Sunday, December 14, 2014

Putting the Budget To Bed

The budget passed at last Monday's council meeting, and for the first time in nine years I was able to support it.  Not that it's a perfect budget - there's plenty of room for improvement in both the process and the result, but I think that some changes were made in the right direction that were worthy of support.

For me, one of the major improvements was the adjustment to the roads improvement levy for the commercial sector.  I think that our approach to the commercial sector is too disconnected - perhaps because, unlike residents, businesses don't vote.  The way the roads levy was originally set for the commercial sector, small businesses paid $700 annually, and large businesses $7,000.  You don't have to be a financial expert to know that a small business might not clear $700 in a day, whereas a large business like WalMart clears $7000 easily before noon.  It's a demonstration of the inherent unfairness of flat taxes, and we've taken steps to start to correct that unfairness.

The small business levy has been reduced, and there are more increments as the size of business increases, rather than the three levels that there were before.  Personally, I believe that the way to go with the levy for both businesses and residents is to assess the way taxes were traditionally done - at least this is a step in the right direction.

The Pineview Terrace levy is gone, and the soccer centre levy should end at some point this year.  Unfortunately, we didn't discuss the options for dealing with both of these - I know that some members of council have suggested that we continue the soccer centre levy as a reserve for future capital projects, but it remains to be seen what will happen with this levy.  Personally, I'm not happy with leaving this loose end, but some of my colleagues thought that two days of budget deliberations was quite enough.  I know that it's tiring, but that's how the job works.

In any event, we have a relatively small tax increase of 2 per cent, and small businesses and those residents whose home has a lower assessed value should even see a small decrease - always welcome news to the tax payer.

So what changes to the process would I like to see for next year?   Well, as I've already mentioned, more work needs to be done on the commercial side, to deal with the inequities that remain.  We need to remember that small businesses are the ones that are owned by local residents - the profits tend to remain in the city, and we need to encourage this sector.  I'd like to see the other flat tax, the $60 one, clearly ear-marked for snow removal, and set according to what is actually required.  Last year, we said that half of it would go to snow removal, with the remainder left for undisclosed purposes - if we have to have a flat tax, let's at least dedicate it to a definite purpose, and set it accordingly.

I also expect administration to look at organization and staffing.  It seems that we're continually asked to increase staff levels, even though the city population isn't increasing at the same rate.  I would rather see the city manager focus on ensuring that staff are organized efficiently, and that when a position is vacated, for whatever reason, a case is made for the continued need for that position, rather than just filling it automatically.  Administration has to get on side with the idea of continual improvement - too often I get the sense that status quo is quite all right with many of them, even as the world is changing all around us.

But, as I said, this year there were many improvements in the process.  I hope to see as many next year, so that I can again support both the process and the result.

"Budget - a mathematical confirmation of your suspicions." - A.A. Latimer 

Sunday, December 7, 2014

Committee Appointments, the Democratic Way

Last week's Executive Committee meeting was the time when new committee appointments were decided.  As we're mid-way through the current term of council, it seemed a good time to take stock, and see if changes were appropriate.

Committees are different from when I was first on council.  Committees of that time, like Finance, or Works and Planning, which used to meet separately and then make recommendations to council, have been replaced by Executive Committee, so that matters now come directly to council.  And some committees that were in place at the time of the last election, like the Beautification Committee, were determined to be redundant, so no longer exist.  Many of the committees are not committees of council, but rather are external committees that have city representatives.  I don't think that there's any perfect committee structure, so it's good that the city has control, for the most part, over how committees are set up and their membership.

This council does committee appointments quite differently than the previous council.  Rather than the mayor making all the decisions, and handing out committee appointments like favours, this council has a two step process.  First, each member of council decides which committees they would be interested in being on - there's not much point in putting someone on a committee if they're not interested in being there.  Then, council as a whole votes on which councillor will be on which committee - it doesn't get more democratic than that.

The result this time, for me, is a bit of a change.  I remain on the Police Commission, and now represent council on the Downtown Business Improvement District committee.  Since my ward borders the downtown, and Laura at the Bison often teases me that I'm there so much it's my unofficial office, I'm looking forward to working with downtown businesses on revitalization ideas.  And I have a feeling that I'll continue to go to Saskatoon Airport Authority meetings, representing the mayor, who often has conflicting demands on his time.

