Current Issues - Administration PoliciesBudgeting ProcessAt present the Administration prepares its annual budgets using the incremental approach. Department managers assume that expenditures incurred during the current year will be incurred in the next budget year. Based on that underlying assumption, the Administration prepares and submits for Council approval, a budget that highlights only the funds needed to cover anticipated spending increases.The incremental budgeting approach assumes that current year's expenditures are justifiable from one year to the next. In reality, funding needs in large organizations, including municipal corporations, can change from year to year. Goals and priorities change, and as new projects and initiatives are undertaken, others are completed, deferred or abandoned. This can open the door to reassignment and reallocation of resources.Zero-base budgeting starts with examining the goals and priorities of the organization in the coming year. With that, the organization can formulate resource requirements with the aim of maximizing efficiency and minimizing costs.While some may see this as the objective of for-profit, investor owned corporations, time has come for the Administration to adopt this more rigorous approach to budgeting and give St. Albert taxpayers a break.Compensation PolicyAccording to the City's compensation policy salary increases for non-union staff are benchmarked to the 60th percentile of comparators in Alberta. The comparators used in the benchmarking process consist of salary levels of employees in nine comparable Alberta cities, and salaries in comparable positions with the Alberta government and the U of A.The problem with this approach is that as median salaries rise, the 60th percentile benchmark increases, which in turn raises the new median. This snowballing effect tends to produce rapid increases in salaries. Secondly, exclusion of comparators in the much larger private sector distorts the results of the benchmarking process.A recent study by the Canadian Federation of Independent Business has found that as of 2007 municipal workers earn more than their private sector counterparts, and combined with benefit plans the differential was 31%!Over the last two years, while many employees in the private sector have had to take pay cuts or lost their jobs and pensions, municipal workers are enjoying a bonanza. With lucrative salaries, generous benefits and pensions, and unparalleled job security, time has come to bring the salaries of workers in the government sector in line with those in private sector.Risk Assessment & Cost ControlsRiel Park Redevelopment was conceived as a multi-purpose facility designed to host various local recreational programs to serve the residents of St. Albert and neighbouring communities.Based on 2006 cost estimates, the project was to cost $8.4 million, with $1.4 million earmarked for site remediation and $7 million budgeted to replace existing facilities. Fast forward to 2009, and the project cost had risen to $27.7 million ($7.65 million for site remediation and $20.05 million for new facilities). Earlier this year it was revealed that project needs even more money! The project expected to be completed in 2012 now has a budget of $30.4 million. The new football field and parking facilities, which had $800,000 set aside for construction at Servus Place, cost $7.75 million. There has been very little public discussion about this project. In fact Council meeting records show that several "in camera' meetings took place to discuss this project behind closed doors. The huge increase in costs begs the question 'what happened'? Some of the increase in remediation costs stemmed from unforeseen site conditions. If so, it would seem that City Hall didn't fully evaluate the risks of development on a former landfill site.As for the tripling of the cost of the replacement facilities, it is not clear how much of that has resulted from increasing the scope of the project, and how much is due to lack of spending oversight. Either way, all St. Albert taxpayers should be concerned about how the cost of this project has been allowed to triple, and the secrecy surrounding project decisions.Municipal Price Index Statistics Canada inflation indices are recognized as accurate and credible measures of inflation. StatsCan indices are used by government departments, municipalities, construction contractors as well as by researchers, economists, analysts, and anyone else interested in obtaining reliable inflation data.In 2008, the City of St. Albert started using a Municipal Price Index. Initially "borrowed" from Strathcona County, the Administration has since developed its own index, unique to the City of St. Albert, which is used during the budgeting process. The index is based largely on Conference Board of Canada indices. St. Albert's Municipal Price Index ReportIn its Audit of the Municipal Price Index 2007, Ottawa's Auditor General said the "...it is our opinion that the indexes should be used with extreme caution...and that the MPI is not a standard index and there is not an established or recognized model for its calculation." The Auditor General recommended that should the MPI be used, that an "independent specialized third party should validate the city model". Read the full report here of the Audit of the Municipal Price IndexSt. Albert Taxpayers Association is concerned about the design of the MPI index and the Administration's reliance on this indicator to forecast inflation trends in St. Albert.Your Membership is Your VOICE
Current Issues - Administration Policies
Budgeting Process
At present the Administration prepares its annual budgets using the incremental approach.
