City manager Jeff Fielding said the oil price collapse turned the city’s financial picture on its head since he was hired just a few years ago.
“Not less than a year-and-a-half later, we were in the midst of a downturn that we haven’t seen for decades. So, we’ve had to change our focus as an organization and as you understand it’s a big organization, it’s a big ship, and turning that ship around is difficult.”
Since 2015, officials have found $325-million in efficiencies and reductions at city hall. The city manager said Calgary was increasing costs at a rate of 4.5 to six per cent to deal with exploding population growth, but that approach is changing.
“You don’t have that growth now. And so, we need to stop the train and back up,” Fielding said. “So, what we’re really doing is slowing the increase in our spending and so at some point in time we need to level-set that to a new level and it’s probably going to be closer to zero than it will be to four.”
Fielding said the mantra from city administration is now, “if you don’t need to spend the money, don’t.”
“We’re very clear about that. If we can buy less pencils, we’ll buy less pencils. If there’s less guard rails that we need to buy, let’s make sure we’re buying less guard rails. If we don’t have to hire a new person in the complement, don’t hire a new person.”
The city has not implemented a hiring freeze as such, but all requests for new hires face stringent review.
“We have a process in place that every position that comes up that needs to be added to the organization needs to be thoroughly reviewed,” he said. “We have a committee that’s in place; a business case needs to be made, so we’re going through a very thorough process as well as we’re going line-by-line over the cost that we manage.”
The city still faces revenue challenges. There’s a $17-million shortfall at Calgary Transit due to deeply subsidized passes for low income Calgarians and revenues from utilities will be down $41 million after council lowered the proposed increases to water and sewer rates.
On the expenses side, the city is hoping to find common ground in upcoming negotiations with unionized workers.
“At the end of the day, we have a supportive workplace,” Fielding said. “We’re not threatening with layoffs. We think there are some solutions there that are going to bring our costs in line with what we can afford.”
He notes that management-exempt employees, understanding the plight, have made some concessions that will save the city $35-million.
By next year, the new council will get a list of 500 city services and be asked to come up with what they feel is a core service and what can be cut if they want to be on a cost recovery scheme. The city manager said service cuts could be a possibility as the process continues.
“I think there’s enough room to get to a certain point. That’s what we’re trying to figure out right now. How low the indicative rates get set will be the real tough decisions. If they get set low, there’s going to be more implications.”
More than a third of the money so far saved by the city, $131-million, has gone to tax relief.
with files from Aurelio Perri News Talk 770