In my time on council, I've been on most committees.  I think that, to be valuable, a committee has to do more than meet - it has to set priorities, and work towards making sensible recommendations for council to act on.  I get the feeling from some of my colleagues that they see some committees as having some sort of higher status, but I don't buy into that kind of thinking - like many status-related things, the glory is mostly in individual's minds.  The public is rarely aware of who is on which committee, or in what each committee is responsible for.  Committees are mostly in the background, discussing issues and sorting through information, but making final decisions remains a council responsibility.

Committees do provide valuable input, but it's best to keep the system flexible - don't have committees that duplicate work already being done elsewhere, don't meet unless there's something to discuss, and don't be afraid to disband committees that aren't doing anything - as long as council follows these guidelines, we won't be so overburdened with committees that we forget our real responsibilities.

"To get something done, a committee should consist of no more than three people, two of whom are absent." - Robert Copeland

Sunday, November 30, 2014

The New Contract to Run the Rawlinson Centre - What's the Problem?

Council approved the new contract with Star Entertainment to run the Rawlinson Centre at the council meeting last Monday evening.  This is the first year that we've contracted directly with Star Entertainment - in previous years the Arts Board was responsible for the contract, resulting in problems like financial statements not being submitted, and money from reserves being spent without prior approval from Council.  In the interests of improving transparency, council has taken over the responsibility.  Unfortunately, we haven't done a very good job.

The contract total for the next year is $395,000, an increase over last year's number.  That's a lot of money, and was high enough that three members of council voted against it, me among them.

But the underlying problem with this contract is that is was handled differently from our other contract processes.  Normally for a large contract like this, the city would tender it out, or do a request for proposals.  That would give us an idea of the fair market value - what is reasonable for running a venue of that size.

However, for some reason, most of council felt that it was okay to just give the contract to the company that's been running the venue for the last ten years, taking an ever-increasing part of the city budget every year.  Not only that, but we increased the size of the contract, for no apparent reason, other than that there was no raise last year.  A couple of council members even said that they like the individual involved, and that was good enough for them, indicating that they missed the class where we learned that when it's not your personal money you're spending, liking shouldn't enter into the decision-making process.

Another option would have been for administration to do some research - find out what similar facilities in other cities cost - so that we would know if we're in the ball park.  If that research was done, it wasn't shared with council.

And while having a written contract is an improvement over the years when there was nothing in writing, a contract should include a few milestones and deliverables, setting some targets and expectations.  And no, the single statement of "running the facility" does not meet my idea of a deliverable.

We missed the opportunity to make the situation better.  If we had tendered it out, perhaps the result would have been the same - maybe almost $400,000 is the going rate.  If that were the case, and if there were some hard deliverables in the contract, setting out targets that need to be met before payments are made, then I might have been able to support this.  But we chose to take the lazy way out, for whatever reason.

And interestingly, there hasn't been a single word about this in the local paper.  That they chose to put council's support of a provincial helmet law on the front page of Tuesday's paper (one of those feel good motions that costs us nothing), rather than this topic certainly raises some questions about what is considered news in this town.

I'm still reminded regularly by city residents that this facility was built with the promise that it wouldn't cost tax payers a cent - the fact that it takes an increasing amount of money every year is a recurring irritant to many people, who rightly think that council should try to fix the situation. That we couldn't even be bothered to follow regular procedures before making the decision to carry on with the old contract just adds insult to injury.

"A verbal contract isn't worth the paper it's printed on." - Sam Goldwyn

Sunday, November 23, 2014

This Year's Budget Process - Getting Better, Incrementally

Well, we're most of the way through this year's budget process, planning our spending for next year.  Our timing for the public review piece wasn't the best, happening the evening before Remembrance Day - never a good idea to have public meetings the night before a holiday.  Then we had our meetings to go through the budget page by page on the Friday and Saturday of the same week.

This is the first time in my experience that we're this far through the process before the end of the calendar year.  Despite the earliness, the budget documents provided were still more detailed than they have been in the past, which makes for better decision-making.  And getting the process done so early means that the initial tax notices that go out, usually containing an estimate of tax due, will now be final, so that those who prepay before the end of January to take advantage of the slight discount won't have to pay the remainder of their bill in June.

