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A grim picture of the municipality’s fiscal future was on display at city hall on Wednesday but City of Edmonton officials are offering up a suite of potential solutions to the city’s money woes.
City council’s executive committee heard the city needs to take action to fix the “fiscal gap” as Edmonton is consistently spending more money than it’s bringing in because of a complicated mix of recent and long-standing problems coming to a head. Some problems are of the city’s own making because of spending or policy decisions, while others are outside the city’s control, administrative workers concluded in a new report.
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Prioritizing what services the city provides and capital projects it builds, and a new tax levy focused on aging infrastructure, are some suggestions. Adding new fees for services that are currently free, and looking at how to increase all its revenue streams are other ideas. The city would continue selling off some of its properties or other assets, find ways to draw in more commercial or industrial properties within city limits, and review all of its revenue streams. The municipality would also continue advocating to the province and federal governments for funding and negotiate on payments for services the city covers outside its jurisdiction.
Without action, Edmonton’s long-term financial position is “threatened,” a new staff report states. Eddie Robar, acting city manager, told council Edmonton’s finances are stable now but are not sustainable in the long term. The city won’t be running another deficit, and this discussion is about making improvements for the future, he said.
“There is a gap between what residents need and want us to provide, and what we are resourced to deliver. It is important to address the fiscal gap and set up for future success,” Robar said.
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“By acting in a thoughtful way, we can find ways to narrow the gap. Left unaddressed, it will result in service level erosion, a deterioration of infrastructure, an inability to advance the city’s strategic objectives and outsized tax increases.”
There’s no single cause to the city’s financial troubles.
It’s a combination of factors — lower revenues coupled with higher spending, over-reliance on property taxes, and less money or flexibility around provincial and federal funding are some. Rapid population growth, being a regional hub, downloading costs to the municipality, and limited legal tools available to raise money are also feeding into Edmonton’s financial challenges.
Mayor Amarjeet Sohi planned to put forward a motion asking for city staff to create a work plan with timelines for delivering on some of the results but council did not complete the discussion by press time.
Speaking to reporters over the lunch hour, Sohi said the city’s revenues haven’t grown and there’s been too much reliance on property taxes to pay for them.
“These pressures are not unique to Edmonton. Every major urban center is facing these fiscal pressures,” he said. “We have a high level of expectations from Edmontonians, on what kind of services they want. We have other orders of government doing less, which is putting a lot of pressure on city resources.
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“(Municipalities) are expected to do more. We need more robust funding sources, particularly transfers from the orders of government that has reduced their transfers (and) our responsibilities continue to grow but our ability to deliver on those expectations is constrained.”
Coun. Aaron Paquette wants to see the city look for other ways to make money, potentially getting a stake in start-ups the city gives grants to so, if they succeed, the municipality also benefits. As well, he’s interested in the potential for another endowment fund that could pay back dividends over time.
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