Revised budget priorities to be reviewed by Council Mon 30th
STAFF REPORT
REPORT TO: MAYOR & COUNCIL
FROM: A.C. KENNING, CITY MANAGER AND
B.E. CLEMENS, DIRECTOR OF FINANCE
2011 – 2015 FINANCIAL PLAN BUDGET PRIORITIES
Within a context of fiscal responsibility and sustainable property tax increases and reflecting the community’s Pride of Place, the City of Nanaimo’s budget priorities are:
1. Maintain a high standard of protective services;
2. Maintain civic infrastructure at current or better levels;
3. Improve water supply system to ensure adequate supply of high quality drinking water;
4. Work with employee groups to continuously improve City services;
5. Transition to more sustainable operations;
6. Responsible growth management;
7. Partner with the Province and nonprofit associations to reduce homeless ness in Nanaimo;
8. Support Economic Development Commission in developing and implementing an updated economic development strategy.
Note that these are not in any particular order of importance. Council may wish to rank them, or they can be left unranked.
As in the previous version, staff can provide some commentary on how each of these priorities are being pursued in the existing 2010-2014 Financial Plan.
1. Maintain a high standard of protective services
• Public safety is the largest and fastest growing segment of the City of Nanaimo’s operating budget.
• Council has approved the hiring of 24 new RCMP officers plus 10 support staff over five years.
• An expansion to the Police Services Building is planned for 2012.
• The financial plan contains the costs associated with the 10 year fire plan.
• Fire Hall No 4 was increased to 24/7 staffing in June 2010 and planning for the next fire hall on Hammond Bay Road begins in 2012, which will open in 2014.
2. Maintain civic infrastructure at current or better levels
• The Five Year Financial Plan contains adequate funding for the operation and maintenance of the City’s sewer and water distribution system.
• Staff is also considering making recommendations related to improvements to the sewage collection network and community consultation will begin this fall to discuss the provision of sanitary sewer to the Green Lake neighbourhood,
• The 2010 capital plan contains funds to upgrade Beban Park Centre, including a $1 million grant from the RINC program, but does not contain funding for additional improvements to Beban that have been presented to the Parks, Recreation & Culture commission.
• Replacement or seismic upgrade of the City Hall Annex building.
• Civic infrastructure is not being replaced or upgraded at the same rate that it is depreciating. Staff will be presenting more information to Council on this infrastructure gap.
3. Improve water supply system to ensure adequate supply of quality drinking water
• Over the next decade, expenditures will increase substantially for water supply.
• This is expected to include a new water treatment plant, improvements to existing water storage facilities at the No. 1 Reservoir, and increased storage at Jump Creek (i.e. a new dam or raising the existing dam).
• Water supply is projected to be the largest increase in civic expenditures over the next 5-10 years, and it will be funded through borrowing, DCCs and increased water rates.
4. Work with employee groups to continuously improve City services
• Staff are committed to ensuring continuous service and value improvements. This is reflected in staff’s strategic priorities.
• This could mean changes in service levels in certain areas and reallocation of resources as required.
• Where appropriate, staff will identify higher service level requests for Council’s consideration.
5. Transition to more sustainable operations
• Hired a corporate energy manager in 2009 (partially funded by BC Hydro).
• Significant expenditures are committed over the next five years to projects that lower municipal energy consumption and/or GHG emissions.
• Creation of the Sustainability Reserve.
• Community initiatives such as toilet rebates, wood stove change out program, Burn It Right, pesticide bylaw.
• OCP amendments to support sustainable communities.
• Collaborate with RON on public transportation issues.
6. Responsible growth management
• Continued implementation of the OCP.
• Neighbourhood planning process.
• Comprehensive plan for the Assembly Wharf.
• Contribution to the RON’s Regional Growth Strategy.
7. Partner with the Province and nonprofit associations to reduce homelessness in Nanaimo
• Provide land for the Housing First Strategy.
• Provided a grant to Tillicum Haus for DCCs for Housing First property.
• DCC reductions for non-market housing.
• Housing Legacy Reserve helps fund non-market housing issues.
8. Support Economic Development Commission in developing a new economic development strategy
• New Economic Development Commission will have the opportunity to reshape the City’s economic strategy.
• The new Economic Development strategy will include tourism and issues related to the community’s Pride of Place.
As previously indicated, this list is being presented for discussion purposes and to help focus Council debate on the issues. It is not intended to be a list of staff’s or the Mayor’s budget priorities. The purpose of this discussion is for Council to provide a clear indication of what issues should receive priority in the budget. Once a list of budget priorities is agreed upon and adopted by Council, it will be used by staff to inform the budget process and to make decisions about what items might be recommended to Council to receive more or less funding in the future. In this regard, the more accurately that this list reflects Council’s true priorities, the more likely it will be that the budget that staff is currently preparing will be in alignment with Council’s goals.
