Hitting the brakes

Councillor Roy Pennell

Councillor proposes across-the-board budget cut

The numbers tell a grim story. The County’s tax levy has increased, on average, 11.5 per cent every year since it was amalgamated. (Remember that the chief selling point of amalgamation was that it would produce efficiencies and reduce costs.) User fees—the amount raised for municipal services such as garbage and building permits—have increased even faster: pulling in an average of 12.2 per cent more revenue to the County every year since 1998.

The tax levy is three times greater than it was 18 years ago, even though the number of taxpayers has remained stuck at about 25,000 souls.

Last week, Councillor Roy Pennell laid out the numbers for his council colleagues and asked them to consider a five-per-cent cut across all budgets for 2017.

“We have to take a serious look at cost reduction,” Pennell pleaded. “We have not seen a budget decrease since amalgamation. If we don’t ask, how do we know?”

By this, he meant to head off predictions of doom and catastrophe that would follow such a proposal. It didn’t work.

Councillor Gord Fox described the aftermath of a budget in a previous term of council, in which there was no increase of the year before. That council plundered its reserves to balance its accounts, said Fox.

“It took years to build reserves back up again,” said Fox. “I don’t want to do that again.”

Others didn’t share Pennell’s view that there is a problem.

“I’m pretty content with our budget process,” said Mayor Robert Quaiff.

Bloomfield councillor Barry Turpin pointed to looming expenditures in the County’s near-term future, items such as the redevelopment of H.J McFarland Memorial Nursing Home and County Road 49. He also pointed to wage pressures and cost-of-living increases owed to staff.

“It is difficult to consider this now,” said Turpin. “We are putting money into reserves. We are doing a lot of things right.”

CAO James Hepburn added numbers to the point.

“Over the last four and a half years, we have put $5 million into capital reserves,” noted Hepburn. “On the operations side, we are already doing more with less.”

Some, like Mayor Robert Quaiff, took the proposal to mean that council would be doing the cutting.

“I don’t know where we would start,” said Quaiff. “There are many costs we don’t control. External agencies give us a bill and we pay it.”

Councillor Treat Hull warned that cutting expenses would mean eliminating services and that would be poorly received by County residents.

“We might not like the consequences,” said Hull.

Not everyone thought it was a bad idea.

Councillor David Harrison said it was reasonable to ask staff which cuts could be made and what they would look like.

Councillor Janice Maynard noted that the County has never conducted a zero-based budget exercise—wherein every department begins at zero and must justify every dollar it spends, rather than merely a discussion of the difference spent last year versus the amount proposed for the coming year. “There is some merit in looking at this,” said Maynard.

Councillor Dianne O’Brien suggested selling assets, such as unused quarries, to help improve the County’s finances.

Councillor Bill Roberts suggested, however, his colleagues were perhaps looking at the problem from the wrong angle.

“I don’t think we are going to cut our way out of this crisis,” said Roberts. “It’s about generating more money. The question for me is: how do we drive more income?”

Hepburn confirmed that reducing costs would mean reducing service levels. But he added this may well be a worthwhile exercise—to enable council to better understand the implication and consequences. He committed to bringing a set of high-level budget targets back to a committee of council in the summer to facilitate further discussion.

Councillor Pennell was satisfied the conversation would continue.