FEBRUARY BUDGET UPDATE
Midland’s 2016 budget deliberations continue their indefatigable slide into irrelevance.
Three members of midlandcommunity.ca attended the special budget deliberations on February 16, only to come away shaking their heads with disappointment in the process. During this budget cycle, staff have once again adopted new and imaginative approaches to obscure financial transparency. Councillors were heard complaining that it is impossible to compare this budget with last year’s because costs are being grouped differently and under new headings, continuing a similar tradition from previous years. Staff claimed that they sought out and identified all potential savings, and Council should simply trust them at their word.
We have a different take. A detailed review of the Draft 3 report suggests that there was not a single instance where departments found opportunities to reduce or eliminate existing operational expenses. The only expense items that were eliminated were new spending ideas that were introduced earlier in this budget cycle. Yes, you read that right. In the early stages of this exercise, staff created a Christmas wish list full of things like a splash pad, a town Economic Development Officer (costing over $100,000 per year), an Active Transportation Study, a new staff position of “Volunteer Coordinator”, a new Planner, and countless other new items. At Council’s insistence, the last of these new spending ideas were finally dropped last week and were claimed as “cost savings”.
These are what we call “phantom cuts” – eliminating costs that were never there in the first place. Imagine if we could all claim to reduce our household budget every time we decided not to increase it … we’d all be rich enough that we wouldn’t have to worry about taxes!
To make matters worse, the Director of Finance / Treasurer elected to compare his 2016 draft budget to the 2015 budget, rather than comparing it to actual 2015 results. As Councillor Glen Canning so eloquently put it in the February 22 meeting of Council, “Any budget is really an educated guess, but basing this year’s budget on last year’s guess rather than actual results really takes the ‘educated’ out of ‘educated guess’”. The accounting sleight of hand was so effective that it even left some Councillors scratching their heads to understand whether we had a deficit or surplus in 2015. (Incidentally, it was a $200,000 deficit.)
Despite this obscurity and the “trust me” statements from directors, it is clear from the totals that departments failed to identify any long-term operational cost savings. Instead, they targeted one-time savings among things like maintenance, summer student job cutbacks and external expenses in order to protect their sacred staff levels, salaries and perks at the expense of our town’s future.
The "5 Year Tax Impact" projection was also immensely disturbing. Here, staff basically said, “Don't worry, we can’t cut back this year but we'll magically come up with nearly $700,000 in savings next year”. (This, in a budget that is not yet deliberated. It is always so much easier to achieve budget savings when you don't have to commit to them.)
The summary was the final straw, implying that there is a departmental tax impact decrease of 0.4%. When questioned, the Director acknowledged that pending collective agreements would most certainly result in a significant increase in the 2016 budget (not a 0.4% decrease at all), but he didn’t so much as add a footnote to this effect in his presentation.
But Council isn’t beaten yet! At the end of the February 22 meeting, Councillor Strathearn introduced a motion to direct staff to build a business plan that would take $1.5 million out of the budget by 2018, exclusive of any savings in police services. Unfortunately, with the 11 p.m. deadline looming, and some of them closing in on their seventh continuous hour of meetings, Councillors voted to defer the motion so they could discuss it without the fog of exhaustion and after some time to properly consider it. This motion will basically abandon the notion of achieving the 75th percentile on tax rates, but at least it will draw a line in the sand and staff will be accountable for delivering real results. Let’s hope such a motion passes when the time comes!
As it stands right now, we are no closer to achieving a 2016 budget that can be agreed upon, and certainly not one that achieves any measure of success in moving Midland taxes down from their current lofty heights. This merry-go-round has to stop eventually, and we can only hope that it happens because the brakes are applied instead of waiting for the power to go out because the carnival has gone bankrupt.
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