Posts and Comments on Nanaimo Governance 
I think this list is slightly better then last years. Last year was a bit of a lost year. Perhaps this year will be better.
I have a quibble with goal number five:
City planning documents compare sustainability to a three legged stool. If so, I see only two legs here. There seems to be a effort to reduce consumption, and an initiative to eliminate waste. Where is the third leg of that stool? That third leg is productivity.
We should include some increase in productivity as part of the transition to sustainability. I know its hard to associate the bureaucracy at city hall with productivity, but, in fact, city hall is, by far, the largest provider of services, and in that capacity is one of the largest producers in our economy. I think it’s important to understand that what city hall produces is a very important part of the solution to the problem of sustainability.
In fact, if what they are producing is not contributing to the goal of sustainability, they should probably stop doing it. If all you are doing is creating more documents that will just need recycling, then, really, don’t bother.
That was a very cheeky statement. On a more positive note: the city staff are presently involved in creating a new zoning document. From what I’ve seen so far, I must say it is very good. It’s concise, easy to read, well organized and very helpful. I know it will make my job easier. I suspect it will make the jobs of other people working in the development industry easier. And I think it will ease the burden on city staff and council. In this respect it is making a very real contribution towards the goal of sustainability.
I know that the issue of productivity is addressed in goals 1,2,3,4 and 7, but it is important to understand that increased productivity is a critical component of a sustainable future. It must be entirely integrated with a reduction of consumption and an elimination of waste. Otherwise, there is no progress towards a solution.
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Goal number six is just the same old tired empty promise.
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Goal number eight is as close to an admission of failure as we are going to get from anybody at city hall. How can anyone have as a goal a statement that, in effect, says; as soon as someone points us in a direction we’ll go there.
Here’s the direction I would give you. Find out what it costs to live in Nanaimo. Figure out what the living wage threshold in Nanaimo is. Then do everything in your powers to lower that number. The Financial Department, the Planning Department, and everybody else should devote almost all their effort to finding ways to lower that number.
The reason this would contribute to economic development is that this ‘living wage’ number is an easy talking point. Suppose you’re talking to somebody who is thinking of moving their business. Its makes for a very strong presentation when you can say something like; “In Vancouver the living wage is x/hr. In Victoria, the living wage is x+.5/hr. And in Nanaimo the living wage is x-2.25/hr. and we think we can make that number even lower.” Then just pause. Let that information sink in. Then take out a business card. Not your business card. This would be a business card for a moving company. Hopefully, this is a local moving company. You can say, “This is a company that specializes in moving businesses such as your’s to Nanaimo. You should call them soon, because they are very busy.”
The thing is, we don’t have to hire anyone to make a pitch like that. Our mayor and councillors could make a pitch like that, easy. In fact, if they did that pitch once or twice a day, as far as I’m concerned, they could take the rest of the day off. We would have economic development up the yin yang.
Spending any kind of money on promoting economic development, means we screwed up somewhere else. We made the wrong decision, backed the wrong plan so we have to go out and promote to overcome the objections to developing here. And if we are spending more money, and putting more effort into this, we are going from bad to worse. This is a sink hole the city as got to get out of. Our priority number nine should be to get rid of priority number eight.
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I’m thinking of saying this to council, this Monday. What do you think?
Well Sunny Dan………..with regards to goal #5, I think you should spell this out next Monday and I do hope that you will!
I do believe though that you are a bit harsh where it concerns goal #8. I have no particular problem with admitting to failures of the past, in fact that probably is a very healthy thing. I believe that the Mayor is to be commended for having started the EDC initiative and while I still have a problem with the composition of this particular Commission ( no social planning or environmental expertise ), I will be looking forward to seeing their first report and then will judge whether your proposed goal #9 is a valid one…..
See you Monday!
A priority I would like to see is an estimate of what level of tax increases are going to be sustainable over the next five years. Or is the assumption, that there is no end to the amount of increases the taxpayer can bear?
I think Jim has a point here. Sustainability will make this city easier for all of us to live. That is a very worthy goal. We as taxpayers can argue that higher taxes make it harder to live here. True. The city can argue that the increased services those taxes provide make it easier to live here. Let’s say that that is also true. (I’m giving the city the benefit of the doubt.) The end result is essentially static. There is no movement towards sustainability. Everything remains pretty much the same, except that the goal of sustainability moves farther away and becomes harder to reach. Worse yet, while other cities may move towards sustainability we do not. This means our economy will continue to erode, making more of us dependent on city taxes, requiring the city to raise taxes to supply more services. This city becomes a harder place to live in even though all we a doing is standing still, or breaking even. Jim is right, tax increases are a very big part of the problem.
