Tuesday, March 31, 2009

Surviving the Budget Process Whirlwind

Except for the formalities of the final vote which will happen at the next council meeting on April 6, Council has finished with this year's budget process, setting a new speed record in the process.

We received our budget documents last Monday evening, March 23. The documents were available to the public on the city website at the same time. The public meeting to discuss the budget was on Thursday evening. Friday morning we started budget discussions at about 9 a.m., and finished at 12:45 p.m. This time included a half hour lunch break.

This is a budget of approximately $35 million dollars. It comes in two separate binders, one for capital expenditures and the other for operating expenditures. The paper in each binder is about two inches thick.

To meaningfully discuss and ask questions about that size of document in only a little over three hours is beyond my capabilities, especially since we had only three days to review it all. I thought that last year's process, when we spent a very long day in review was too rushed - in comparison, it was a leisurely stroll through the pages. This year any sort of discussion or questioning was cut off quite quickly.

I'm sure that many members of council hope that people will just focus on the fact that the tax rate increase will be 0%, the target that the mayor set in his State of the City address. After two successive years of 6% increases, plus the ongoing increases in water bills and sanitation fees, citizens deserve a tax break.

But how, with various expenditures already approved, and an increase to the police budget of 7%, far above inflation, did we accomplish this? And what is the real cost?

Well, part of it was done by the province, in its commitment to municipalities of a portion of the sales tax, as well as the one-time infrastructure funding that is headed our way. That's the good part. The other part of it was done by putting things off. Some future council will have to deal with the procrastination of this council.

What are some of these deferred expenditures? In the capital projects area, here are a few examples. An intersection upgrade for the proposed (but on hold) Home Depot, saved $150,000 by being postponed for a year. Not doing any sidewalk rehabilitation saved $200,000, also now targeted for 2010. Putting off parking lot rehabilitation for a year cut $50,000. The Arts Centre, where maintaining key building elements is a requirement of its Heritage Building status, is having some of its basic repair work deferred, for a savings of $32,000. The normal roofing repair budget of $200,000 has been slashed for this year to $14,000. A Zamboni already overdue for replacement and costing a fair amount in repairs is going to have to hang on for another year, to save us $100,000. Several police, fire and city vehicles well past their prime won't be replaced just yet. Bridge maintenance on the Diefenbaker Bridge is on hold for another couple of years, saving this budget more than $1 million - we hear a lot of talk about needing a second bridge, but apparently it's not a priority to do the basic maintenance on the one we have.

For many of these deferred expenditures, two things will happen. Structures such as sidewalks will degrade even further, so that eventual repairs will be more expensive. Delaying maintenance to buildings and roofs can cause more serious damage (and higher costs) in the long run. And future councils will have to make up for the delays of this council by asking for higher tax increases. I find that ironic, since some members of this current council have been pretty quick to blame previous councils, claiming that their lack of action is the reason for this council's budget increases. I hope that they're as quick to accept the blame in the future.

On the spending side, this budget has managed to find room for such non-essentials as golf course upgrades, new banners, and $48,000 for the Golf and Curling Club to have a party and host a tournament, in honour of its hundredth anniversary. To put it in perspective, that's more than we gave the SPCA last year to take care of abandoned animals. At least this year, one of the positive things in the budget is a $30,000 increase to the SPCA. Given the choice, I think that most taxpayers would rather fund the SPCA than a party for relatively few people who can probably afford to buy their own beer and meals.

The budget also puts $100,000 back into the fiscal stabilization reserve fund. This is a fund started by previous councils to ensure that money was available to deal with unexpected expenditures - extra snow-plowing in a bad winter, for example. When this money is available, we don't have to go into debt to pay for these little surprises that are hard to predict.

When this council took office, this fund had $1.2 million in it. This budget is the first time that this council has contributed to the fund rather than dipped into it - the current level, after two years of this council, is $239,804.61. At this rate of contribution, we'll get back up to the previous level in ten years, assuming, of course, that we don't dip into it again.

A final thought on this budget - this council will only have to deal with it for six months. In October, a new council will be elected, and they will be the ones to deal with any shortfalls this year. Hardly the kind of legacy that we should want to be leaving. But we didn't have time to discuss any of this - we were setting a record.

"Doing more things faster is not a substitute for doing the right things." - Stephen Covey

Friday, March 6, 2009

The Issue of Meals - Who Should Pay?

An article in the local paper this week followed up on a comment that I had raised in a previous posting, when I suggested that perhaps one way of reducing costs at City Hall would be to stop providing a meal to councillors and administrative staff during the break between our internal meeting, which starts at 4 p.m., and council meeting, which starts at 7 p.m. Thanks to the research of the reporter, who once again had to go through the hoops of Freedom of Information, we now know that the price of feeding us before council meetings is about $5,000 annually. Almost as much is spent on meals for committees and for meetings in the mayor’s office.