Department managers assume that expenditures incurred during the current year will be
incurred in the next budget year. Based on that underlying assumption, the Administration
prepares and submits for Council approval, a budget that highlights only the funds needed
to cover anticipated spending increases.
The incremental budgeting approach assumes that current year's expenditures are
justifiable from one year to the next. In reality, funding needs in large organizations,
including municipal corporations, can change from year to year. Goals and priorities change,
and as new projects and initiatives are undertaken, others are completed, deferred or
abandoned. This can open the door to reassignment and reallocation of resources.
Zero-base budgeting starts with examining the goals and priorities of the organization in the
coming year. With that, the organization can formulate resource requirements with the aim
of maximizing efficiency and minimizing costs.
While some may see this as the objective of for-profit, investor owned corporations, time
has come for the Administration to adopt this more rigorous approach to budgeting and give
St. Albert taxpayers a break.
Compensation Policy
According to the City's compensation policy salary increases for non-union staff are
benchmarked to the 60th percentile of comparators in Alberta. The comparators used in the
benchmarking process consist of salary levels of employees in nine comparable Alberta
cities, and salaries in comparable positions with the Alberta government and the U of A.
The problem with this approach is that as median salaries rise, the 60th percentile
benchmark increases, which in turn raises the new median. This snowballing effect tends to
produce rapid increases in salaries. Secondly, exclusion of comparators in the much larger
private sector distorts the results of the benchmarking process.
A recent study by the Canadian Federation of Independent Business has found that as of
2007 municipal workers earn more than their private sector counterparts, and combined with
benefit plans the differential was 31%!
Over the last two years, while many employees in the private sector have had to take pay
cuts or lost their jobs and pensions, municipal workers are enjoying a bonanza. With
lucrative salaries, generous benefits and pensions, and unparalleled job security, time has
come to bring the salaries of workers in the government sector in line with those in private
sector.
Risk Assessment & Cost Controls
Riel Park Redevelopment was conceived as a multi-purpose facility designed to host
various local recreational programs to serve the residents of St. Albert and neighbouring
communities.
Based on 2006 cost estimates, the project was to cost $8.4 million, with $1.4 million
earmarked for site remediation and $7 million budgeted to replace existing facilities. Fast
forward to 2009, and the project cost had risen to $27.7 million ($7.65 million for site
remediation and $20.05 million for new facilities). Earlier this year it was revealed that
project needs even more money! The project expected to be completed in 2012 now has a
budget of $30.4 million. The new football field and parking facilities, which had $800,000 set
aside for construction at Servus Place, cost $7.75 million.
There has been very little public discussion about this project. In fact Council meeting
records show that several "in camera' meetings took place to discuss this project behind
closed doors. The huge increase in costs begs the question 'what happened'? Some of the
increase in remediation costs stemmed from unforeseen site conditions. If so, it would seem
that City Hall didn't fully evaluate the risks of development on a former landfill site.
As for the tripling of the cost of the replacement facilities, it is not clear how much of that has
resulted from increasing the scope of the project, and how much is due to lack of spending
oversight. Either way, all St. Albert taxpayers should be concerned about how the cost of
this project has been allowed to triple, and the secrecy surrounding project decisions.
Municipal Price Index
Statistics Canada inflation indices are recognized as accurate and credible measures of
inflation. StatsCan indices are used by government departments, municipalities,
construction contractors as well as by researchers, economists, analysts, and anyone else
interested in obtaining reliable inflation data.
In 2008, the City of St. Albert started using a Municipal Price Index. Initially "borrowed" from
Strathcona County, the Administration has since developed its own index, unique to the City
of St. Albert, which is used during the budgeting process. The index is based largely on
Conference Board of Canada indices. St. Albert's Municipal Price Index Report
In its Audit of the Municipal Price Index 2007, Ottawa's Auditor General said the "...it is our
opinion that the indexes should be used with extreme caution...and that the MPI is not a
standard index and there is not an established or recognized model for its calculation." The
Auditor General recommended that should the MPI be used, that an "independent
specialized third party should validate the city model". Read the full report here of the Audit
of the Municipal Price Index
St. Albert Taxpayers Association is concerned about the design of the MPI index and the
Administration's reliance on this indicator to forecast inflation trends in St. Albert.
Your Membership is Your VOICE
