The City Budget---The first significant order of business

“Eye on City Hall”
A column of Information, Analysis, Comment, and unfiltered opinion
reprinted from Oshawa Central Newspaper
Bill Longworth, City Hall Reporter
January 3, 2011



On this first column of 2011, while city politicians are still in a “Resolution Mood” for the New Year, I hope, along with the vast majority of city residents, that Council resolves to cut taxes at their upcoming budget deliberations in February.

High residential taxation was the number one concern of voters during the election campaign, and everyone elected promised in one way or another to hold the line on taxation levels.

The budget meetings will be a good start to assess the sacred trust city voters placed in the newly elected to honour their campaign pledges. Not one politician got elected based on a promise to raise taxes. All got elected on promises to cut or freeze taxes.

So the February budgetary process will be the first major item on the city council agenda and the first real indication of whether politicians will honour the commitments they made to city taxpayers in the October 25 Municipal Elections.

Early indications are that Mayor John Henry will not be honouring his pledge to put a hold on taxes. At a recent Regional Council Meeting, he led the charge in arguing for an 8% increase in the water/sewer rates.

Henry admonished fellow councillors who did not support the bureaucratic recommendation by rhetorically asking if anyone knew of a service more important than water and further if anyone had heard of the Walkerton E-Coli Tragedy.

As if increased expenditures would have avoided the Walkerton issue in which criminal convictions were issued against the two supervisors charged with irresponsibly carrying out their duties to insure water quality in Walkerton.

In terms of Henry’s first question...”Is there anything more important than water?” it appears that Henry is mistakenly convinced that money is the cure to all evils and that more money would have resulted in better supervision by those charged with insuring water quality. How naive!

Henry has also demonstrated by his reasoning that the key component in pricing a commodity value is how important it is to humanity. Using the same reasoning, he would place a great economic value on the air we breathe and thus, if he could find a way, want to tax it at a high rate.

His support for the incinerator on Oshawa’s border as demonstrated by his nomination and vote for Roger Anderson as Regional Chairman, the chief proponent of the incinerator, seems diametrically opposed to his concern for clean water and human health. Anderson’s incinerator will spew health damaging pollutants into the atmosphere and into the lungs of our children.

In supporting huge water/sewer rate increases, besides breaking his election pledges, John Henry is clearly falling into the trap of politicians who fall hook, line, and sinker into the slick bureaucratic sleight of hand that works to justify greater budgets every subsequent year. This is a stunt that the bureaucratic stunt meisters can pull off when politicians are not too bright!

In his campaign for Mayor, John Henry, pledged to justify all budget items on a line-by-line zero based budgeting process whereby every budget item had to be justified from the ground up.

This care in the budgeting process that he promised is certainly not evident in his unquestioning and unhesitating support of the bureaucratic appeals for the extra water/sewer cash.

In the first budget and taxing question he faced, John Henry abandoned his pledge for the line-by-line zero based process he promised.

Henry’s system would be time consuming but would replace the traditionally used incremental system where current allocations are based on a percentage increase over the totals of the past year. Only the percentage increase over the last year then becomes debatable under this system.

In abandoning the zero based budgeting system he pledged, and accepting the incremental system, he guarantees us a tax increase every year.

Henry calls himself a businessman who wanted to run the city like a business and yet he abandoned the most basic idea of business...that is of looking for increased efficiencies rather than simply throwing more money at a problem. Indeed the system Henry has now adopted continues to reward or pad all existing, present, and past inefficiencies with an agreed percentage increase. This acts to compound all tax excess problems that have accrued over the years. The excessive capital pools generated will, of course, be eaten up by unnecessary discretionary city hall spending.

Guaranteed percentage increases in budgetary items removes all incentive to cut out the city hall fat, waste, redundancies, and inefficiencies and continues to reward all those things that are an anathema to business practice that Henry pledged to stamp out.

If any internal efficiencies result in cost savings to produce a surplus in government accounts at the end of the year, there is a bureaucratic “rush” to spend the surplus to avoid any money being left in the till at year end.

Surplus monies left in an account is catastrophic to bureaucrats as it announces to politicians that too much money had been allocated in the past year and signals a need to cut allocations. This is to be avoided at all costs according to the bureaucratic mind-set.

As a public service administrator in my past life, I often received emergency “directives” from budget supervisors near year end to spend money....send requisitions for any furniture/equipment you want (not need) and we will cover the costs.

These supervisors wanted to break the bank in the current year with unneeded purchases to insure budgetary increases in the following year. After all, you can’t “require” increases next year if you’ve left money in the till this year.

This is a game all bureaucrats play which is quite in contrast to the private sector where wasteful expenditures cut “bottom line” profitability. In government service, there is no bottom line as bureaucrats are confident that politicians will always approve digging deeper into the taxpayer pocket to replenish empty public tills to fuel more out-of-control spending.

In business, with the business mind-set, there is incentive to cut waste, cut inefficiencies, and cut fat to improve profitability. In the public service, the mind-set is to do whatever it takes to increase costs and spending to insure a bigger budget in subsequent years, even if that means wasteful spending, decreasing efficiencies, and duplicate and redundant operations and procedures, and increasing bureaucracy.

A classic example of this wastefulness in Oshawa is the unnecessary creation of a heavily staffed and space-rich “Information Oshawa” department where you will see handsomely paid workers huddling in unproductive “chatting groups” on any city hall visit. There is one worker sitting at the front counter to handle simple public inquiries and otherwise to direct technical inquiries upstairs to departmental specialists.

For example, I stopped by one day, and as a political columnist for the Central Newspaper, asked for the Agenda Materials for the evening’s Council Meeting. I was told I’d have to go upstairs to the Clerk’s Department for that.

Similarly, any developer wanting more than mundane elementary information would be referred “upstairs” to the planning department. Such a generalist department as Information Oshawa may have blank forms to dispense but no detailed or expert advice or opinion...but a taxpayer cost of millions of dollars per year and an unnecessary waste endemic to public service but an anathema to private business.

Another wasteful expenditure, of course, was the $20M redevelopment of city hall. While a number of rationales for this wasteful expenditure were foisted on the public by the last council, none stuck and so politician’s settled on pegging the huge cost to the need to house this unneeded Information Oshawa.

Smart! A rationale for a wasteful $20 M city hall expenditure is tied to an unneeded and wasteful city department.

In short, the only way to guarantee a hold on city hall spending is to provide incentives for increasing efficiencies. This is only done by mandating small cuts to departmental budgets and then having departmental managers look for cost savings within their departments.

During the election campaign, I suggested all city hall departmental budgets should be cut by 3% to allow for a 3% residential tax cut. Every 1% tax cut would reduce city tax coffers by about $1M. A 3% tax cut would reduce the city’s $115M residential tax "take" by about $3.5M. This would be similar to taking $3.50 from you if you had $115 in your pocket.

That’s a cut you, I, and the city could live with. We’d do it by cutting out unnecessary and frivolous spending...just as the city would!

We need some demanding political leaders, though, as these cuts would only come as the city bureaucrats were dragged kicking and screaming from their gold plated latté cups.


Be sure to follow Bill’s radio broadcasts, “Eye on City Hall”,
every Monday, 6-9 pm EST, on http://www.ocentral.com/thewave/