I’m not suggesting that this is a massive amount of money, in the full scheme of things. But I am an advocate of being able to justify and account for every thing that the city pays for, both big and small, and for not spending more than we have to, because it isn’t our money.

A couple of principles need to be established here. Is it appropriate for taxpayers to be paying for the meals of council, and of staff who are required, as part of their jobs, to attend council or committee meetings, or other meetings in the mayor’s office?

If it is, then we need to establish some policy and budgeting rules around when this happens. Right now, there is no budget line for these meals – I don’t know how the payment for meals for committees can be approved if there is no budget allocated to this expenditure. And there should be some guidelines for when meals are provided, and when they aren’t.

Checking out how other cities and governments do this might provide some guidance. My wife works for the provincial government – if she has to travel to a meeting, and is gone over certain times of the day, she gets a meal allowance. If she is attending a meeting in Prince Albert, which is her headquarters, she doesn’t. For example, a couple of weeks ago she had to attend training which was held in a hotel in Prince Albert. At lunch, some co-workers went to the hotel restaurant, and paid for their own meals. A couple of co-workers went home for lunch; a couple more went back to the office because they had brought their lunches from home. Those are the rules, and they have been communicated to everyone, along with the rationalization.

The practice of providing meals to council has been going on for as long as I’ve been a councillor, and no doubt long before that. Just because we’ve always done it that way doesn’t mean that we can’t review the practice, and decide if it is still the best way to go, particularly considering our tight financial situation. If we do decide that it’s still appropriate, let’s set out the ground rules and be open about why we’ve decided to continue to do this. That way, everyone, including the taxpayers who are footing the bill, will know what’s going on – once again, it’s part of being open and accountable.

"When more of the people’s sustenance is exacted through the form of taxation than is necessary to meet the just obligations of government and expenses of its economical administration, such exaction becomes ruthless extortion and a violation of the fundamental principles of a free government." – Grover Cleveland

Sunday, March 1, 2009

Just What Can $45,000 Worth of Cameras Do?

An item of note at last week's council meeting was the proposal that we spend $45,000 of general budget money to buy cameras to watch the Diefenbaker Bridge. The output from this camera would be watched by police, who would then, theoretically, be able to respond more quickly when an accident on the bridge occurred. Should this accident be one that blocks traffic completely, then the idea is that the police would be able to get there more quickly, and the disruption to the traffic flow would not last as long. In theory, this sounds like a good thing.

However, even when somebody tells me that something is a good thing, part of my job is to question, and to find out how much of a good thing it could be. When assessing a potential purchase using tax payers' money, I try to look at two things - how serious is the risk, and how much improvement to the current situation will be made.

How serious is the risk? Well, over the last ten years, the average number of times in a year that traffic is stopped on the bridge, is six. Once every second month. And this stoppage isn't always caused by an accident - sometimes it's material dropped off a load headed to the land fill that blocks traffic, sometimes it's been large buildings being moved across the bridge, and those responsible haven't bothered to get the required permit from police. New cameras will not help either of those situations.

And how much improvement will cameras bring to the situation? The improvement is so small, that I wonder how it could be measured. Improvement in police response time, if these cameras will be installed, is 0.1%. That means, that if the current police response time to an accident on the bridge is ten minutes (just an example for sake of argument), then the improvement would be 0.1% of ten minutes. With 600 seconds in ten minutes, the improvement would be .6 of a second - six-tenths of a second. If the current response time is less, then the improvement is correspondingly less. If I was waiting in a car stuck behind such an accident, I'm not sure that the difference would be perceptible.

And that is just for the police getting there. This will not clear the bridge any faster - police don't do that, tow trucks do. It won't remove the injured any faster - ambulances do that.

What happens when an accident occurs on the bridge now? Usually, someone on the scene uses a cell phone to call 911, who then call everyone who has to be there to help out the situation. More serious accidents, of course, take longer to clear up. Getting the police there less than a second quicker will not change this.

To me, it seemed only sensible that this expenditure isn't the best use of $45,000 of general budget money. If the police think that this expenditure is that important, why wasn't it part of their budget? (Although if it was, I still wouldn't think that it was a good use of tax payers' money.) And at last week's executive meeting, all those present agreed. However, when it came to council this week, although no additional information had been presented, and the facts remain as they were the week before, some councillors changed their minds, and the matter has now been approved by council and put into the budget.

In the total city budget, $45,000 is not a lot of money. But as I've said repeatedly, we have to look at every expenditure, large and small, and avoid spending any amount of money foolishly, because it's not our money that we're spending. And we have to look at the whole budget, not just bits and pieces ahead of time, because that just limits our options when it gets to the actual budgeting process.

I keep saying it, and hoping that at some point, I'll be heard.

I can accept failure, but I can't accept not trying." - Michael Jordan