Calgary Herald

Union wages factor into city budget plans

- Jason Markusoff jmarkusoff@calgaryher­ald.com

The city’s looming contract deal with its biggest unions could make it even tougher to balance the budget without hefty property-tax hikes.

The city’s finance department suggested this week that an eightper-cent increase for 2012 and seven per cent for both 2013 and 2014, to offset a growing gap between civic expenses and revenues.

But that figure is fluid, since worker salaries are the largest component of spending, and the city is currently renegotiat­ing them.

“We’ve got built-in assumption­s on what we think they’re going to be and based on what we’ve seen so far, it appears as though we might have to make some slight adjustment­s,” said Ald. Andre Chabot, peeling back the curtain slightly on a closed-door briefing council had this week on the negotiatio­ns.

“Upwards, but not that significan­tly, but everyone’s based in a wait mode right now, looking to see what other unions in the province are going to be able to negotiate.”

A deal with its two main labour groups is likely by May or June, when council will set the preliminar­y tax increases for the next three years.

Another potential trendsette­r in wage deals came last week with the Stelmach government’s tentative agreement with the provincial employees’ union: a 2 1/2-year deal that offers lump payments of $3,000 atop a four-per-cent pay increase.

Peter Marsden, president of union for the city’s indoor workers, said most Alberta public-sector groups have gotten pay increases around something in the three-to five-point range. He noted that aldermen’s own pay hike for 2011 was 4.7 per cent.

“Some (aldermen) talked about improving services and delivering services, like snow removal — those things cost money,” he said.

“The people that provide those services have to live in Calgary.”

The city’s last contract with its two key unions offered a nine-per-cent raise over two years.

For every one percentage point that city salaries rise, property taxes have to go up 1.4 per cent, chief financial officer Eric Sawyer told council this week.

It’s unclear what pay figures city officials projected in its tax estimates. But they pegged this year’s “municipal” inflation rate — the combinatio­n of costs for salaries, service contracts, fuel, and materials — at 2.7 per cent for 2011 and 3.6 per cent for 2012.

That’s lower than it was recently, suggesting the city expects a cooldown.

But city hall with face pressures as the price of fuel, asphalt and other things increase as well, Ald. Gord Lowe noted.

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