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

Sunday, October 5, 2014

Why I Think We Need to Change Executive Committee Meetings

We've had some informal discussion among members of council about possible changes to what we do in Executive Committee meetings, which are held on alternate Mondays from Council Meetings.  While no decisions have been made, I thought that it might be helpful if I were to explain why some of us are thinking that the current format needs to change.

First, Executive Committee hasn't been in place since time immemorial.  Well before my time on council started, council meetings were held weekly.  Council of the day decided that meetings could be held every other week, since much of the preparatory work that was done for council was done in committees.  These committees were made up of various combinations of members of council, and included such committees as finance, parks and recreation, and public works.

This was the practice during my first term on council, and into the second term.  During that second term, we hired a new city manager, who suggested that we could get rid of the committees, and have the matters that were handled by those committees dealt with by all members of council, in what became Executive Committee meeting on alternate Mondays.  For those of us who were on several committees of council, it meant fewer meetings.  It also meant that everybody got to have input on all city matters, rather than having, for example, only a few councillors on the finance committee.

However, with the next mayor and council, and a different city manager, Executive Committee became more of a rehearsal for the actual council meeting, where final decisions are made.  It also became an opportunity for matters to be fully discussed at Executive Committee meetings, which aren't televised, so that the actual vote the following week was rushed through without much public discussion.  In essence, we were meeting twice on the same subjects.

I'm not afraid of work, but I do like my time to be used well, so I've been advocating for a change in Executive Committee for awhile now.  And now, halfway through the term of this council, others are starting to be willing to explore options.

I've been suggesting that Executive Committee use that meeting time for two purposes.  The first would be to have more detailed discussions with staff about new proposals that they are bringing forward, in a less formal setting.  Too often when we ask questions at these meetings, we don't have the time to delve fully into the necessary information, so Executive Committee meetings would be the opportunity for that.  It will mean that staff will have to come prepared for such deeper discussions, and that councillors will have to use the opportunity to ask meaningful questions, not make political points.

I would also suggest that we could use these meetings to vote on items that have previously been discussed, such as projects that have already received budget approval.  That would leave more time at formal Council Meetings to focus our public discussions and decisions on items that haven't yet been approved.

I'm not proposing eliminating Executive Committee meetings, which will be a relief to those who are under the misconception that councillors are paid by the meeting.  I am proposing that when we meet, we should be as productive as possible.

There are those who regard any change as suspicious.  However, I'm a believer that continual improvement means looking at all our processes, and not being afraid to try something new, in the interests of doing things better.  After all, procedural changes, which is all that this would be, are relatively easy to make, and don't cost a lot of money - low risk all round.

"Change is inevitable - except from a vending machine." - Robert C. Gallagher