November 15, 2022

Community Chat with Keren on the 2023-2026 City Budget.

Transcription of Facebook Live event
This transcription has been edited for brevity and clarity.

Hello, name is Keren Tang, I'm the City Councilor for Ward Karhiio. If you are joining me this evening, thank you very much for taking time out to connect with me on this platform. Today's live is a little bit unique because usually we have a guest and it’s more conversational, but given the budget deliberation period that we're in right now, I'm going to go ahead and focus on one very particular topic, which is the budget. And that's going to be what I'm talking about tonight. But before we get in there, I want to acknowledge that we are on Treaty Six territory and I'm very proud to be representing southeast Edmonton, in Ward Karhiio.

First, I'm going to take some time to walk us through the budget itself. It's a four year budget. It's one of the biggest things that City Council is responsible for and I just want to share some highlights, things that I’ve been learning, and then share some of my thoughts in tackling this budget. I'm gonna stop periodically to see if there are any questions. And then towards the end I'll open up to any questions you might have, whether it's related to the budget or any issues that you want to flag for me.

Okay, so what is the City budget? The City of Edmonton has a policy that we look at our budget every four years. That policy went into effect a number of years ago. And so we've been on this four year cycle and there's a lot of benefits to long term budget planning because it helps us kind of see into the future and we're not always scrambling year after year. But what this means is right now, in the next six weeks, we're gonna be determining the mill rate or the tax rate for the next four years. So this tells Edmontonians: how are we getting our money? Where does the City's revenue come from? How are your tax dollars being used? And how does our budget help us achieve our long term goals?

According to research, some of our economic outlook data, in 2019, average monthly spending for a typical, working family, two-income, owner-occupied household, was around $9,000. This also includes your income tax. So you'll see that among all the things that that people have to think about, that they’re spending on, you have federal tax tax at 22%, provincial tax at 9.6%, City property taxes at 2.4% and the waste utility fee is 0.3%. And then the rest of money really goes into your housing, your transportation, clothing, recreation and entertainment. When I learned this, I was a little bit surprised that although the City property tax of 2.4% is actually quite small in the grand scheme of things, it provides important services that we access and we interface with on a daily basis. So I wanted to set the context for this conversation from this as a starting point.

Unlike a typical budget, city governments have a pretty big responsibility. We have to balance our budget, because unlike other levels of government, we cannot run a deficit on our operating. Operating are the things that help our rec centres work. They are the city staff that do the snow removal or the lawn mowing. We cannot run a deficit on that. So we have to balance our budget. With this four year budget cycle, 2023-2026, we actually have four different budgets that we are looking at. They're hefty documents, and they're not a light read.

We generally start with the capital budget. The capital budget talks about our infrastructure needs, or some of our technology needs.

We also have an even heftier document for our operating budget. The operating budget is things that you see right now, you know, with snow removal, that's all under operating. These are our big two big ones. But in addition to that, we also have a couple others. We have our utility budget. The utility budget is what sets our utility rates, specifically waste. As part of this, we also talk about Blatchford. And then finally we have a lighter one, this is our carbon budget. The carbon budget is a new tool that the City is trying out this year. And it essentially says, what is our carbon and greenhouse gas emission footprint that comes from all these other spendings? And we do have targets and are we meeting those targets? I'm going to get to that in a little bit.

So to build all these binders that I have (you know these days, I'm just surrounded by these documents), there's a lot of different building blocks and in fact a lot of the reports to talk about each of these building blocks and what are the tools that are helping City Council review all the spendings and try to make the best decision. So some of these include our vision, and the general City direction as guided by the City Plan. The Carbon Budget is also a tool. We've also been leveraging Priority Based Budgeting, which is a tool I was highly interested in, and talked about it during the election. I think it’s very important in helping us determine priorities and letting our dollars be guided by those priorities. So those are the various building blocks. And you know, this is not a one-day exercise, it's six weeks and we're in the heat of it right now. So those are all the different factors that go into building a budget.

