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Thursday, February 17, 2011

Reflections on Budget 2011

Kudos to Mayor Fontana and the councillors: they concluded the 2011 budget deliberations with a final figure that is slightly lower than the 2010 budget.

This was virtually assured when staff suggested that, given the council commitment to no increases and no cuts to services, all the assessment growth valued at about $6M be used to reduce the tax levy. That, together with the modest wage settlements and wage freezes for city employees, delays in hiring, and some modest cuts from the budgets of agencies, board and commissions, allowed the city to avoid increasing the tax levy.

The Mayor started off the proceedings with some long overdue recognition of the hard work of the administration. This was followed by special recognition of the contribution of Ward 6 Councillor Nancy Branscombe for her work on the Services Review Committee during the previous council term. This was the person he had previously tried to keep off the Finance and Administration Committee in favour of Ward 4 Councillor Steve Orser.

Confident that his campaign promise of a tax freeze would be achieved, the Mayor was in a jovial mood, cajoling those who seem to be combative and assuring them that by evening’s end they would all be singing Kumbaya. A few actually did. At least, a few bars. And Kumbaya or not, when it was over the council was unanimous in voting for the finished product, a first for a long time. Paul VanMeerbergen who was elected in 2003 voted yes for the first time ever.

So what was different this time?

First, without a Board of Control, the process took much less time. Meetings were cut by half and all the members were fully participant in all of the proceedings and debate. Although there were differences of opinion in what to reduce and what to augment, no one was affronted by having his recommendations from a previous meeting overturned, a factor that in the past produced much rancour.

Second, much of the work of the budget had been done well before the new council took office. Assessment growth had already taken place. It was higher than originally projected, in part because projections are by nature conservative in order to avoid a shortfall and also because the economic recovery was faster than anticipated. As well, contracts with unionized staff had already been negotiated and were simply awaiting ratification when the new council took office.

Third, non-unionized staff continued to take wage freezes. Since they were the ones being asked to bring forward a budget with no increases, they looked to themselves first to see how they could make this happen.

Fourth, over the past two years, the Service Review Committee had done the background work and set the foundation for a new approach to budgeting, one that allows council to look at the service that it is providing and to assess its value. This new approach was used for the first time in this budget. It gave the administration which actually prepares the budget recommendations a much better grasp of what the actual current and future requirements of a specific service are.

Finally, much of the tax freeze is actually a deferral. The police found a one per cent reduction in part by delaying hiring of 10 additional personnel. They plan to hire them later in the year. But that is a short term savings. In the end, the positions will be filled and the costs will have to be accommodated in next year’s budget. So the savings are one time, but the lowered tax will carry on. Where will we find the money next year without a tax increase?

Similarly, not contributing the required amount to the water and sewer reserve funds, while providing a bit of breathing space today, will cost us more tomorrow.

So in the end, contrary to some allegations during the campaign, there is no evidence of massive waste and misspending at City Hall. No huge savings to be found. No pots of money squirreled away. Just continuing simple prudence which allowed the average taxpayer to avoid a tax increase of $65 for 2011. And those who wanted to do a line by line analysis were silent.

That is not to detract from the accomplishment of fulfilling a campaign promise that resonated with the public; the Mayor was successful in keeping everyone focussed on that target.

But year one is the easiest.

1 comment:

Anonymous said...

Thanks Gina. This is the best summary I've seen of precisely how the budget results were achieved.

Keep up your good work.

Anon One