The City of Edmonton has introduced a series of operational measures to reduce costs in support of city council's request for $60 million in savings over the 2023-2026 budget cycle.
Effective Feb. 1, spending on new hires, travel, training, and some consultants will be restricted, the city confirmed to Taproot. All recruitment will be reviewed by deputy city managers, with only critical postings allowed to proceed, but some hiring will continue.
"This is not a hiring freeze, I want to be clear," city manager Andre Corbould said at a city council meeting on Jan. 25. "It's a restraint mechanism."
Corbould said the city would honour the collective agreements it has in place. "I recently expressed that we would do this in a meeting with the coalition of civic unions," he said. "We'll honour that commitment of collective agreements for sure."
Deputy city managers will also review all travel and external training requests, approving only essential or legally required activities. Likewise, expenditures for hosting must be pre-approved and only for essential business. The use of management consultants to provide external advice on business strategy will be limited.
While the city does not have an estimate for the financial impact of the measures, spokesperson Janice Schroeder said administration will report back to council next month on some of the initial savings. "For example ... we will likely know how many recruitments were cancelled before an offer was made, and how many vacant positions were deemed critical/not critical in the first weeks of the program."
The measures have been introduced in support of an amendment to the 2023-2026 operating budget put forward by Mayor Amarjeet Sohi that directed administration to find $15 million in savings per year, without impacting frontline essential services.
In a statement to Taproot, Sohi said he was pleased to see administration moving forward with the spending restraints. "This budget was about affordability, not austerity — making life more affordable for all Edmontonians continues to be a shared goal of both Council and City of Edmonton administration," Sohi said.
Corbould told council he's confident the desired outcome can be achieved.
"That $60 million has already been taken out of the budget," he said. "I'm confident we can accomplish that reduction, and I've called on all service areas of the organization to consider and contribute to that work."
In addition to the new measures, administration has begun reviewing cross-departmental overlap and other opportunities for savings. For example, multiple departments such as parks and transportation might be responsible for emptying garbage cans, and consolidating that activity might be more efficient.
"In a lot of cases it makes sense, but we want to make sure we challenge ourselves on that," Corbould said.
Coun. Anne Stevenson said her experience as an employee of the city suggests there's room for improvement.
"There's a lot of internal red tape and processes that can reduce the meaningfulness of people's work while also using up a lot of resources, so I'm really pleased that that's going to be a focus," she said.
Corbould clarified that only part of the city's $3.3-billion annual expenditure budget would be impacted, as some items such as debt repayment and legislative obligations cannot be reduced. About 20% of the city's budget is spent on agencies, boards, and commissions external to the City of Edmonton, so that's another area that will not be impacted automatically. Once those and other constraints are removed, Corbould said the required $15 million per year in savings is about 1% of the resulting budget.
Council will decide at a future meeting whether to ask external organizations, such as the Edmonton Public Library and the Edmonton Police Service, to undertake a similar cost-savings exercise. Coun. Andrew Knack noted that the Edmonton Police Service budget is a significant part of the budget, and suggested perhaps it should undertake a similar review.
"I would propose at this point that we have a completely different process that is coming to council," Corbould said. "I think we're on a funding formula path for EPS and I think we should stick to that."
Reallocations will be more difficult
The budget amendment, known as OP12, also directed administration to identify another $240 million over the four-year cycle that could be reallocated to priority areas.
Corbould said while that works out to about 7.3% of the city's annual budget, it's actually closer to 14.6% when constraints are taken into consideration. While that sounds like a significant amount, Corbould said it's important to remember that the $240 million is a reallocation, not a reduction.
"This is not austerity because we're not being asked to cut, we're being asked to transition," he said, adding that identifying the $240 million will be more difficult than the $60 million in reductions.
Corbould presented seven streams of work to council to meet the requirements of OP12, a majority of which are connected to the $240-million reallocation. The first is to review past audits and other previous work to identify efficiencies.
"I would see a collaboration with the city auditor on OP12 as we go forward," Corbould said. "We're going to look at all the recent audits."
Other work streams include reviewing the structure of the City of Edmonton, soliciting ideas from council, and defining core services.
The goal of coming at the problem from a variety of perspectives is to identify more than $240 million in expenditures that could be reallocated. "We want to give you not just some options, but a menu of options," Corbould said.
Monthly meetings for collaboration
Corbould indicated that he'd like to bring OP12-related work to council every month, usually with a request for a decision about something and new information for councillors to consider. "If we can create that cycle, it'll be a better collaborative cycle for all of us."
On Feb. 22, council is expected to make a decision about the definition of core services and will receive information about the list of policies that will be reviewed and updated. On March 14, administration will present its initial actions to find savings for 2023, recommendations on funding that could be shifted to priority areas, and ideas for revenue generation.
Monthly meetings will continue until the fall, with all financial decisions made along the way incorporated into a package for council's consideration during the 2023 fall operating budget adjustment process.
"We're starting the budget process today, I would say," Corbould said. He cautioned that the process will take time, however.
"I see us coming multiple times over the first two years with all the ideas for the $240 million," he told council. "From start to finish ... I don't think we'll have this done and dusted in this fiscal year, but I think we'll be well on our way."
For more on what OP12 means for city council's decision-making, listen to Episode 206 of Speaking Municipally, Taproot's weekly podcast on civic affairs.