Where Does Revenue Come From?

When we talk about the budget, it's not just property taxes. Property taxes make up around 58% of our total budget. The City of Edmonton, as the fifth largest city, is running on a budget of $3.2 billion and that's our operating. You will see that property taxes specifically are 58% of our revenue%. And then the rest of it comes from dividends from EPCOR, grants from other levels of government, franchise fees, user fees (your bus fare, for example). So all those are also income that contribute towards this $3.2 billion total. So this speaks to where we get our income from.

So where does that $3.2 billion go?

How are we spending that? There's a lot of services that we are getting for every $100 of your taxes. 15% goes towards police, which is the biggest chunk of our operating budget. Some goes towards transit, some has to pay down our debt for building large infrastructure projects, for our roads, our snow, our fire rescue services, our recreation, our planning and development services. For the social and community building activities happening in our neighbourhoods.

Top 10 Things You Need to Know About the City Budget

One thing that I have found to be quite helpful is this summary called Top 10 Things You Need to Know about the City Budget. It breaks down, thousands of pages of budget documents and tries to explain it in a way that we can relate.

The Budget Process

Given the size and scope of something like the City budget, it's not a one-day process, and you'll see that we have several stages. So first, the capital budget is released on October 20. Each of these budget binders that I have here, they're released in a staggered manner to kind of manage the flow of information and also manage the process of putting together these very hefty documents. If you think about it, the city has over 10,000 employees, we run 73 lines of business. Try to kind of get a full picture of all that going on, not to mention the various external partner organzations, agencies, boards, and commissions like the police commission that oversees the police budget, it's not in one day we can just get all the information. So starting in October, we have a presentation to City Council on October 31. That was just focused on the capital budget, and then we have our operating budget and a carbon budget, both of which were released on the same day, November 3, and then presented to City Council on November 14. And the last piece is the utility budget, and that was released on November 10, and it will be presented to City Council at Utilities Committee on November 25.

Our team has been reading different budgets as they have been released. We also have the opportunity to ask questions, both during those City Council meetings when the reports are presented, and also through an online portal where we can enter more questions that really dig into the weeds, by writing. The first one is questions responding to the capital budget. Then we have a whole other binder, that is just the answers to questions from all the councillors, that is also published online. And then today and tomorrow is the deadline to submit our questions for utility budgets. So we have done that and that should be published sometime in the next week or so. And the final one, the really big one, is the operating budget and these are more of questions that dig into the minutiae of things.

So, we are asking lots of questions. We've gotten a record number of questions for the capital budget already. And City staff have been working around the clock to pull together the responses for that. asking questions is actually an important tool as governors, as City Councillors, that we have because it helps us understand things a little bit better, and to make the most informed decisions, and helps us think about trade offs. I've been talking about trade offs a lot. And that's really what this budget is gonna come down to. So, after we have the information in writing, we've submitted all of our questions, we have two days of non-statutory public hearings. You can register. So this is open to anyone, any member of the public, if you have a thought whether on a very specific item with a budget within the budget, you can register to speak. The registration opens starting on November 17. And the public hearing itself will be November 28 and 29th.

How the Public Hearings Work, and How You Can Participate

Question from the Audience: Can you also talk about how public hearing works? I think many people are not familiar with it back in 2018. It was difficult and you had to basically wait around from 1pm to 8:45pm for your turn to speak.

One of the things that came out of the pandemic is the ability to attend to things virtually and we've really kept a lot of that. So when you first register there is a Google form. I've been actually wanting to do this for a while,to kind of walk through what is the process of registering to speak. Once you sign up to speak, they're going to ask you what exactly you want to speak to. And you can select the date. Basically the whole day is slated for speakers. The order is a bit of a first-come-first-serve basis. We don't really know what the order is. Even for City Councillors. We don't know who's signing up. We don't know how many people signed up and we don't know how, what order they're signed up in until basically the day of. You can either come into the Council Chamber, which is open to the public, you can come there in person and yes, you might have to wait all day for your turn. But you can also kind of get a sense of where you are [in the line-up] and then can leave or come back. Or you can participate remotely.

