In his 2018 State of the City address on January 16, 2018 to the Lethbridge Chamber of Commerce, Mayor Chris Spearman discussed the progress the past year in addressing social issues, initial priorities for the new city council, property taxes and budgeting, and the exciting developments as well as challenges in economic development.
Provided below are the slides and text from Mayor Spearman's presentation.
View the 2018 State of the City presentation slides
I would like to acknowledge that we are on Blackfoot land, and I want to give recognition to the Blackfoot people – past, present and future.
On behalf of the entire Lethbridge City Council I want to thank you for inviting me here today. I'm excited to share the success of the last year and the give some insight into what we see on the horizon in the coming year and beyond.
My Latin is a little rusty, but I would like to point out that the motto on our City crest translates to "Gateway to Opportunity".
I think this motto is as fitting today for our city as it was more than a century ago.
2017 was a significant year for Lethbridge and saw us take major steps on a number of fronts.
Some of these accomplishments exemplified the teamwork and collaboration that Lethbridge is known for.
Over the course of the year, we also made rapid progress on addressing some unprecedented social issues in our community.
Mission to Asia
A delegation from Lethbridge and the surrounding region travelled to China and Japan to pursue opportunities for economic development and educational partnerships.
This trip was a very valuable venture for our community.
Not only were we able to make important business and educational connections, but we also built very strong relationships with many partners in Asia.
While in Japan, we also had the special honour of extending a personal invitation to Her Imperial Highness Princess Ayako of Takamoda from Japan to visit Lethbridge in July for the 50th anniversary of the Nikka Yuko Japanese Garden.
Leaders' Coalition on Opioid Use
You've likely heard about the opioid crisis and seen for yourself how it's manifesting itself here in Lethbridge in public drug use and needle debris.
I'm part of a broad-based coalition of leaders who've been collaborating the past year on a comprehensive community response to this crisis.
Last fall, Health Canada announced it had approved an application by ARCHES to establish Supervised Consumption Services in Lethbridge.
This was an incredibly important announcement for Lethbridge because it's going to save lives.
We expect this facility to be ready to open early this year at the approved site on 1 Avenue South, just east of downtown.
We are hoping that one of the tangible benefits you will see, as businesspeople and everyday citizens, is a noticeable reduction in public drug use and public needle debris.
In September, the first-ever Reconciliation Week event was held in Lethbridge.
The following week, we welcomed chiefs and other members of Blackfoot nations from across southern Alberta to raise the Blackfoot Confederacy flag at city hall.
City Manager Retirement
The Chamber has taken a keen interest in the retirement of Garth Sherwin as our City Manager and the process of selecting his successor.
One of the best things we did was appoint Kathy Hopkins as Interim City Manager to assist Council through this process and provide leadership to our organization during this transition.
We're providing interested citizens and interested organizations like yours the opportunity to offer input to aid in the development of an updated City Manager job profile.
It's a comprehensive process, and we hope to make a selection by late April or early May.
In October, we welcomed two new Council members: Mark Campbell and Belinda Crowson. We'll begin meeting early this year to develop a strategic plan that sets out our priorities for our four-year term on Council.
Work got underway and continued on some major municipal projects, and we saw significant federal infrastructure investment that will aid the growth of our city's industrial park for years to come. Council also established our priorities for capital projects for the next 10 years.
Whoop-Up Drive Twinning/Metis Trail Construction
According to our 2017 census west Lethbridge continues to be the fastest growing area of our City.
Construction began in April on two key arterial road projects in west Lethbridge: the twinning of the west end of Whoop-Up Drive and the new section of Métis Trail between Walsh Drive West and Whoop-Up Drive.
Construction on both of these vital arterial roads was advanced by five years and should be complete by fall this year.
These new arterial roads are enhancing access to residential areas, schools and the major commercial core that is developing in the Crossings.
ATB Centre-Phase 2
Construction of ATB Centre-Phase 2 is on budget and on time to open in the spring of 2019.
This is one of the most exciting projects in the history of our city. When phase 2 of this leisure complex opens, it's going to be a destination for residents of Lethbridge as well as our region and I expect it will even draw visitors from around Alberta and southeastern BC.
