Tapping Calgary’s reserve funds to pay for one-time projects was one of the themes present during city council’s budget deliberations on Thursday.
Council approved some notable investments during their fourth consecutive day of budget talks, however, none of the items receiving money will raise property taxes.
Instead, the capital is coming from the city’s various reserve funds.
Reserves will be used to pay for items such as a cost overrun on a new firearms training range for the Calgary Police Service (CPS), paving more roads and doing repairs to several recreation facilities.
None of those items were funded in the original budget adjustments presented by city administration.
Next year will already see a $36-million increase for pavement maintenance, but on Thursday, council voted unanimously to take an additional $20 million from Calgary’s Future Capital reserve to put toward improvement the pavement quality.
“This just makes sense,” said Ward 14 Coun. Peter Demong who put the motion forward to use that money,
“The sooner we can start repairing the roads, the cheaper it will be in the long run. It’s just the way roads work. So let’s vote this in, let’s get it done and let’s just fix the damn roads.”
City council also approved using reserves to pay for a $10-million cost overrun on a new CPS firearms training range.
In September, CBC News reported that the Calgary Police Commission (CPC) proposed CPS use unallocated money from the Community Safety Investment Framework (CSIF) to cover the cost overruns of a new firearms range for the Calgary Police Service.
Costs associated with the new gun range ballooned to a total of $23 million or 130 per cent higher than the project’s original $10-million estimate.
The CSIF money is used to fund community partner agencies that provide help for people with mental health or addictions issues, rather than relying on the police.
CPS puts $8 million annually into the fund and that amount is matched by the City of Calgary.
Originally, the plan was to take $5 million in 2024 funds, $4 million in 2025 and $4 million in 2026 from CSIF to pay for the gun range.
The CPC said it was needed because the current firearms range was built 20 years ago and is beyond its lifecycle.
However, following a presentation from CPS Chief Mark Neufeld on Tuesday, the CPC was able to reduce their original $13-million CSIF-funded ask to between $9.5 million and $10.5 million.
Neufeld told council that $2.5 million from the police’s red light camera reserve would be reallocated to pay for some of the training range, plus another $1 million from the police’s 2024 anticipated budget surplus.
Instead, council voted 10-5 to take funds from the city’s Fiscal Stability Reserve (FSR) in order to allow CPS to continue contracting agencies to support helping with mental health and addictions issues rather than relying on a police response.
Mayor hopes to ‘stay true’ to budget, 3.6% tax hike
Mayor Jyoti Gondek says the important part of Thursday’s various reserve capital-related decisions is that not only will the work be done, but it will also not affect property taxes.
“We had a couple of options this year — we could either increase taxes by increasing the budget for things that are needed, like pavement quality, infrastructure, recreation facilities — but we knew we couldn’t do that this year,” she told reporters on Thursday afternoon.
Gondek says this year, council needs to “stay true” to the 3.6 per cent property tax increase, citing affordability challenges for Calgarians.
“There’s no way we could increase the base budget this year,” she said.
Ward 3 Coun. Jasmine Mian also brought forth an amendment to next year’s budget on Thursday that would allocate $7.5 million in 2025 and $7.5 million in 2026 in one-time funding for capital upgrades on recreational facilities, like the Village Square Leisure Centre.
Mian asked that the proposed funding also be taken from the FSR and the motion was approved in a unanimous decision from council.
“We know that Calgarians care a lot about recreation assets, as we heard with Inglewood pool,” Mian told reporters following the vote.
“I’m really happy that council has approved that amendment. I’ll see if the whole budget passes, but it’s going to go directly into some of our most important infrastructure, like Village Square that gets half a million visitors a year.”
Budget talks to continue on Friday
What’s more, several of over a dozen new amendments announced by five councillors earlier this week were defeated, including proposals such as amalgamating two senior city administrator positions, eliminating the proposed one per cent tax shift from business to residential properties and cancelling the city’s procurement of electric buses.
The list of proposals — from councillors Sonya Sharp, Dan McLean, Jennifer Wyness, Andre Chabot and Terry Wong — intended to roll back the 3.6 per cent property tax hike.
If approved, it would mean that owners of a median-priced home worth $700,000 would have to pay about $8 more per month in municipal property tax.
Ward. 1’s Sharp, one of the five council members responsible for proposing the amendments, told reporters she’s concerned about the use of capital from reserves.
“You better believe I am [worried] … I’ll tell you why I’m worried. The more we’re using this money as FSR, the less we’re going to have for the next council,” she said.
“Guess what happens when reserves run dry? You have to increase taxes…. That’s poor governance. And our job as governors is to make sure the public purse has, I would say, ‘the rainy day fund.’ We’re draining it really fast.”
Sharp added that while Calgary’s reserves are healthy, she’s still concerned about spending.
Budget talks are set to enter a fifth day on Friday as council has been tasked with reviewing and voting on more than 30 proposed amendments for next year’s civic budget.