I also found that there was a bit more give and take in the process.  Just because a number had been put in the budget by administration didn't mean that we didn't make changes based on our discussions, which is how it should be.  For example, administration had put in $60,000 for floral decorations.  After some discussion, we knocked $20,000 off that - still higher than I think it should be, but at least it's one-third lower.  I still don't get why some feel that it's good use of taxpayers' money to spend it on something that only lasts for four months of the year, and that has no measurable benefit.  I'd have an easier time adding that money to the fix the waterslides fund - at least that benefits people directly, if for a shorter season.  But in any case, we did discuss the expenditure, and it's not as high as it could have been.

But there is still plenty of room for improvement in the process.  I would like to know why we can't have a standardized format from year to year - every year the information is presented differently, and we have to figure out where things are before getting a handle on what is being proposed.  I would also like to see all of the relevant information in the requests from outside agencies, rather than having to pull information about grants and revenues from a separate document to compare them to the amount of money that is being requested.  As anyone who has browsed through the various budget documents knows, it's a huge amount of paper to wade through and keep organized as discussions progress - any consolidation of information would be welcome.

Another thing that we found out in our meetings was that often, money in previous years has been set aside for capital improvements, but not spent.  If we were to truly adopt zero-based budgeting, then unspent money would be added to money available.  Had we known last year, for example, that money had been set aside in previous years for improvements to Kinsmen Park, but not spent, I would have had no difficulty in moving that money towards waterslide repair.  It would also mean that various departments would have to get better at matching what they can realistically do in a year with their budget requests, to prevent going to the taxpayer before we have to.

We still haven't had the discussion about the final piece - the various flat taxes and levies that have been applied over the years.  Two levies are done this year - the Pineview Terrace levy and the levy for the soccer centre, so we'll have to decide whether to continue these on under different names.  There have been suggestions that the Pineview Terrace levy could be put into a reserve for future health-related expenses.  And I've heard suggestions that the soccer centre levy could continue, to be used as a recreational reserve - we've all heard the requests for a new swimming pool, or a new arena, or $2 million for irrigation for the golf course.

I don't support flat taxes, as I've mentioned before, because they put a larger proportional hit on lower and middle income people - which is most of us.  The soccer centre levy was there before  - called the debt reduction levy - and I have no problem with putting money into reserves, as long as it isn't used to balance the budget after sloppy budget development, as has happened in the past.  But I'm not interested in funding special projects for a relatively small proportion of residents, and figuring out how to pay ongoing costs for new facilities needs to be done before, not after, the construction money has been raised.

So stay tuned - even though the formal budget meetings are done, we still have more to talk about before the final numbers are known.

"Money is better than poverty, if only for financial reasons." - Woody Allen

Sunday, November 9, 2014

Zoning Changes - We Need a Better Process

You've probably heard Albert Einstein's definition of insanity - doing the same thing over and over, but expecting different results.  One of the agenda items for Monday's council meeting reminds me of that - a zoning change has come before council, after following the usual process for consultation (send letters to residents living within a certain radius about the proposed change), and council chambers will be packed with residents demanding that we turn down this change.  And I won't be surprised if most council members bend to the will of the non-elected people in the room, and follow their wishes.  Applause will follow, the press will dutifully quote happy residents, who will laud those councillors that followed their wishes for understanding how democracy works, and disparage those councillors who had the temerity to make a different decision.

The zoning change in question?  A group home for five young girls is being proposed for a residence on Mahon Drive.  The young girls in question have not been in trouble with the law, but rather are in situations where they cannot live with their families, and are between the ages of thirteen and eighteen - high school girls.  At least one staff member is on site at all times, with two present in the evenings.

I've been receiving phone calls and emails about this since before it came to council.  The surface reason that is being presented is that such a home will be a traffic hazard, and there will be insufficient parking.  Never one to believe everything that people tell me, particularly when they are trying to tell me how I should vote, I went to check the area out.  The neighbourhood is relatively new - every house, including the one being proposed for the home, has a two car garage with a wide driveway.  Sufficient parking, especially for a home in which most of the residents will not have their own vehicles.  In fact, I would bet that most of the current homes have more vehicles than this residence would.  The street itself is not a major thoroughfare, but is a quiet crescent.  The police tell me that it is not an area with a history of traffic accidents.