You can also be speaking from your house and that's kind of the beauty of virtual participation now. When you register to speak, you can come in person or you can join online, you can come in, sign up to come in person and change your mind and then stay home and join from your cell phone or your computer. Either works. If we call your name and we're not there. You know, by the time your turn comes, there's a lot of effort to try to get a hold of speakers to make sure that they really have the opportunity to to speak.

Everyone has five minutes to speak, so prepare your five minutes well. When we think about advocacy, I think it's important to get to the point quickly, and back it up with evidence, with stories. Your personal stories are always extremely powerful. So five minutes, after which, people in your panel or your group and cohorts of usually around 10 to 18 people, Council members might ask you questions. So we ask that you stick around and respond to questions but if you have to leave, that's also totally understandable. We hear from lots of different people, from members of the public, from Edmontonians, but also from the community organisations we support. Budget deliberation starts December 1, and it goes all the way until December 16. And this is when Council members might start to put together amendments and actions that might change the budget and the final number, or the things that we'd like to see advanced or things that we might want to take out. And that's what happens during the deliberation. If by chance we get to December 16 and we don't have a budget then that's what we're doing over our Christmas break or holiday break because this is our fundamental responsibility. We need to deliver a budget and if you can’t do it by December 16, we have to figure it out by January 1. So that's kind of the process in a nutshell.

How to Register to Speak

Some Tips on Making the Most of your 5 minutes to Speak

How I’m Approaching the Budget: Community, Economy, Climate

The final piece I want to touch on is, how exactly am I as your ward Councillor approaching this budget. When I was elected, this was my platform: community, economy, climate. This was the platform that I was elected on in Ward Karhiio. (You can view my platform on my website). These are the three main pillars that the platform was focused on. And below that there are about 35 actions. These are the things that were important to me, to my values, but also the things I've heard from many of the residents in the ward when I was campaigning. One year later, they remain highly relevant and still very important. And in the last year I think we have made some really good progress.

So when I go into this four-year budget, where possible, I'm finding places of alignment between the budget and this platform and seeing where we can leverage funding to make the ward and our city a better place. However, it's an incredibly challenging budget cycle. And the budget before us has many contributing inputs. There's a lot of things that goes into it. And it builds upon decisions made over the past few years and few budget cycles, including decisions made by previous Council. Oftentimes those decisions carry on for many years. And they don't really get realised until maybe now. So this budget is not necessarily in my opinion, a reflection of the priorities of the current Council. We're actually catching up on old priorities. Mind you, we have seen years of chronic underinvestment in our public infrastructure. We have seen, you know, the impact of 0% tax increase when the city is still growing. We are still recovering from a global pandemic. And that's all the things that we're wrestling with this time around. While where we are today is because of the decisions from previous councils, we are here now, and our job now is to be accountable for it.

It’s challenging and it’s complex. And this four-year budget is absolutely one of the biggest items we're going to be accountable for, as a Council.

So in these four years coming up, there are so many unforeseen circumstances and things that are outside of the City's control. Of course, it's COVID-19, but we're also anticipating an economic recession and that, I know, has so many people worried, including this current Council. And so we are course correcting from major unforeseen events like COVID-19, and trying to catch up from years of underinvestment, so that we can at least be at a place of stability and then we can move to the next level of transformation.

