Davison: Calgary needs critical budget cuts and smart project spending – Calgary Herald

Calgary city hall needs operational budget cuts and strategic spending, says Coun. Jeff Davison.Postmedia

Next week, city council will be adjusting the City of Calgarys operating and capital budgets.

These adjustments come at a critical time. Calgary leads Canada with the highest unemployment rate of a major city. The downtown vacancy rate remains high, and the collapse of office tower valuation has led to businesses outside the core picking up an unsustainable share of the corporate tax burden. An ineffective property tax system has small businesses throughout the city reeling and demanding a long-term solution.

Yet, Calgary continues to grow. Since I was elected in 2017, the population of our city has increased by 40,000 people and is projected to grow by another 94,000 by 2024. We are at the point where we require our civic leaders to make tough decisions.

I believe the solution is straightforward. We must reduce the cost of government by reducing our year-to-year operational costs, while at the same time investing in smart capital projects that drive revenue. Period.

So what does this mean?

Firstly, it means cutting down on the costs of operations: City council should continue making operational budget cuts and finding efficiencies in the way we run our city. After all, the citys operating budget is yearly over $3.5 billion, with half of that going towards wages.

In 2020, the majority of our unions are set to receive a 1.5 per cent wage increase, which translates to an operational budget increase of approximately $25 million. Given that we just reduced our city budget by $60 million in the summer of 2019, I believe this increase is restrictive in light of our current economic state. Advocating for a salary freeze at this time is the fair thing to do.

Secondly, it means being smart with our capital spends. To me, this means investing in projects that have significant socio-economic benefits for all Calgarians, projects like the event centre and the Green Line LRT project.

Some of you might find this to be a hypocritical conviction. I disagree. I believe these projects to be critical as Calgary grows and navigates the new and rapidly changing economy. Calgary has a population of nearly 1,300,000 people. It can no longer afford, nor is it responsible, to consider major projects in single silos. We must look at all projects in front of us holistically and evaluate each in terms of how it will benefit the entire city.

Take, for example, the event centre: this is the only project in the city right now that has both significant private funding behind it and a substantial revenue stream that will return the citys contribution.

Most importantly, the event centre is driving investment in a new district on lands that have not made the city a dime in decades. The entire culture and entertainment district will drive billions of dollars of private investment and, upon completion, billions worth of revenue right back into the city.

Simply put, it is prudent for council to consider capital projects like the culture and entertainment district that expand our tax base and not the tax rate.

Another project that is justified in a time like this is the Green Line LRT. I believe fundamentally that this project is essential, especially as we grow in population. Calgarys southeast and north-central regions are among our fastest-growing areas, and efficient public transportation is vital.

Realizing this project means making rational decisions and focusing on smart spends. A multibillion-dollar tunnel under downtown is neither realistic nor financially responsible. If the city could deliver an LRT from city hall to Seton in its first phase of the project, while providing an accelerated BRT project to the north, why would we not consider that option? Why wouldnt we split the line and deliver the best rider experience for the dollars we have. Wasnt that the vision?

As council navigates the challenges of the upcoming budget deliberations, my point remains the same. Based on the hand we have been dealt, reducing the cost of government and focusing on smart spending is the way forward.

Jeff Davison is the Calgary city councillor for Ward 5. He chairs the event centre assessment committee and is the vice-chair of the Green Line LRT committee.

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Davison: Calgary needs critical budget cuts and smart project spending - Calgary Herald