I get the feeling that residents are talking about parking and traffic safety because those are socially acceptable concerns - they don't want to be accused of being one of the Not In My Back Yard types.  And when they hear the words "group home", they make the leap to half-way house, because they haven't been told anything else - they've been sent a letter - the least efficient form of communication.

I find these meetings where residents crowd council chambers to be an extremely poor way of discussing the issue, because absolutely no discussion takes place.  People with their minds already made up come to tell us what we should do, and either openly or implicitly suggest that if we don't vote their way, they won't vote our way in the next election.  The proponents also have the chance to present, but again, it's not an opportunity for discussion.  And council becomes the awkward guy in the middle, trying to sort out reality from rumour.

The insanity part comes in because this is how we deal with zoning changes - not productive, creates divisions on council and in the community, and decisions are made based on emotion, not fact.  And it's been this way the whole time that I've been on council - people have learned that the best way to get council on side for any proposed change is not to present with solid facts and arguments, but rather, fill council chambers with emotional people, either pro or con.

So, how would I do this differently?  Well, I think that when a proposal comes to administration that is going to require a zoning change, I would require that the proponent hold a public meeting to present their idea to the neighbourhood, well before it comes to council.  And this wouldn't just be for people within a certain radius; it should be widely advertised, so that anyone in the city, as well as members of council, could attend and ask questions.  That's the kind of venue where questions can be asked and answered, and potential issues could either be defused, or ameliorated.  If it was made clear at these meetings just how many extra vehicles were going to be in the neighbourhood, for example, then the argument that there won't be sufficient parking wouldn't be considered more than a red herring.

That way council could make its decision based on hard facts, questions would have been asked and answered, directly to and from the proponents, and council would get out of this middleman position that we've put ourselves into.  In fact, we'd be able to look at things from the perspective of how a change would affect the community as a whole, not just look at it from the viewpoint of a few residents.

And the emotion wouldn't detract from what should be our focus on Monday - public input on the draft budget, which is coming after the council meeting.  Now that's where we should be spending our time - listening to ideas about the budget, not listening to people who are worried about potential new neighbours.

"Somehow, our devils are never quite what we expect when we meet them face to face." - Nelson DeMille

Sunday, October 26, 2014

The Bus Subsidy Dilemma

At last week's Executive Committee meeting, the subject of increasing the city's subsidy of bus passes for those on social assistance came up.  One of the problems that I have with Executive Committee meetings as they are currently structured is that we vote on things, the vote is not binding, but it tends to get reported in the media as though it is, causing public outcry as though the decision has been made.  But actually, the final vote will be at the Council meeting this week, and things could always change.

The issue is that the price for the subsidized pass, $15 a month, hasn't increased since 2008, so the proposed increase of $5 a month is making up for six years of increased costs.  It's still a very good deal - $20 for unlimited bus service for a month, but it is also a 25% increase.  The dollar number may seem low, but the percentage increase is more than, for example, the recent rate increase for using city facilities.

I would like more information about the current subsidized usage - how many people take advantage of this opportunity?  Are passes transferable, or is there photo ID on them that limits the usage to one person?  How often does a pass holder use the pass in a month?  If it's only a couple of times, perhaps it would be cheaper for Social Services to provide single use tickets, rather than a pass.

I wish that we had a standard practice for dealing with costs like subsidies and user rates.  I think that it would be preferable to have such things reviewed and increased on an annual basis, rather than our current practice of dealing with increases sporadically.  For one thing, it means that the increases, when they happen, tend to be larger than current inflation rates because we're trying to make up for increased costs over a longer time frame, which is upsetting to people.  For another thing, it means that we're running at a deficit, instead of making sure that rates are adjusted as costs go up.  For sure, the increases to fuel costs alone over the last six years are greater than the proposed $5 increase.

I also wish that other members of council would recognize the incongruity of resisting these increases, but also resisting tax increases.  Someone has to pay for increased costs, and it's going to be either the user or the tax payer.  It's also incongruous to hear some councillors objecting to a bus subsidy increase, because it affects lower income people, but on the other hand supporting flat taxes, which shift more of the tax burden to mid- and lower income residents.

