Sunday, March 24, 2013

Really, I Don't Hate Flowers

At the end of our two days of budget review meetings, I asked where in the budget was the $40,000 that previous councils had allocated each year for the last six years for floral decorations. I was told that it was in the base budget – in other words, administration had assumed that past expenditures were to continue, without any kind of review, so had left it in there, while claiming that a 3.6% increase in the base budget was necessary. As I said in my previous post, this is a basic flaw in our budgeting process that we need to fix – we have to look at everywhere we’re currently spending money, and reduce where we can, as a first step in the budgeting process. The process has to include more than deciding how big the tax increase is going to be.

And then I finished by saying “I hate those flowers,” a quote that the local media was quick to pick up on.

Of course, I don’t hate flowers. What I hate is what that expenditure symbolizes to me – style over substance, image over content, wants over needs. Those often seemed to be the priorities of council for the past six years, and that’s part of the reason why we’re in such a difficult situation now, as we try to figure out a way, not just of keeping up with basic maintenance needs, but of making up for lost opportunities and higher costs due to past neglect and deferrals – of choosing style over substance.

So when the contract for floral decorations came up at Monday’s Executive Meeting, I took the opportunity to clarify my concerns. I started by saying that I’ve joined a 12-step program for flower haters, but then I made the serious pitch that we should not go forward with this contract, which isn’t even with a local company. I know that some might view the $40,000 as a pittance, but over the past six years, that single pittance has added up to $240,000 – money that could have been used for more permanent improvements or repairs. The flowers are a transient thing, lasting, at best, five months, with benefits that are impossible to quantify.

Other communities have found ways to beautify their cities without spending a heap of taxpayers’ money to do it. I understand that Moose Jaw has a voluntary program, and I’ve mentioned before the Heritage Gardener program in Andrea’s home town of North Bay, Ontario, where the entire waterfront – several kilometers of walkways and bike paths reclaimed from former rail yards – has flower beds on both sides of the paths put in and maintained by groups of volunteers, with the city only providing water connections at various points. I think that even the T-shirts provided to volunteers (my mother-in-law was one) were sponsored by an outside company. Ingrid lives in the Riversdale area of Saskatoon, and even her lower-income neighbourhood has public planters and rosebushes maintained by residents.  These are the sorts of initiatives that I think could work here, but which we haven’t looked into.

It’s important to remember that there are hidden costs over and above the $40,000 as well. The contractor may have provided the materials for the barrels of petunias that were set out in military precision in front of City Hall every year, but it was city crews that had to spend time setting out the barrels every May, and removing them every September. These costs don’t appear as a line item in the budget, but it’s time that those crews could have spent elsewhere, to greater effect.

When the base budget was first posted, we were told that it was made up only of labour costs. It turns out that’s not exactly the case.  There's a whole lot of stuff in the base budget beyond labour costs - snow- plowing, street sweeping, fleet vehicle maintenance, grass cutting, building operating costs are just some examples of costs that are in the base budget.  These examples would be considered essential, of course, although it is up to council, not administration, to determine the level at which these things are done.

The base budget also includes more non-essentials than just the flowers.  For instance, advertising costs are in there - a total of $235,000.  I wouldn't propose cutting the entire advertising budget, because of course we need to advertise things like tenders, hiring opportunities and things like the election information piece that went to every residence last fall, but some things, like the infomercials on local radio that the last council paid about $70,000 annually for, aren't necessary for the city to function, and I would propose cutting those.

Also funded through the base budget are facilities such as the golf course, the soccer centre, the Art Hauser Centre and the Rawlinson Centre.  Rather than just automatically funding these facilities at current levels, I don't see why we can't set targets for these facilities to reduce their budgets.  After all, they're already getting free water, sanitation, advertising and floral decorations.  If we expect city residents to tighten their belts so that they can pay higher taxes, we should expect no less from those who benefit from these higher taxes.

We need to change our whole attitude towards budgeting. And part of that attitude has to include the recognition that everyone involved, both council and administration, has to look at all our costs – big and small – to be able to separate the non-essentials from the essentials, the wants from the needs, the nice-to-haves from the must-haves. As I said earlier, several years of confusing these things has led to the current situation, and we need to act decisively to start to swing things the other way.

And if that means looking at the flowers as a starting point, then let’s do that.

