Report from the Budget Front
Ron Bolin — August 17, 2010
At its meeting on Monday, August 16, the Finance Policy Committee of the Whole (FPCOW) began its discussions of the 2011 budget with a purported review of the 11 priorities set by Council last year to see if they should be kept or modified. This request came, quite appropriately, from Staff who need to understand the ways in which the Council might want the 2011 budget to be crafted.
To kick off the discussion, Brian Clemens from Finance made a presentation outlining where our 2011 budget was currently heading given current outstanding decisions. Fundamental information provided shows that:
- The 2011 property tax increases will be: Residential 5.7%, Commercial 4.7%, and Industrial -15.9%;
- Estimated total costs leading to the 2011 Tax Increases: $3,729,000, of which $3,291,000 (88.25%)are related to staff increases;
- Percent tax increase due to increased staffing costs: 4.1%, all-in increased costs: 4.7%.
Additional Capital spending is shown as $1,377,000 but this is largely offset by an expected revenue increase of $1,200,000 from the taxation of new construction.
If you think that, given current economic conditions, it is reasonable that our residential taxes for 2011 should rise by 5.7% and our commercial taxes by 4.7% (we have so little industry that the decreases in these rates do not make a great difference), you can go back to sleep, comforted in the belief that our Staff and Council are assiduously looking after our economic well-being. If, on the other hand you suspect that they may be better at looking after themselves than us, it is time to let your opinions on municipal spending be known.
Preliminary budgets have already been submitted to Finance and will undergo internal review in the City in August and September. In October and November budget revisions will be made and a presentation for Council prepared on Nov. 15. In the December/January time period it is anticipated that a financial plan bylaw will be adopted. In March and April figures are reviewed in light of new information and necessary updates are made(information about government grants, etc., are received during this period). On May 15 it is anticipated that the final financial plan and tax rates for 2011 will be adopted (the city runs on its 2011 estimates until this time). Your taxes will be due on July 1, 2011)
You will note that flexibility rapidly decreases with time. In fact, the easiest time to make suggestions comes in August and September when new input is being sought from departments. By mid-November the budget has pretty well jelled. So start thinking now.
On the priorities which provided the impetus for Monday’s presentation, I have previously enumerated them. While there was some discussion at the meeting, further discussion and action was postponed to a seminar to be scheduled. Last year this seminar was open to the public and I trust this will be the case again this year. It is also usual that Departments make their budget cases to the Finance Policy Committee of the Whole (FPCOW – made up of all of Council) and these meetings are open to the public. Our blog will try to keep you posted on the dates for these presentations.
Council needs to hear from us as much as they need to hear from Staff. The job of professionals, after all, is to serve those who are not. This is easy for all of us to forget.
Posts and Comments on Nanaimo Governance 
Ron, although I live in the RDN we are all faced with the most interesting ideologies that shortfalls, salary and benefit increases can all be, and should be, made up with an increase in taxation.
Simply put the well is empty – go back and sharpen the pencil. There was a post made some time ago that showed locations similar in size to Nanaimo had fewer staff which in turn equated to fewer benefits and then again, fewer pensions and fewer pay raises. I have no issue with a pay increase, regardless of how large IF an employee or manager deserve it! Just going across the board is absolute BS and screams of colusion and corruption somewhere.
I would suggest that some of these people experience what the real economy is like and get themselves a real job. None of us have our hands out because we are just trying to keep what we have in our jeans.
Any tax increase for a salary increase is BS and should be made unlawful.
Everybody needs to let the politicians know that the well is dry and we do not have any left to give. I make less money today than I did 10 years ago because of the incredible increases in taxes. I am out of options!
We are not out of options. We are simply out of will. We are too cowed to think we can do anything -and so we can’t. Does anyone know a retired accountant who can make sense of the city’s accounting? Most of us simply give up when we see the numbers. But the budget is the most important document in the city. Let’s put our heads together. First we need to push Council to undertake a zero based budget exercise. This takes us back to first principles and requires justification of everything. A lot of things will come easy, but it is the rest we need to watch… the inefficiencies and fat that come when both exercise and dieting have been forgotten. There has not been a full examination of the budget by Council and those of us who they represent for as long as I remember, so budgets have simply been exercises in snipping a few lose threads rather than examining the fabric itself. You know the drill. They give out a stupendously high tax increase figure and then we all breathe a sigh of relief when they relent by a percent or two, even though the latter figure remains multiples of the increase in the cost of living index.
We need ideas for reform, not just for show. Help.