I also wish that the provincial government provided money for public transit, as is the case in other provinces.  I think that encouraging the use of public transit is a broad public good, resulting in less wear and tear on infrastructure, fewer traffic and parking issues, and reduced environmental impact, and it should be directly supported by all levels of government.

As so often happens, there are more questions than answers when we're asked to make a decision, and it's not a simple issue.  The bottom line is that costs for everything go up, and we need to have a consistent approach that recognizes this, and is applied as fairly as possible to all residents.  Of course, getting to such an approach isn't simple either, but I need that we think to look at our problems from this perspective, rather than looking at each problem in isolation - that only seems to lead to inconsistency.

"Giving subsidies is a two-edged sword.  Once given, it's very hard to take a subsidy away." Najib Razak

Sunday, October 19, 2014

User Rate Increases - A Step in the Right Direction, But Not Far Enough

Council has approved fee rate increases for our facilities, except for the golf course, for the coming year, although as always there are those who worry that people will be upset by having to pay marginally more to use city facilities.

I don't share those fears - I think that most people understand that when costs rise, whether for staff or fuel or heating, those cost increases affect how much it costs the city, and those who use city facilities need to pay a share of those costs.

But I did vote against the proposed increase, because I don't think that user fees, as currently calculated, don't include all the true costs of these facilities.

Our target for user fees is that they should cover about 40% of the costs of running the facility, recognizing that a certain proportion of subsidization is reasonable, because having these facilities is a benefit to the city as a whole, not just to those people who actually walk through the doors of the facilities.  Unfortunately, the way this is currently calculated does not include factoring in the costs for long-term maintenance of these facilities, nor does it recognize that different facilities probably have different user costs, but we just do a flat across the board rate increase, and hope that will be sufficient for all.

It's kind of like thinking you can afford a house because you can manage the monthly mortgage payments, but forgetting to budget for such inevitable expenses as a new roof, furnace replacement, new appliances, or painting the wood trim.  A sensible household budget includes setting aside money for such things, so that your budget doesn't run aground when these expenses come up, either as planned expenditures, or in an emergency situation, like if your fridge dies suddenly.

The way it happens now, user fees don't include setting something aside for inevitable costs of maintenance or repair, so the taxpayer ends up having to foot the entire bill for those costs.  If we did have a maintenance reserve fund set up, perhaps we wouldn't have had to keep the waterslides closed this year - we could have funded ongoing maintenance out of a reserve developed by a budgeted piece of the user fee.

The only facility that is an exception to this is the Rawlinson Centre, where one dollar of every ticket sold is put into a reserve intended for capital improvements, such as upgrading the sound system.  Unfortunately, this reserve wasn't kept for its intended purpose, but was used instead to balance the budget, but hopefully with more open financial operations for that facility, this won't happen again.

But it's a good indication of how simple the process can be.  If you can calculate what an appropriate reserve should be for major maintenance expenditures on all our facilities, a flat rate could be added to each ticket from every facility, with a reserve set up that could be used for all facilities.  Another option, although not quite a simple, would be to calculate a sensible reserve for each facility, and figure out what the appropriate surcharge would be on the user fee for that facility.  That method would probably assess the users more fairly, but would be more complicated to administer, which also translates into additional costs for staffing.

I really don't care which method is followed - I just want to see us start thinking more about long-term maintenance of our facilities, and avoid the kind of difficult decisions that have to be made when the cost of fixing is beyond our budget, as happened last spring.

The other anomaly that I would like to avoid in future is this practice of determining user fees before we do the budget.  To me, making financial decisions before the budget process is very much putting the cart before the horse, and it limits our flexibility at budget time.  If during the budget process we find that costs for a certain facility are projected to be greater next year, we've missed our opportunity to add that to the user fee calculation, since I'm quite sure that most members of council won't want to revisit this particular discussion again within the same year.

But I know that change happens in stages.  I'll be happy if next year, administration brings us proposed user fees that include long-term costs, not just the short-term.  I would have no problem in agreeing to that kind of proposal.

"A budget is just a method of worrying before you spend your money, as well as afterward." - Unknown