2018-2017 Capital Improvement Program
In May, City Council approved a new 10-year CIP.
The projects we funded in the first four years of this plan demonstrate the strong focus Council put on maintaining our current assets and ensuring the safety of our residents.
Some of the significant projects in the next four years include:
•a new west Lethbridge fire station,
•an expansion of the Southern Alberta Art Gallery
•planning and design of a Performing Arts Centre
•detailed design of the Exhibition Park Trade and Convention Centre & Agriplex
•and the twinning of the south end of University Drive West.
Federal Infrastructure Funding
Last summer, the federal government committed 11.2 million dollars toward the 22-million-dollar cost of expanding water, sewer and stormwater infrastructure capacity in the Sherring Industrial Park.
This funding support will help provide for the creation of jobs and the economic diversification of our city and region.
Leading the way is the unprecedented 350-million-dollar investment by Cavendish Farms, which broke ground in 2017 on a new, state-of-the-art frozen potato plant.
Steady, Sustainable Growth
In terms of new construction, Lethbridge continues to have very steady, sustainable growth.
The construction value of building permits issued in Lethbridge last year was down slightly from 2016 but was still more than double what they say in other mid-sized cities in the province.
Where are the investments coming from?
Much like we saw in 2016, the investments in 2017 were almost evenly balanced between the private and public sectors.
This means companies are continuing to choose Lethbridge as a place they want to be because Lethbridge is an excellent place to operate a business and offers their employees an attractive quality of life.
Steady, Sustainable Growth
With a population of 97,000, Lethbridge has grown by more than 15,000 people in the last decade.
That's 18%. Using that math we'll be at 115,000 in another 10 years.
But we are still just 2% of the Alberta population.
In 2016, Lethbridge witnessed the fastest annual population growth of any Alberta city that conducts an annual census (2.1% growth in Lethbridge vs 0.4% in Calgary and -1.0% in Red Deer)
Planning for Growth
A big part of planning for our growth is Economic Development.
Thank you to Economic Development Lethbridge for the work they are doing to supporting existing businesses and attracting new businesses to our city. They also work hard to gather data (like the statistics I'm sharing with you today), research and provide analysis that helps us continue to develop our local economy.
Lethbridge Economic Indicators
The number of new business licenses issued in Lethbridge remained steady in 2017.
We had 341 up to the end of November, so we expect the year-end number to be very close to the previous year.
From the chart here, you can see that even during economic downturns that hit the rest of Alberta fairly hard in 2008 and 2014, Lethbridge growth remained relatively steady.
Our unemployment numbers are among the best in the province, and are two per cent below the provincial average.
Here's another look at unemployment numbers going back to late 2016.
As you can see, other Alberta cities had significantly higher unemployment over that period, and the more recent trend points to the economy recovering across the province.
What is needed to operate the City of Lethbridge?
What does it take to operate the City on a day-to-day basis? As we look at the top operating costs, the bulk goes towards the essential services that we need to be a safe, vibrant and healthy place to live.
23% Protective Services (police, fire and ambulance)
19% Infrastructure & Transportation Services
18% Leisure & Human Services
These four areas comprise about 77% of our annual operating budget.
Where does the operating budget come from?
So, where does the revenue come from to fund the operating budget?
40% comes from sales of goods and services including utility service charges and user fees for things like recreation and cultural facilities.
30% comes from the municipal portion of your property taxes and other municipal levies.
12% comes from provincial and federal grants, and you can see the rest of the breakdown in the chart.
Where does your tax dollar go?
Here's a more detailed illustration to break down what the municipal portion of your tax bill paid for in 2016
You'll again see the largest per cent going towards our vital, emergency services with police at 22% and Fire & Ambulance at 15%.
We have some excellent resources on the City website that provide additional detail and are really easy to understand. Just visit
lethbridge.ca and search "City Finances".
Property Taxes in Lethbridge
I often get asked about taxes.
Some residents have the impression that Lethbridge has higher taxes than other cities in Alberta and Canada.
This slide shows a comparisons of Canadian cities for total taxes per person (both business and residential).