"Where have all the flowers gone?" - Pete Seeger

Sunday, March 17, 2013

Budget Meeting Thoughts

Council spent all day Friday and Saturday, from nine in the morning until five in the afternoon both days, going through the budget line by line. We went through two thick binders of budget material - one for capital expenditures, which includes things like equipment purchases, and the other for general operating expenditures, which includes things like labour costs and contracts.

Unlike in previous years, when we would set aside two days for this work, but then rush through things in one day, taking things in chunks, we had lots of good open discussion about specific items, and there were no sacred cows in what we were reviewing.  Two long days, but I think that those who have been involved before found it a better and more rewarding process.

That's not to say that the process couldn't be made better.  We weren't actually reviewing the whole budget - administration had already posted the base budget, and we didn't have the opportunity to review the line items in that budget, and find ways of cutting costs there.  The base budget is much more than staff wages, as   I found out when I went looking in the binders for the $40,000 that we spend every year on floral decorations - that's still in the base budget, and it's an item that I think could be reduced, but it wasn't part of our discussions.

I'd also like the opportunity to go through the base budget because that's where costs like snow removal and street sweeping are.  The general operations budget often speaks to adding funds to those items, but without being able to see what current costs are, it's hard to evaluate whether the proposed additional costs are reasonable.

Assuming that current expenditures will remain as they are is an assumption that we can't afford.  We have to look at finding efficiencies in how and where we're currently spending, because, unfortunately, we can't afford everything on everyone's wish list.  We have to be very careful to distinguish between wants and needs, something that the previous council didn't do very well.

Spending from specific reserves also needs to be scrutinized more closely.  We tend to pass these without much discussion, since the money is there, in a reserve.  But we can't forget that this money came from the tax payer, and needs to be spent just as wisely as the taxes that we're proposing to collect this year.

The service review that we had in early March was a good start, but unfortunately it didn't affect anything in this year's budget.  I think that next year we should do the service review earlier, then use that to give administration budget direction - maybe something like reduce costs for a specific area by a certain percentage.  I would also recommend against putting out preliminary numbers on what the tax increase will be.  The base budget made public a few weeks ago stated that a 3.6 % tax increase would be necessary just to keep pace with wages, but it also assumed the status quo on all expenditures in the base budget, and left out the fact that council had yet to review the capital and general operating budgets.

By next year's budget, we also should have made decisions on how we will deal with all of the buildings that the city currently owns, and have utility and sanitation costs included for all departments and facilities.  We will then be able to factor these costs in when setting user fees, which should reduce the burden on the tax payer.  I would also suggest that all facilities should be required to establish reserve funds in their budgets, so that future capital expenditures are more manageable.

So what's next in the budget process?  Administration now has the job of putting forward various options for proportional and flat tax increases, in various combinations, which will then come back to council for further discussions.

It's a long process, and particularly for those newcomers to council, I'm sure it's overwhelming at times.  And the decisions are not easy.   But line by line, item by item, we're doing the job that we've been elected to do - keeping that in mind makes the decisions easier.

"It's clearly a budget.  It's got a lot of numbers in it." - George W. Bush

Saturday, March 9, 2013

Service Review - A Welcome First Step in the Budget Process

This year's budget process is turning out to be much more open and thoughtful than it's been the last few years, which is a welcome change.

City staff have prepared a draft budget, which is posted on the city web-site.  This is basically just the status quo, based on past years' budgets.  It indicates a 3.6 per cent increase, presumably for wage increases.  However, council hasn't even started looking at this document.

Our first step, in meetings held this past Thursday afternoon and evening, and all day Friday, was a service review.  We looked at current services provided by the city, and asked questions of administration and department heads about where possible savings could be found through operational efficiencies.  We also talked about where cuts could be made in certain programs - a line of discussion that certainly hasn't been encouraged in the past.  I think that it speaks well of the current council that we have realized that an important step in establishing a budget is looking first at where the money is going, and finding efficiencies there, rather than assuming that setting tax increases is the only way of dealing with city problems.

And there seem to be no sacred cows any more - our discussions covered the full range of where city money is spent, and we seem to be prepared to look at everything in detail in the hopes of saving money.  This too is a huge change in perspective, and one that I have been advocating for some time.

