By now, interested observers of City Hall will be well aware of the outcome of the budget target-setting exercise last Tuesday night. Ultimately, council asked staff to bring back a modified budget with the same overall targets, but some modifications in how those targets would be achieved.
The original proposal that would see some departments, agencies and boards have their budgets chopped while police and fire receive increases well above inflation rankled many.
Councillor Joni Baechler pointed out that civic departments were being asked to take zero per cent increases for the third year straight with the bulk of the savings going to fund more economic development and protective services.
“We already have the taxpayer subsidize industrial development by $10M per year”, she noted. In the meantime, any plans to actually improve the functioning of the city- a 311 service, improvements to transit, a green bin program- were being abandoned.
Her concerns were cut off by the mayor who pointed out that others wanted to speak.
I was surprised by this abrupt interjection since there are no time limits for speaking in Committee of the Whole. Additionally, Baechler had not been speaking for long and much of the time that she had the floor was spent in eliciting information from staff.
Baechler herself seemed somewhat taken aback by this attempt to silence her; she relinquished the floor on the understanding that there would be an opportunity to speak again when everyone else had had a turn. However, it’s not the first time that the mayor has interrupted this particular councillor and I suspect it won’t be the last. It reminds me somewhat of the chairing of former deputy mayor Tom Gosnell.
Councillor Paul VanMeerbergen dismissed any concerns about possible impacts of cuts to the city by referring to those who expressed them as “Nervous Nellies”.
“This is the new reality,” he claimed. “We cannot afford new services.” He pointed out that council could be bold as it was setting targets, not constructing an actual budget.
Councillor Nancy Branscombe was clearly frustrated by what she saw as unrealistic projections and targets. She noted that there is an ever increasing number of “summits” with grandiose plans for growth while service departments are being underfunded.
“We are going to regress,” she warned. “Nobody has 5% assessment growth!
“We need more time [to get a} better understanding if we do all this. Economic development is not going to have a big impact on our bottom-line for two or three years. We have to figure out what do we need to run a city and what will we cut if we can’t afford it.” Referring to transportation, she pointed out that it would hardly be a savings to cut back on investment in transit only to have increased costs for road replacement and maintenance.
“There are a whole bunch of unanswered questions for me.”
The mayor did not appear too happy with the turn of the debate. Earlier in the day, he had been quoted by Metro London as stating that everyone on council was onside for a zero per cent tax increase. Now, it didn’t quite look that way.
He exhorted the members not to think about the number of services but what services they want.
“Best thing this council came up with is Services Review”, he announced, referring to the approach to budgeting that reviews all services.
This was news to me. I thought that it was the brainchild of the previous council; otherwise, why did a number of my colleagues- Baechler, Branscombe, Bryant, Eagle, Usher- and I spend all those hours meeting with various departments during 2009 and 2010 trying to sort out exactly that?
He was not about to give up on his dream of zero per cent. He suggested that possible opportunities for increased revenues- a higher assessment growth, a possibly bigger than anticipated surplus, some potential government grants- all should be built into the budget targets to bring it down to zero. “Let’s construct it from the bottom up,” he pleaded. “Sometimes people are happy to make sacrifices.”
Finally, Chief Administrative Officer Jeff Fielding had had enough. “[To meet the targets proposed by staff] I have to find 11.5M,” he stated. “To get to zero, I need to find 20M. Ask the same [sacrifices] of the boards and commissions. I can’t find $20M solely on my side of the budget. Give us the range and put pressure on the rest of the organization. If we offer them [protective services] 4.5, they will come back and say they can’t do 4.5%, they’ll say 6.7%.
“We’re in the ballpark as a starting point,” he added, referring to the proposed targets.
An attempt to refer the motion back to staff for further information was met with some resistance and a request for specific conditions. “I want the starting point to be these numbers,” Fielding asserted, although he conceded that the components could be modified and some consideration given to incorporating additional or enhanced sources of revenue.
In the end, that is what happened. Council took a 20 minute break and staff came back with a recommendation for 2.4% which could be brought down to 1.4% if assessment growth reaches the projected 1% and all is applied to reducing the tax levy. But in the revised scenario, protective services are given a target of 3% and all others, 1.5%. There is also the hope that $4M can be coaxed of out Hydro London in an enhanced dividend and that perhaps there is the odd asset to be sold off.
Can it be done? Will it happen?
Police have already indicated that they need more than 6% as a result of council-approved hiring, labour settlements elsewhere and inflation. How likely are they to be satisfied with 3%?
Transit’s needs are projected at 7%; will this come from other boards and commissions? Which ones?
Even if council manages to meet the target, it is still not much lower than the actual budget increase council delivered in 2010 when the tax levy increased by 1.8%.
Where will the additional 1.4% come from if council still wants to get to zero? That’s another $6-7M.
Will the assessment growth materialize? Last year’s growth exceeded expectations because of catch up from times that were more affluent and federal stimulus programs. What will fuel growth coming out of recessionary times?
Things are being pared to the bone; it’s harder to find savings once you have spent all your assessment growth, your dividends, and your surplus before you even see it.
Remember: municipalities can’t run a deficit, so you have to give yourself some leeway.
And what about that accumulated debt?