Wildfire, sluggish economy and fewer people: Fort McMurray faces 8% operating budget cut

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Wildfire, sluggish economy and fewer people: Fort McMurray faces 8% operating budget cut

A proposed revised operating budget for Fort McMurray and other communities in the Wood Buffalo region cuts funding by more than eight per cent.

The changes are due to a sluggish economy and shrinking population caused by last May's wildfire, finance officials say.

Regional Municipality of Wood Buffalo councillors will debate the proposed $468.7-million operating budget Friday.

The proposed budget reflects $41.8 million in cuts and savings compared to 2016's $510.5-million budget.

If approved as presented, the budget would be 8.2 per cent smaller than the 2016 operating budget.

Back in December, council approved a $391.8-million capital budget and a $137-million interim operational budget.

The interim operational budget only covered the first three months of 2017.

It bought the municipality time to present a revised budget that considered the new challenges the city faces dealing with an economic slowdown, a population reduction and May's wildfire.

The wildfire destroyed more than 2,400 homes and structures and prompted the evacuation of 90,000 residents from Fort McMurray and surrounding communities.

The municipality acknowledges the city's population has shrunk since the wildfire, although it hasn't conducted a municipal census.

The revised operational budget will be for the entire calendar year, Jan. 1 through Dec. 31.

Elsie Hutton, the regional municipality's chief financial officer, downplayed the reductions in the proposed budget.

Hutton said most of the cuts and savings came from reviewing, line by line, each department's spending. She said residents won't notice the reductions.

"From our own perspective we are not impacting core services," Hutton said.

"Looking at the economy right now, we are not poised for explosive growth."

Part of the savings will be realized by the elimination of 168 positions, announced by the municipality in January. The move saves the municipality $24.6 million in 2017.

Administrators also found $10 million in savings after the Wood Buffalo recovery task force, a wildfire sub-committee, revised its budget. The task force found it didn't need to spend as much on land rental and security services after the wildfire as it had initially budgeted.

Administrators have also proposed cutting $3.9 million in grants to community and charity groups, a reduction council directed in December 2016.

Councillors will debate and vote on the proposals at the special Friday night municipal council session.

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