City of Edmonton projecting $34M deficit for end of 2024
Overtime pay, fuel, materials and contract calls are over budget, administration says
The City of Edmonton is projecting a $34 million budget deficit by the end of this year, finance officials told city council on Tuesday.
Inflation and higher fuel costs have been the common culprits over the past couple of years but the city is also coping with staffing shortages and calls to deal with infrastructure and vandalism, officials said Tuesday.
The city's total operating budget for 2024 is $3.48 billion, which includes revenues and expenditures in all city departments.
Kent Bjornstad, director of corporate accounting, policy and reporting, said the city is paying more overtime to staff covering vacancies, mainly in fire rescue services and public transit.
"The overtime is required to maintain existing service levels," Bjornstad said.
Recreation centres also need more staff and security, Bjornstad said, due to more public demand and an increase in security incidents.
Ward Sspomitapi Coun. Jo-Anne Wright said she's concerned with the overtime costs.
"Are we losing employees due to the stress and trauma of the job, are we losing them faster than we're able to replace them?"
Eddie Robar, interim city manager, said the city is seeing more staff absences and is looking to evolve its well-being and mental health programs.
"When we see the transition in time off leaning heavily on the mental wellness side of the fence, establishing program objectives to deal with that is something we are attuned to."
The city continues to recruit to fill vacancies, Robar added.
Personnel costs account for $14.3 million of the 2024 deficit, the report says.
The city projects it will cost $11.9 million more in contracts, ranging from calls to deal with aging infrastructure to vandalism and cleaning requests.
Other cost overruns include $9.8 million for material costs and $3.7 million in computer software costs.
The city is also projecting to lose about $13 million in transit revenue in 2024.
The city approves capital and operating budgets in four-year cycles and adjusts them twice a year, in the spring and fall.
Stacey Padbury, the city's chief financial officer, said the financial update shows the trend to date, before administration returns in the fall to present recommendations on how to save.
"I think we need to get there in a sequence of events, knowing that the next budget cycle is going to be probably as equally as challenging as this budget cycle."
In August, the finance department warned council that the scenario could be worse next year.
Administration will evaluate the options and present recommendations to council in November.
Council can amend administration's financial recommendations before approving the budget adjustments.
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