True enough Jim and Dan… the discussion wouldn’t be complete without also considering the fact that cities are simply expensive beasts. What matters most to me is what is the value received by the taxpayer and how is it appraised and measured (as Ron points out below).
Equally, what dynamic exists within the institution to adjust to changing and ofter harsh economic realities. I know personally, if I can avoid discomfort and pain I will. Any organization, private or public that doesn’t have to face harsh realities and self-correct won’t find the discipline to do more with less.
Also, what are people’s thoughts on alternative and additional sources of revenue for municipalities? The status quo being almost entirely based on taxes levied on property (increasingly residential property) assessment values.
Dan has made some very good points. I applaud his criticism of priority 8 as it seems to be kind of like asking us all to pass the hat and pray for rain during a long drought which has already been characterized by misguided economic development strategies. I haven’t even heard a definition of what is meant here by economic development. Do we simply mean population growth? Growth in our developed area? Or do we mean something real like increasing the median income level of our citizens; getting folks off the assistance rolls; out of the food banks; into reasonable housing, fewer crimes, etc. Until I hear how we are going to measure any improvement, such statements are simply quackery.
And how about goal 1, maintaining a high standard of protective services. The 2009 Annual Municipal report tells us that while we have a target ratio of police to population of 1:700, it also tells us that we had in 2009 a ratio of 1:634, a much better ratio than the target. Yet we propose to spend a major portion of our 2011 budget addition in adding officers and police staff. Why? Certainly we have not been presented with any statistics which shows such a need.
And what is the difference between priorities 2 and 3. Isn’t the water supply subsumed under civic infrastructure. I know that the plan is to spend some $75,000,000+ on the water system in the next few years. I also recall our former city manager stating that if we weren’t growing we wouldn’t need these facilities. My question is: Do Development Cost Charges not cover this new growth? And if not, why not?
In Priority 4, we want to work with employee groups. Where is the priority to work with citizens to keep taxes in check. It is stupefying to find no priority for keeping taxes under control.
Priority 6 is a lot like priority 8. We are apparently going to continue to do what we have been doing. Where has this gotten us and how can we tell?
Don’t get me entirely wrong. This set of priorities and the notes thereto are a step in the right direction. But what we need is a dash in the right direction. Particularly we need measurable goals so that at the end of the year we can assess our progress. I have seen no attempt to gauge the progress made since last year given the previous 11 priorities. Goals and priorities are meaningless if we can’t tell whether we have been successful in meeting them.
NOTE: Fred Pattje and Diane Brennan and any other current or potential candidates for 2011:
Priority ONE. Taxpayers have no more money. Clean up the taxable rate and eliminate any projected increase. We ain’t got no more!
George:
I am sorry to remind you, but the estimated tax increase for 2011 is 5.7%. We can anticipate that they will, with great wailing and gnashing of teeth, grudgingly make it 4.7% or thereabouts, thus proving themselves great tax reduction heroes. (We might even get a bigger cut in the increase as it will be an election year.)
And if we behave as feckless as we have in the past, they will get away with it again.
It was hard this afternoon to determine whether the discussion on the budget priorities was merely pathetic or whether it rose to the level of true tragedy. It has rarely been my misfortune to listen to such twaddle, though I admit several Councillors made some, if unsustained, efforts to try to get a leg to stand on.
Everyone seems to have overlooked the information provided in the Finance Departments 2011-2015 budget presentation in which the signs, portents and estimated tax increases for 2011 were presented:
Click to access 2011to2015-Budget-priorities.pdf
The discussion wandered off into Cloud Cuckoo Land looking for some figures. One has to wonder whether anyone read this document which showed where the 2011 increase was currently scheduled to go. Saints preserve us as our hired help will not.
I hope that such behaviour will not be sustained as the budget process continues, though it seems that Staff may take it that the meeting gave them enough on which to prepare a budget. I can only hope that my impression is wrong. I have commented above on some suggestions and will try to put together a program in the near future.
The meeting was simply a waste of time, however on one point I was enlightened as to the mindset of council.
As much as there is talk about holding down taxes, and looking for money to cut in the budget, without barely a blink of the eye, on a staff recommendation another $40,000 got spent to add a bike lane on 4th St. I think that Councilors Sherry and Bestwick were opposed, but the rest just rubber stamped the expense.
And that is why and how taxes will not go down anytime soon.
COUNCIL MUST BE TOLD NO INCREASE! NONE, ZERO, ZILCH, NOTHING.
If a city politician cannot hold tax increases to zero, they will not get my vote and neither will those who do not promise to hold them to zero. My take home income from my full time job has dropped in the last six years and I successfully budgeted to a profit the last two years. But sadly no, I will not be a candidate for council nor mayor. :|