I have three principles going into this budget:

So the first principle is, investing long term and with a longer term horizon. You know, recognizing how we're still economically recovering from a pandemic. And while there will likely be property tax increases this year, after years of tax increases below inflation, I also recognise that not everything has to be done in this budget, this year. Just because we are going to be facing some really challenging times in the next few years. So where we can, I'd like to see us start to plant the seeds and still kind of work towards those Council priorities. But certainly, I don't think we need to rush and try to accomplish everything. Spreading out costs throughout the current budget and potentially for future budgets for growth projects is one way we can limit the tax increase so that it doesn't have to be so onerous and overburdening. And it also allows us to invest in transformational projects for our city. Some examples of how we're doing this in terms of spreading things out: for example, in the limiting increases in user fees so that transit fares will remain steady for two years along with user fees for recreation. Planting seeds, you know. When we talk about the carbon budget. The carbon budget, if you read it, is actually incredibly depressing, that we are falling far short of our targets. I'm not gonna get into it today, but I think the picture is actually quite bleak. And so much of the things that we need for climate adaptation and energy transition are currently unfunded. And even if we fund everything that we can, we focus on what the City can control and that's only 2% of sort of the entire community, greenhouse gas emissions. And so there's just so much work to do. I know that when it comes to carbon budgets, we just know that as a collective responsibility, everyone plays a role, but as a City we can start to invest in some planting seeds now.
My second principle is something in, for something out. What I am very conscious of is Edmontonians’ tolerance for tax increases. We know people are still struggling at a household level, particularly with food and energy prices increasing due to inflation. We learned from our city economist the other day that the people who are most impacted are always going to be those folks without discretionary spending, and it is the bottom 40% of the income level. So when I look at a budget, including things that are currently funded, and projects are unfunded, if I want to see something added because I think it's really important for the city or I think this aligns with my platform or values, I need to identify something that needs to come out. Either temporarily or for good. So that is a lens that I am looking [through] because I think that's one way to limit our property tax increase and keep it as close to the 3.9% as possible. And for this budget, I do want to emphasize that with inflation, rising costs for construction and more. It's actually not feasible for us to have another year of 0% tax increase. A lot of you have written in to me about the concerns over yet another year of tax increase. You might recall that in 2020, the property tax increase was zero. And last year was 1.9. As we grapple with a pandemic, that is not possible and it's not a sustainable path forward, unless we want to stop, if we want to stop migration into the city, if we want to stop development, you know, all these things are also jobs that people can have. But if we want to stop growing, if we want to just do nothing, perhaps but even then, 3.9% is to maintain current service, and I am actually quite concerned about what will happen you know, if that is kind of where we end up going. So, if we maintain that course of action of 0%, given that we'll property tax for the past couple years has been below inflation, I think it will have a really negative impact not just for the next four years, but for the next few decades. So to maintain our current service level, we are looking at that tax increase of 3.9% on average for the next four years. And this is a base that we are starting.
And the third principle is I do want to be responsive to the concerns and needs in my ward. For the past year we've gotten thousands of emails and phone calls. A lot of feedback on our core services, what has been working well, what hasn't been working so well, and that requires more investment. Some of these core services keep our city running, but have fallen short over the last few years. The three areas that I receive the most number of feedback on from ward residents are:
- The number one is snow and ice. I know there has been a tonne of feedback last year and hopefully we're doing a more improved job and I know there's always room for improvement. But that also is reflected in the budget. There is funding that is going to be debated about how to improve our snow and ice service delivery.
- Number two is transit. And people's lives have just been in total upheaval because of transit and then there's been so many, not only with the redesign, but there have been several service adjustments. We have our LRT that is still not opening. And so transit is a really big topic and I am looking at this budget as well for those opportunities to enhance service, including on-demand transit and bus rapid transit. And regional transit.
- And the third issue that I hear a ton about is safe crossings and road safety, speeding and intersections. These are things that we can ensure our streets are safer for all. For some of these three areas, some of these are funded, some of them are not, especially for enhancing the service level, they're not funded. On demand transit, for example, is currently an unfunded service package. And for the past two years, people have been depending on that for livelihood. And it boggles my mind that they're unfunded. But this is the reality of this very tough budget deliberation. And so those are kind of three areas that I will certainly be looking at.

