City faces threat of cuts to service
Council warned $325M in savings may not be enough amid downturn
While $325 million in savings has been found amid an unprecedented downturn, the ongoing economic gloom and declining revenues are forcing the city “to live by more modest means,” Calgary’s top manager said Tuesday.
City manager Jeff Fielding said after a decade of prosperity, service cuts could be on the horizon, and Calgary’s next council will face decisions between niceto-haves and necessities in the months after the October election.
“For the very first time, you’re going to have a services list . . . You’re going to go through that list and say, ‘What’s core? What’s not?’ ” Fielding told council’s priority and finance committee on Tuesday.
“As a new council, you’re going to have to make some decisions about core service delivery and what you’re prepared to abandon if you want to be on a cost reduction scheme.”
From a $17-million drop in Calgary Transit revenues in 2016 to a $41-million decline in utility revenues, Fielding said the city’s next budget must deal with the loss in revenue streams.
“Revenue is a concern and we’re going to have to talk to you about that revenue in the future,” Fielding told elected officials, later telling media the revenue shortfall will be at least $100 million.
At the same time, $325 million in savings have been tallied across the city through cost reductions and efficiencies over the past twoand-a-half years.
“Some of that has gone for tax relief, some of it is covered off in revenue shortfalls, some of it, in fact, is not allocated yet and is in a savings account,” Fielding said.
While significant, the savings may not be enough if the economy doesn’t bounce back.
“We’re getting to the point where I don’t have a lot of capacity. I’ve pretty much used all of my tricks from where I’ve been before,” said Fielding, who previously earned praise as a city manager in London, Ont., and Burlington, Ont.
“I’m running out of new ideas, so we may have to fall back on some of the traditional things about cutting services.”
After Tuesday’s meeting, Mayor Naheed Nenshi told reporters that council “has to determine whether we have adequate revenues to fund the services that we think are important.”
The mayor also said city administration is “very on top of the financial situation.”
Fielding, who took over the job of Calgary’s city manager in mid-2014 when the economy was booming and the city was scrambling to accommodate 40,000 new people a year, said the organization was forced to quickly adapt when the economy took a nosedive.
“There’s one mantra. If you don’t need to spend the money, don’t,” he said. “We’re very clear about that.”
The city’s top bureaucrat relayed to elected officials a story about his childhood to emphasize what’s in store for the years to come.
Fielding said though his family had “very modest means,” they always went on vacation, he always played sports and always wore good clothes because his parents found ways to use their money efficiently.
There’s one mantra. If you don’t need to spend the money, don’t. We’re very clear about that.
“I never felt that we went without, but we never had any scads of money for lots of extras,” he said.
“That’s how we have to shift right now. We’ve been very fortunate for the past 10 years of being not only a wealthy community but a wellfunded organization. And we’re now going to have to adopt some practises that will be different.”