City Council confirms fall budget adjustments

December 5, 2024

City Council wrapped up fall budget adjustment discussions today, approving a number of changes to the 2023-2026 budget that result in a property tax levy increase of 6.1 per cent in 2025 and 6.8 per cent in 2026.

"Today's approval of the 2025 budget adjustments represents a significant step forward in building a more inclusive and sustainable Edmonton," said Mayor Amarjeet Sohi, "These decisions reflect our shared priorities of protecting core services, investing in critical infrastructure and ensuring fiscal responsibility. I am proud of the collaborative efforts that shaped this budget, reducing the overall tax levy increase by 2 per cent and I remain committed to working alongside Council, City staff and our community partners to deliver on our vision for a city that works for everyone."

The approved budget adjustments include both revenue increases and spending reductions as part of ongoing efforts to tackle budget challenges. Since last fall, the City has been making adjustments to the four-year budget in response to challenges like inflationary pressures, rapid population growth and changing service needs, which have made service delivery much more expensive than what was forecasted when the four-year budget was developed and approved in 2022.

The approved property tax increases will help to bring the City's operating revenues in line with the actual costs to deliver services now. To limit the required property tax increases, Council approved adjustments like:

• Accepting Administration's recommended $8.5 million in ongoing savings, including a lot of small changes including savings in contracts, materials and equipment, which helped minimize the impact on services. It also includes service changes, like slowing down the Heritage Program.
• Using the $8.0 million increase in the EPCOR dividend and the $9.7 million increase in franchise fee revenue to lower the tax levy.
• Addressing the projected transit revenue shortfall for the rest of the budget cycle using the LRT Reserve to offset the projected transit revenue shortfall for 2025 and 2026.
• Reducing the annual transfer from the operating budget to fund capital projects, known as Pay-As-You-Go, by $15.0 million. The City will develop a longer-term plan to restore these funds, which will be presented to Council next year.

Council approved several service increases without adding to property tax requirements:

• Ongoing funding for Centre City Optimization to continue work to support cleanliness, safety and vibrancy downtown.
• Ongoing funding to provide Capital City Clean Up for Business Improvement Areas outside of downtown.
• Advancing the Industrial Action Plan to support more industrial development within Edmonton.
• Increasing funding for turf and horticulture maintenance, as well as tree pruning, to help ensure well-maintained accessible green infrastructure and a healthy urban forest.

"Today's budget decisions are an example of how Council is taking the lead on navigating the City through a challenging time with inflationary pressures, a rapidly growing population and changing service needs," said City Manager Eddie Robar. "The decisions that City Council made will allow us to maintain the roads, bridges, pathways and transit that move people; deliver the emergency services and social supports people count on, and activate attractions, recreation centres, sports fields and parks that make Edmonton a great place to call home."

"This fall budget adjustment has allowed us to make some progress in tackling the City's budget challenges," said Stacey Padbury, the City's Chief Financial Officer and Deputy City Manager of Financial and Corporate Services. "These challenges are complex, and it will take time and tough choices to manage them. We'll continue to be open and transparent about our finances, the challenges we face and what we're doing to manage them to ensure our continued financial stability."

Council also approved several capital adjustments, resulting in a $234 million addition to the capital budget. The adjustments include:

• $105 million in tax-supported debt for the Yellowhead Trail Freeway Conversion Program
• $87 million in new profiles from the Neighbourhood Renewal Reserve fund
• $41 million in increased provincial funding for Terwillegar Drive Expressway upgrades

The City will continue to deliver on more than 200 projects in the 2023-2026 capital budget that Council approved in 2022, including LRT expansion projects, the Lewis Farms Recreation Centre, and the High Level Bridge and William Hawrelak Park rehabilitation projects.

The annual tax increase will affect individual property owners differently, depending on how their property's assessed value compares to the market. An average Edmonton household would pay about $813 in property taxes for every $100,000 of their assessed home value in 2025. This is an increase of $47 more than in 2024. Property owners will learn about their assessment in January 2025 and will receive their tax notice in May 2025.

The fall supplemental operating and capital budget adjustments are part of the City Council-approved multi-year budgeting approach. Adjustments are scheduled each year so the City can respond to significant changes that have happened since the four-year budget was set. Council also approved an update to this process during the fall budget adjustment. Moving forward, the spring operating budget adjustment will be focused on finalizing the tax levy increase approved in the fall, unless there are unforeseen circumstances. The spring operating budget adjustment will happen in April 2025; the next capital budget adjustment will happen in June 2025.

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