Plucking the Public Purse Strings: It’s Music to their Ears
Ron Bolin: May 12, 2012
At a recent meeting of Council, Fred Taylor again raised the question of the large amounts of money which Council annually takes from the pockets of Nanaimo taxpayers and places into its own slush accounts, known now as reserve funds and formerly as “rainy day” funds. This is done by taking tax dollars, collected annually but not spent, and placing them into “reserve” accounts. This year the amount stashed was $2.7 million dollars, a bit over $30 for every man, woman and child in Nanaimo. Previous years have seen better pickings with more than twice that amount. These sums grow until they can add up to some very grand discretionary money for the folks at City Hall.
Don’t get me wrong. No one opposes the city setting aside some savings over and above those mandated by legislation to deal with unanticipated events. All prudent individuals or agencies do this to cover emergencies.
But while saving some money for emergencies is prudent for all, saving beyond the estimated needs provides organization such as the city with undeserved dreams of grandeur. Such funds can grow significantly and have allowed Council and Staff to indulge in their penchant for things like a Conference Centre, a new city hall annex, and no doubt soon, a multiplex, with maximum public funding and minimum public participation.
For example, some $30 million dollars went from these reserves to ensure the construction of the Conference Centre, which now additionally costs a million dollars a year to operate. Without those “reserve/slush” funds it is doubtful whether this construction and its accompanying destruction could ever have been undertaken. A new borrowing referendum would have been required.
While individuals may be permitted the luxury of saving for toys with their own money, it is exceedingly difficult for me to see how this logic extends to the city being allowed to collect excess taxes for their toys. What ever happened to those days when major projects were funded by public debentures, subscriptions or even long term borrowing which requires full public participation? Slush funds represent far too large a temptation for the folk who occupy City Hall. Who is better suited to spend my discretionary money; me or City Hall?
Fred Taylor is right on target. Reserve funds are for emergencies, not for slush funds. Put a cap on them and see that excess funds get back to the taxpayers.