Where possible, I will also be keeping a close eye on some of the bigger capital projects. So infrastructure projects that are happening in the ward, things like Neighbourhood Renewal. The engagement already started, in Meyokumin and Hillview. You know, there's going to be some infrastructure upgrades with the Mill Woods rec centre, for example, very much needed. And south of the Henday, one of the biggest projects is actually the Walker Integrated Fire Station. Currently what's funded is just the fire station portion, only in this budget. I know that there has been a very controversial housing piece to this as well. It's currently not recommended as funded. But that doesn't mean it's gone forever. Engagement will still happen. But it's just saying right now, there is there is no money to fund the building of that.

And finally, I will just say, some of the other lenses I will be using are:

considering the public health impact of a project or service. How does it work towards healthy communities?
And number two, the climate and carbon impact of a project.
And number three how projects and services can support building equity.

Resources to Help with Property Tax

I know there's a lot of worries and concerns out there. If you are facing challenges with your property taxes. If you're a senior on fixed income, you know I think about you often, and I’ve been raising some of these questions in the past year but also as I'm reading through the documents. There is a seniors property tax deferral programme. So you can take advantage of this financial assistance offered through this program, offered by the Government of Alberta. Typically this information will be sent out with the assessment. It's for eligible senior homeowners to defer all, or part of, your property taxes through a low interest home equity loan with the Alberta government. And if you qualify, the government will pay the residential property taxes directly to the municipality on their behalf. And so you repay the loan with interest when you move or sell the home. Another other option is a monthly payment plan for property taxes. Just because it might be really difficult to pay everything in one go and the City does offer that monthly payment plan. And we'll be sharing that link as well. There are other resources online to help you better understand your property tax. Our taxation team is always happy to talk to people and answer their questions.

In Conclusion

If you are apprehensive about this budget, so am I. It is gonna be tough. I'm gonna say that probably over and over again. It's what's keeping me up at night. It is extremely stressful. I do feel worn out. But I also think it's very, just a very, very important role that we're in. It's an honour to be in this role to think about the future of our city and I still you know, I think we should be proud that we are what remains one of the most affordable cities in the country. We still have a very much a vibrant arts and cultural scene. We have a growing population, we have a very young population. And I think this budget will help us reach our city's goals. Continue to grow and build our shared vision and make our city, our neighbourhoods, a better place to live, work and play.

This is not an easy budget. It's not an easy topic. I've sought out feedback about what's important to you this budget cycle. Quite frankly, I know that if somebody asked me that question, as an average Edmontonians I wouldn't even know where to start. And hopefully this gives you a bit of context to what we're working on, and what is being debated all the time in City Hall.

Please do get in touch we'd love to hear from you. I am always open to feedback and constructive criticism so you can email us at keren.tang@edmonton.ca or 780-496-8142. If you haven't signed up for the newsletter, I encourage you to to sign up for the newsletter at kerentang.ca/contact.

Thanks so much. Take care everyone. Stay safe, stay healthy and I look forward to seeing you soon. Thank you!

Budget Resources

Budget Overview + All Budget Documents: edmonton.ca/budget

Top 10 things you need to know about the City Budget

You can register to speak here: https://www.edmonton.ca/meetings. Scroll down to the button titled "Request to Speak". Or get there via edmonton.ca/budget.

Public Hearing Playbook for Land Use Public Hearings, with some good tips on how 'panels' work. https://www.edmonton.ca/.../Land-Use...

Property Tax Resources

Understanding your property taxes: https://www.edmonton.ca/residential.../property-taxes

Seniors Property Tax Deferral Program: https://www.edmonton.ca/.../tax-assistance-for-seniors

Monthly Payment Plan for Property Taxes: https://www.edmonton.ca/.../property.../monthly-payment-plan

Navigating the 2023-2026 Budget