We're also looking at areas that have been neglected in past budgets - street maintenance is probably the most notable area that has been underfunded for several years, and the current state of our streets is a sad testament to the results of this sort of neglect.  I'm hopeful that this year's budget will start to reverse this trend - the longer we put things off, the more expensive the repairs will be.  I've also asked that the current state of city trees be reviewed - the windstorms of the past two summers have shown the extensive damage and resulting costs that occur when we don't manage our urban forests.

At next Monday's council meeting, we will hear from some of the groups that get funding from the city, with their positions on funding that they need for the upcoming year.  It's also an opportunity for the public to comment on the draft budget.  While I'll admit that going through the budget line by line isn't the most fun way to spend an evening, it is eye-opening to see the choices and decisions that have to be made, and if you have concerns about how council decides to allocate your taxes, this is your opportunity to let us know your thoughts.

And once we've received the input, then hard decisions will have to be made.  I'm hopeful that the current atmosphere of openness and respectful discussion will continue, and that the resulting budget will be one that all members of council can support.

"A budget tells us what we can't afford, but it doesn't keep us from buying it."  William Feather

Saturday, March 2, 2013

A Few Things that You May Not Know About the New Utility Rates

At the last council meeting, a bare majority of council members (5-4) voted to increase your utility rates every year for the next four years.  This was in spite of a motion that I put forward that we only set the new rates for one year, which would give us the opportunity to rethink things next year.

I voted against the proposed increase for a number of reasons. While I recognize the importance of maintaining the infrastructure that provides one of life's basic requirements, I don't believe that council, or the public, was provided with enough information about the proposed new rates, or what other options might have been.  From the information that we have been given, it appears as though residential users will be getting a higher proportional increase than commercial users, and that those residential users who use less water will be getting a higher proportional increase than those who use more water, and both of those things strike me as being unfair.

Once again, it seems as though the impatience of some members of council to make decisions before having as much pertinent information as possible has trumped the importance of knowing exactly what it is that the citizens of Prince Albert are going to have to deal with.

Publicly, the message from administration is that this is an increase of 10.4 per cent for the average residential user.  I asked for a breakdown on how this would affect high, medium and low residential users, and from the information that I was provided, it appears that the 10.4 per cent increase only applies if you're what is considered a high user - 2500 cubic feet per quarter.  If you fall into the moderate user area, 1800 cubic feet (which is where my water bill puts our family), the increase in the first year is actually 11.8 per cent.  And if you're what is considered to be a low user, 1200 cubic feet, your increase in the first year will be 13.6 per cent.

And who are the low users?  They would be those households of one or two people, often seniors living on fixed incomes, who will be facing the largest proportional impact on their utility bills.  And for those who have worked to reduce their water consumption - those who have invested in more efficient shower heads and low-use toilets, or who collect rain water for their gardens rather than using the hose - well, they probably did it because they're interested in the environment, but they won't be getting any financial thanks from the city for their efforts, that's for sure.

I would have been much more comfortable with this if the information provided had laid out the whole spectrum of changes, rather than just focusing on the 10.4 per cent.  To me, that's being misleading, by giving only the least of the increases, rather than all of them.

The other confusing part to me, that has yet to be explained clearly, is the difference between the increase for residential and commercial users.  The 10.4 per cent increase for residential users would appear to be quite a bit more than the 4.66 per cent increase that commercial users will be paying.   However, the city manager has said that the two increases are the same, but he has yet to provide us with his reasoning for how 10.4 per cent equals 4.66 per cent (let alone how 13.6 per cent equals 4.66 per cent).

Part of the problem is that your utility bill covers far more than just your water usage - you're paying for infrastructure maintenance and repair, as well as for garbage pick-up, both of which are unrelated to your water use, and you're also paying for a portion of the costs of city administration.  Once again, these are all necessary costs, but I would prefer that they are dealt with as part of the overall taxation process, rather than being hidden as part of your utility bill.

I also don't understand why water billing can't be done monthly, as most other household bills are.  I've raised this in the past, and been told by administration that it would be too expensive, but, as with many other things, the reasons why this can't be done haven't been explained.

I've had a few phone calls and conversations with people saying that they don't understand the logic behind the proposed increases, and I haven't been able to provide them with much information.  To me, that's a clear sign that we're not ready to move forward with these changes, and until we can explain clearly how people will be affected, we shouldn't be rushing to the first solution offered by administration.

"Figures can lie, and liars do figure." - Anonymous