As you may be aware, Lethbridge does not have business tax while a city like Calgary does. By combining residential and business taxes, we get a more accurate comparison of the total tax dollars being collect by each city per person.
You can see here that Lethbridge is very competitive with other cities in terms of overall property taxes.
Cities have two assessment bases from which they draw taxes to help fund their annual operating budgets: residential and non-residential (commercial).
When residents ask me why residential taxes in Lethbridge aren't lower, I point to this comparison.
In Lethbridge, our commercial assessment base makes up a smaller proportion of our overall property assessment base than other mid-sized and major Alberta cities. Most are around 25 percent, while in Lethbridge it's only 19 per cent.
By working hard to attract new business to Lethbridge, we want to gradually increase our proportion of commercial assessment base, which would allow us to shift some of the tax burden from residential taxpayers.
This slide gives you an idea of how Lethbridge stacks up in total assessment value of commercial property compared to other Alberta communities, big and small.
So again, I think this helps illustrate that by attracting new business and supporting the growth of existing businesses, we can increase our commercial assessment base and provide a better balance between residential and non-residential property taxes.
Tax Ratio Trend
I'm sure that as business people, this chart will be of particular interest to you.
It compares the overall commercial-to-residential tax rate ratio for Lethbridge versus other Alberta cities.
As you can see, we're in the middle of the pack with Medicine, with Edmonton and Calgary at the high end, and Grande Prairie – not surprisingly – at the low end due to their larger commercial tax assessment base.
City's Role in Land Development
Sometimes I get asked about the City's involvement in land development.
The City certainly has a limited role that ultimately benefits the entire community.
Over the past 10 years, the City's market share of serviced residential land sold is18 per cent.
It's worth noting that other cities are also involved in land development.
According to the most recent numbers we have, the City of Medicine Hat has a 90-per-cent market share, Saskatoon has a 50-per-cent market share, and Red Deer has a 35-per-cent market share.
In smaller communities like Nobleford and Nanton, the municipalities are the only players in land development.
The City's land department is self-funded, and the profits it generates are invested to help pay for capital projects, offsetting the need to fund these projects through increased taxation.
To me, that's a win for all of us.
The City's dollars often help leverage substantial grants from other levels of government.
2018 Priorities for City Council
City Manager Search Process
As you well know, City Council is in the process of searching for a new city manager.
Some of you likely attended a special Community Issues Committee meeting yesterday afternoon where we invited interested people and organizations to offer their input to aid in the development of an updated City Manager job profile.
You still have until this Friday to make a submission in writing or online.
We are engaging a recruitment firm, and we expect to name a new city manager this spring.
Council members will also be meeting in the near future to begin developing a strategic plan for our four-year term.
The purpose of a strategic plan is to establish priorities that will guide Council's decision making and set a clear direction for our municipal organization over the next four years. Typically, a strategic plan is the product of a series of facilitated meetings and in-depth discussions among Council members over several weeks or months where we seek to identify and articulate the strategies most important to us collectively, as City Council.
This will be an opportunity for each of us on Council to articulate issues, concerns or values important to us individually as well as those we heard during the election campaign from Lethbridge residents as well as community groups about what the pressing needs are in our city.
We would also like your input on what you see as priorities, from a business perspective, so please make a point of contacting us to let us know what you think.
We'll also begin to prepare for the important process of developing and approving a new multi-year operating budget in the fall of 2018.
Community growth is a blessing as well as a challenge when it comes to developing a new operating budget.
Unlike income tax, there is no indexing of property taxes for municipalities.
So, our only mechanisms for dealing with inflation and new operating costs are to look for greater efficiencies, to raise taxes, or to cut services.
A one-per-cent tax increase generates $1.3 million in additional revenue for the operating budget.
One area of pressure for our next operating budget is the loss of grants in lieu of property taxes that we used to received from the province on provincially-owned senior's facilities. Those provincial grants were eliminated a couple of years ago, so we will have to make up the loss of nearly a million dollars annually that we used to receive from the province.
Taxation can also be used to create borrowing capacity to fund capital projects. A one-per-cent tax increase would create $15 million in borrowing capacity – to cover the annual cost of repaying that debt over time.
There is a desire in our community for major new facilities such as a performing arts centre, a convention centre and a third bridge across the Oldman River.
