments to Action Plan 2015-2018 respond to direction from Council and build on the findings of work conducted through the year. Action Plan provides an overall strategy for The City to deliver results and respond to citizens’ needs and priorities through the 2017 and 2018 business plans and budgets.

Next Steps:

  • Administration will report back to Council no later than January 2017 on a proposed plan for implementation to help Calgary businesses affected by the downturn.
  • The 2017 property tax rate will be finalized by City Council after the Government of Alberta approves its budget and 2017 provincial property tax requisition in the Spring.

What is Next:

  • The approved adjustments include $198.6 million in total benefits that citizens and businesses will receive in four broad areas: significant tax relief, fee relief in a number of areas, investments in selected initiatives targeted at areas of greatest need, and a Capital Investment Plan.
  • The approved mid-cycle adjustments continue The City’s response to the change in the local economy and build on the direction given by Council earlier this year. The mid-cycle adjustments continue the economic response initiated in 2015, and expand on the strategy with additional changes intended to benefit all Calgarians while targeting support to those most severely affected.
  • Administration has undertaken extensive research, consultation and citizen engagement to better understand how the current economic climate has impacted the wider community and the organization. The results show a shift in citizen priorities that have emerged as a result of the economic downturn.
  • In response to the changes in Calgary’s economy and the impact on citizens and local businesses, Council has taken action to provide tax and fee relief to help Calgarians and the community at large.
  • The consultation and analysis conducted through the Mid-Cycle Adjustment process led to Council’s decision to reduce the original 2017 property tax increase to 1.5%, with a one-time property tax rebate for 2017 to effectively bring the property tax rate increase to zero. In addition, Council decided to:
  • fund the reduction in the tax rate through a combination of further efficiency gains, service reductions and corporate funding;
  • maintain transit and some other user fees at previously approved 2016 levels; and
  • request Administration to identify specific, targeted projects and initiatives to help those most in need as a result of the shift in the economy.

Go to The Calgary City Newsroom to read more on the highlights of Council decisions.

Questions & Answers:

1.What has The City been doing to respond to changes in the local economy?

The City has been responding to the change in the economy since early 2015 and has taken action on a number of fronts.  These include initiatives such as the Economic Resilience Strategy, the Economic Resilience Fund, and the adoption of a sliding scale for transit fares.  In late 2015, the 2016 tax rate was reduced to 3.5% from the previously approved rate of 4.7% – made possible by finding efficiencies and reducing the operating budget by $18 million. In addition, The City is continuing to invest in capital infrastructure and leverage other funding sources, and is managing its labour force through vacancy management and attrition.

2.What work has been undertaken to understand how the economic climate has impacted community needs and the needs of the organization?

Throughout the year and through the mid-cycle adjustments process, there has been extensive engagement, research and communication with both internal and external stakeholders to better understand the impacts, concerns and priorities in this economic climate, and focus areas for adjustments, including:

  • The public was engaged through a variety of online and in-person methods, including online surveys and engage bus events starting in February 2016.
  • A series of workshops were conducted with approximately 100 representatives from community organizations, businesses and City of Calgary departments to better understand the impact of the economy and the economic scenarios on the community.
  • Research on the social impacts of economic downturns was compiled by the University of Calgary, and used to inform targeted initiatives focused on those hit particularly hard by the downturn.
  • Workshops with City subject matter experts were conducted in June to generate low-cost and no-cost ideas to address emerging needs.
  • Citizen Satisfaction research and telephone surveys were undertaken to gain better insight into Calgarians’ point of view on the economy, on quality of life, and City investments.

3.How have citizen priorities changed?

Based on this and other research conducted since November 2015, citizen concerns about the state of the local economy have risen in priority from lowest in 2014 to highest in 2016.  In addition to taxes, other issues that are top of mind for Calgarians include a continued focus on spending and efficiency, quality of life in communities, getting around the city (both transit and roadways), providing safe communities and access to services for all Calgarians, affordable housing, and ensuring we are good stewards of our natural environment and resources.

4.What is the tax relief and how will it be funded?

In June 2016, Council approved a tax rate increase of 1.5% for 2017 that will be funded through a one-time rebate to all property owners from the Fiscal Stability Reserve (FSR), effectively eliminating the increase.  The property tax rate reduction and property tax rebate are being achieved through a combination of corporate funding sources, department savings from efficiencies and service reductions, totaling $73 million.

5.What fee relief was approved to help out Calgarians?

Homeowners, transit riders, recreation users, parks users, and business owners will benefit from approximately $66.2 million in fee relief for:

  • Transit fares
  • Recreation, parks, and pet service fees
  • Planning, development and fire code inspections and permits
  • Landfill tipping fees
  • Utility rates
  • Green Cart program fees in 2017
  • The low income transit pass will continue to be provided at the current rate for the first quarter of 2017. After that, a sliding scale fare schedule for Transit’s Low Income Monthly Pass will be implemented based on income.

6.How much was approved for targeted initiatives to address emerging needs?

Those who have been particularly hard hit by the economic downturn will benefit from $9.1 million in increased funding to support community and social programs, community events, affordable housing, and initiatives to support new and existing businesses.

7.What is the Capital Investment Plan?

The City’s Capital Investment Plan will help spur economic growth and diversification, maximize investment to create jobs, build and maintain infrastructure, and attract and retain people, business and investment to Calgary. The Capital Investment Plan will be funded through existing capital sources and better position The City of Calgary to take advantage of federal and provincial grant funding programs. Administration will return to Council with recommendations for new, or currently unfunded, capital projects no later than Q2 of 2017.

8.What impact will reducing the 2017 municipal tax rate increase to zero have on property owners?

The City’s tax rate is only one aspect of the property tax bill so effectively freezing the municipal tax rate increase does not mean that property owners will receive a property tax bill that is the same as last year. Property taxes are made up of two parts – the municipal portion that supports City operations and services and the provincial portion set by the Alberta Government. The City has no control over the provincial tax rate, which is set in the spring.

In addition, changes to assessed property values also affect the amount of the property tax bill. The assessment process is the basis for how property taxes are distributed among all property owners to meet The City’s budget needs. The assessed value of your property reflects your share of the property tax, relative to all properties in Calgary.

9.What impact has the economic downturn had on The City’s revenues?

The approved adjustments offset the impact of a $35.3 million drop in some City revenues, without affecting the tax rate.

10.What did Council approve to help struggling businesses?

City Council also set aside $15 million from the Fiscal Stability Reserve to assist Calgary businesses facing challenges due to the economic downturn. Administration will report back no later than 2017 January, with options for Council to consider around utilizing the funds.

11.Why did the total benefits change from $183.3 million in the proposed adjustments to $198.6 million in the approved adjustments?

The total benefits identified in the proposed adjustments did not include the $15 million to assist businesses nor did it include $300 thousand to maintain the low income transit pass at the current rate for the first quarter of 2017.

 

Sean Chu

Sean Chu

Sean Chu arrived in Calgary from Taiwan in 1985 speaking not a word of English, and within 7 years he was a sworn officer with the Calgary Police Service. From that point on Sean worked with the Calgary Police Service as on Officer for 21 years in a number of roles until 2013.

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