Transit cuts, layoffs limit tax hike to 4.8%

Cutting back on low-demand Calgary Transit routes and eliminating 135 positions will help limit a property tax increase to 4.8 per cent in 2010, according to a proposed city budget.

The tax hike translates to about $4.50 per month for the average Calgary household, and is less than an originally proposed 6.1 per cent increase, the city said Thursday in releasing its proposed budget changes for 2010-11.

Some Calgary Transit routes, deemed to be "low usage," are on the chopping block for a savings of $1.2 million. The proposed budget would cut 21,500 service hours or about one per cent of the overall transit service.

To achieve a balanced budget, 135 full-time positions will be eliminated from all city departments except policing. Of that number, 31 permanent staff and 43 temporary or seasonal workers are affected. The remaining 61 positions were vacant or not created.

Noreduction will be made to the Calgary Police Service budget, allowing 67 previously announced positions to proceed at a cost of $4.5 million.

The item was not cut because city council identified public safety as a priority, said city officials.

"This is a tough budget.I've been saying for months this is going tobe very difficult for city council," saidMayor Dave Bronconnier.

"It's difficult on our staff and I believe that taxpayers' expectation [is] that they're saying to us: make sure that you ask for the least amount available."

Dip into reserve fund

City revenues are down about $20 million because of the economic downturn while increased demand for services continues, alongwith a projected growth of 27,000 more people next year.

It's illegal for cities in Alberta to run deficits, so the city withdrew $13 million from its reserve fund to compensate for losses in investments and lower natural gas earnings.

Administrators were able to save money through efficiencies, such as consolidating garbage pickup routes and reducing service vehicles. Trimming road paving will also save about $800,000.

City departments came up with about $20.5 million in cuts.

"Recognizing that a top priority for Calgarians, particularly given current economic realities, is to live in an affordable city, all departments were asked to find ways to reduce costs," Eric Sawyer, the city's chief financial officer, said in a news release.

$9.6M in possible add-ons

City councillors are scheduled to debate the adjustments on Nov. 23. They'll also need to look at $9.6 million in additional items approved since the budget was drafted, including graffiti cleanup, monthly parking passes for park-and-ride lots and operating the Race City speedway.

Funding those items will require increasing taxes, or cutting somewhere else so there's no net increase.

Ald. Ric McIver said he's pleased administrators found a way to get this year's tax increase under the six per cent, but he'd like to see it go even further.

"Any progress towards a better tax rate is good, so the job is about half done I suppose. I'd still like to see a tax rate of three per cent or lower which is probably a lot closer to what most Calgarians would consider acceptable."

Among other highlights of the budget adjustments:

• Reduction to short-term downtown parking rates; details to be announced on Friday.
• Reductions of one to 1.6 per cent to 2010 water, wastewater and drainage rates.
• No change in the business tax rate for a 17th consecutive year.