One of the reasons Lethbridge maximizes provincial and federal grants for capital projects is to minimize the impact on local taxpayers for major projects.
For example, without these types of grants, a 75-million-dollar performing arts centre would require a five-per-cent tax increase, and a 180-million-dollar bridge would require a 12-per-cent tax increase – just to fund construction.
Advocating for Continuation of MSI program
The provincial Municipal Sustainability Initiative has been incredibly important for Lethbridge, and we are advocating strongly for the provincial government to commit to continuing it in the future.
This grant program has helped fund major community projects such as the Enmax Centre expansion, the new downtown Fire Headquarters, CASA, ATB Centre construction, the Henderson Pool renovation, and the police headquarters expansion.
So far, the province hasn't said NO to continuing MSI, but they haven't said YES, either.
So we are continuing to emphasize to the province how important this program is, and we will continue to impress on them the need to commit to continuing it into the future.
The Future Looks Bright!
I would like to close by telling you that I'm excited about the future of our city!
There are many exciting things on the horizon for Lethbridge.
The City is in the midst of expanding the Sherring Industrial Park to ensure we can accommodate growth in the coming decade. The groundwork that's happening today will culminate in a number of growth initiatives that will create new jobs in our community in 2019.
•Cavendish Farms will open their new frozen potato processing facility.
•The Destination Project at U of L will be complete and will open
•ATB Centre-Phase 2 will open in the spring of 2019 and will become a destination leisure facility.
•Two new agri-food facilities will open in the Sherring Industrial Park.
Collectively, these initiatives will result in at least 500 new jobs right here in Lethbridge.
The recent announcement that WestJet will be introducing daily flights to Lethbridge in March 2018 is incredibly positive news.
The airport is an important economic asset for Lethbridge and our surrounding region, and we continue to work with Lethbridge County – who own the airport – for ways to maintain its viability and enhance its functionality for airlines and passengers.
Determining an airport governance structure is a critical factor in accessing grant money to enhance the airport, so that's something we are working very hard on with our friends at Lethbridge County.
We've made excellent progress in the past year in establishing the Lethbridge Destination Management Organization as a new, single entity to promote tourism in Lethbridge.
I'm very pleased to be able to introduce the person recently hired to serve as the organization's executive director.
His name is William Slenders. (Ask William to stand).
There are lots of other positives to look forward to:
•Construction of Metis Trail and the twinning of Whoop-Up Drive will both be complete in 2018 and are already improving connectivity for new residential developments in west Lethbridge.
•This spring, we'll be putting the finishing touches on Legacy Park in north Lethbridge.
•A new Area Structure Plan for southeast Lethbridge is in place, and the developer is moving ahead with servicing for construction of a new public elementary school scheduled to open east of Fairmont in 2020.
Lethbridge's Competitive Advantage
When you compare the cost of land and development along with the cost of living for employees, Lethbridge is very competitive and is a great place to invest!
Changing Competitive Landscape
In the midst of this, we see the competitive landscape changing in Alberta.
It looks like Calgary is trying to step up their game in terms of economic development outside the oil and gas sector.
Calgary City Council recently increased their Economic Development Investment Fund to $100 million to enhance their ability to attract and retain companies, and support "catalytic" investments in the Calgary economy.
With 14.5 billion in sales in 2016, food manufacturing has overtaken refined petroleum as the largest manufacturing sector in Alberta
Alberta exports primary and processed agricultural and food products to over 150 countries
Food processing capacity
Food manufacturing is the largest manufacturing sector in Alberta.
In 2016, Alberta's food manufacturing sales were 23% of total manufacturing sales in the province.
Calgary is home to multinationals, medium-sized and niche food and beverage processing and manufacturing companies.
Global meat processors including Cargill, JBS, Harmony Beef and Sofina Foods have large operations in southern Alberta.
I would like to close by emphasizing that we all have a stake in the economic development of our city.
We have a great story to tell – Lethbridge is a competitive, affordable place to call home and a great place to open and operate a business, large or small.
I invite you to help me and all of us on City Council to sell Lethbridge!
On behalf of Lethbridge City Council – Thank you.