City Announces Accelerated Financially Fit Initiative
Medicine Hat – The City of Medicine Hat announced today the Accelerated Financially Fit Initiative, fast tracking the initial effort launched by City Council in 2016. The original initiative committed to finding $23M in annual net cost reduction in response to the loss of the City’s commodity-based revenues. Over the past four years, the initiative has solved approximately one-third of the target, but with increasing financial pressures, the gap is growing - shortening the time the City has to execute solutions.
“With ongoing oil and gas losses, as well as additional challenges created by the global pandemic and lower transfers from the Government of Alberta, our revenues continue to decline while our expenses face inflationary pressure,” says CAO Robert Nicolay. “The 2021 budget update will be presented to Council for their consideration in the next few months, and it must be balanced. We need to bring our expenditures in line with our revenues. We can’t rely on our reserves and we are determined to avoid resorting to excessive tax increases to address our budget gap.”
A concerted effort is underway at the City to implement solutions that reduce costs and increase revenues, while minimizing any adverse impacts to amenities, programs and services that residents value. The City of Medicine Hat’s 2019-2022 Budget originally included annual property tax increases of 4.0% to help address the growing budget gap. In response to the global pandemic, property owners saw a one-time COVID rebate in 2020 that essentially kept taxes at 2019 rates, funded through reserves. The 2021 budget update will also aim for a 0% property tax increase, intensifying the challenge.
Assessment base growth and cost-saving measures will comprise a significant portion of the plan, and impacts to City staff are expected.
“The acceleration of the plan will include reductions in staff,” says Nicolay. “We are committed to being transparent with employees as we work through this difficult period, and we will attempt to facilitate staff reductions through attrition and retirement options wherever possible.”
Recent contract negotiations with the Canadian Union of Public Employees that resulted in an agreement that will see 0%, 0% and 2% annual wage adjustments over the next three years will also help the effort. Out of scope employees also received a 0% increase in 2020.
City officials are committed to preserving the Medicine Hat Advantage and sharing progress on balancing revenues and expenditures for the 2021 budget update.
“Our residents enjoy a tremendous quality of life here in Medicine Hat and we don’t want that to change, but we are signaling to the community that these financial challenges are significant,” says Nicolay. “We continue to focus on being responsible stewards of the public purse and finding solutions that don’t add to the burden on taxpayers. We do anticipate changes to service levels will be proposed in some of our municipally-provided services, and any proposed changes will be discussed with Council as part of the budget process.”
To learn more about the Accelerated Financially Fit Initiative visit www.medicinehat.ca.
Media Inquiries
media@medicinehat.ca
“With ongoing oil and gas losses, as well as additional challenges created by the global pandemic and lower transfers from the Government of Alberta, our revenues continue to decline while our expenses face inflationary pressure,” says CAO Robert Nicolay. “The 2021 budget update will be presented to Council for their consideration in the next few months, and it must be balanced. We need to bring our expenditures in line with our revenues. We can’t rely on our reserves and we are determined to avoid resorting to excessive tax increases to address our budget gap.”
A concerted effort is underway at the City to implement solutions that reduce costs and increase revenues, while minimizing any adverse impacts to amenities, programs and services that residents value. The City of Medicine Hat’s 2019-2022 Budget originally included annual property tax increases of 4.0% to help address the growing budget gap. In response to the global pandemic, property owners saw a one-time COVID rebate in 2020 that essentially kept taxes at 2019 rates, funded through reserves. The 2021 budget update will also aim for a 0% property tax increase, intensifying the challenge.
Assessment base growth and cost-saving measures will comprise a significant portion of the plan, and impacts to City staff are expected.
“The acceleration of the plan will include reductions in staff,” says Nicolay. “We are committed to being transparent with employees as we work through this difficult period, and we will attempt to facilitate staff reductions through attrition and retirement options wherever possible.”
Recent contract negotiations with the Canadian Union of Public Employees that resulted in an agreement that will see 0%, 0% and 2% annual wage adjustments over the next three years will also help the effort. Out of scope employees also received a 0% increase in 2020.
City officials are committed to preserving the Medicine Hat Advantage and sharing progress on balancing revenues and expenditures for the 2021 budget update.
“Our residents enjoy a tremendous quality of life here in Medicine Hat and we don’t want that to change, but we are signaling to the community that these financial challenges are significant,” says Nicolay. “We continue to focus on being responsible stewards of the public purse and finding solutions that don’t add to the burden on taxpayers. We do anticipate changes to service levels will be proposed in some of our municipally-provided services, and any proposed changes will be discussed with Council as part of the budget process.”
To learn more about the Accelerated Financially Fit Initiative visit www.medicinehat.ca.
Media Inquiries
media@medicinehat.ca
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