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Twenty Pounds (First in a Series on our Municipal Budgets)
Ron Bolin: September 10, 2012
“Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.”
Charles Dickens: Wilkins Micawber, in David Copperfield, 1849
Mr. Micawber speaks of his family fortunes in terms of its cash flow and whether that flow is positive with income exceeding expenditures, or negative. It is possible to look at the cash flow of the City of Nanaimo in the same way. On its website, under financial reports from the Finance Department, one can find the: “City of Nanaimo Consolidated Statement of Financial activities for the year ended December 31, (year)” dealing with City finances all the way back to 1999 which provides a 13 year record up to 2011. Another document, the City of Nanaimo Financial Plan for 2012-2016 adopted by Council this year adds estimates for the years between 2012 and 2016. An examination of these two documents allows us to look at the City’s record from Mr. Micawber’s point of view, one with which, I would suggest, many of us, particularly those on fixed or falling incomes, are very familiar.
The net difference in income over expenditures was or is projected to be positive in eight (8) of these eighteen (18) years and misery making for ten (10) of them, with a net cost of expenditures over revenues of some $60,724,448 dollars. Poor Nanaimo. With such a record it could be anticipated to join Mr. Micawber in the work house, if it were one of us rather than a government corporation with the power to tax.
So how do our public servants, both elected and appointed, manage to defeat Macawber’s dilemma from year to year? Why by the magic of compound interest, of course! The City has the ability to “overtax” its subjects (or underspend its budget) and thus put money aside when it is in a surplus as was demonstrated in the eight “fat” years. On the other hand it had the ability to borrow money from the moneylenders in those ten “lean” years because it is known that credit risks are slim to none as a government can always increase taxes on its subjects to raise more money. Borrowing either from previous savings or from lenders funded the nearly $61 million dollar shortfall during the period 1999-2016. This matter deserves further discussion as money borrowed from lenders tends to cost about twice as much as is made on money conservatively invested which raises questions about the value to taxpayers of municipal borrowing.
As Nanaimo taxpayers are aware, the City has consistently raised taxes at rates significantly higher than the consumer price index for BC which leads one to wonder why this should be so if the growth that we have had since 1999 has led us to such a deficit –and further to question why, given these factors, that our political masters continue to harp on growth to entice newcomers rather than concentrating on financial stability for those who have already chosen to make Nanaimo their home.
More on some of these topics will follow. It would be most advantageous if we could form a working group to undertake more facets of a Nanaimo Budget Project. If you are interested in discussing such matters further, please contact me at rlbolin@telus.net. There is lots of readily available material and there are many angles to be covered.
Posts and Comments on Nanaimo Governance 
Unlike Mr. Micawber Mr. Nanaimo just needs to walk downstairs to the flat he rents and raise Mr. & Mrs. T. Payer’s rent by half a pound and he is happy once again.
Funny really. It seems that somewhere someone has something to say about this incredibly laughable fact that they can’t balance the books. A tax and spend or tax and waste plan is what we’ve had and seen in those years and the years to follow. They need to stop reinventing the wheel, start making hard decisions and get on with it.
We’ve got double standards through out the City and the RDN – both that stand in the face of provincial and national codes (for design) that simply put their stamp on it. We’ve got laughable traffic patterns because one person, group or developer wanted to turn left (aka the new light on Terminal Ave, north of Townsite) or the lights 500m back from the intersection of Bowen and HWY 19A for access to a car lot of all things. But when it comes to safety we still can’t get on with the fact that many of the intersections that have the E&N so close to it are so under designed (Transport Canada wants this fixed – remember that accident on Dorman a few years back?) Still nothing done…
They’ve done some good things with say the path and trail networks but it isn’t finished and like everything tends to take a back seat to some other priority when the money runs dry.
I don’t know, lots to say, unfortunately, most of it is negative so I best not.
“On the other hand it had the ability to borrow money from the moneylenders in those ten “lean” years because it is known that credit risks are slim to none as a government can always increase taxes on its subjects to raise more money.”
Ummm, I’m not sure that works anymore . . .
http://www.counterpunch.org/2012/09/11/canadas-housing-bubble-set-to-burst/
Much of the problem is that credit has been too easy to obtain and taxes have been too easy to increase.
The problem is not unique. The private sector have been ‘leaveraging’ for years which is simply hoping that the future will pay for todays excess because they cannot pay as they go.
The question really is ; when do we say no more?
The answer,sadly, is never because those of the right vs left persuasions both think the world is a bottomless pitt from which they can squander and or profit from.
Council is made up from persons of idealogical ‘faith’ not reality with no idea what sustainability actually means.
Ron; whilst I appreciate your wish to form a working group to challenge the status quo.
How do you think the voting masses will appreciate the fact that we will all have to lower our expectations on life & vote for (example) yourself, Gord Fuller or the bullshitter Roger McKinnon?
It will take more than appreciation to form a working group that can lead to organized effort to deliver us from our baser instincts. I believe that the voting masses can be brought to see that the largesse of our political and public sector actors with our money can and should be curtailed. Without this we can hardly hope for folks to put their own fiscal desires in order.
I also believe that this is not a problem which can be solved by individual heroes who will come forward at election time, agree on an agenda and change the way things are happening now. What we have now are heroes put forward on their own initiative or that of a relatively small segment and, not having much in common, they tend to operate as loose cannons in which neither business nor the commons can have much confidence.
As dangerous as it is, there is a reason why political parties exist. Cooperatively they can vet candidates on the basis of their ideas, they can raise funds for elections, they can provide research for their elected officials and, perhaps most importantly, they provide a known quality and quantity to candidates and can exercise control on their elected officials between elections. The present system in Nanaimo divulges the place from which candidates derive their backing only to those who are a party to it or those who actively seek it out, a remarkably small percentage of our citizens.
Ron; I assume you are,once again, advocating a party system at the Council level of Government?
Whilst I can appreciate where you are coming from I cannot bring myself to support someone who moulds his / her reasoning around an ideology.
Faith based decision making does not work!
Yes, you read me correctly. I am, once again, advocating a party system for all the reasons which I gave. This does not mean that I think it is a panacea. I further believe that anyone who looks at our parties at the provincial or federal levels does not see monolithic thinking, but rather a forum for the organization of basic principles, whether of the right, the left or the centre and the expression of the consensus developed around those principles to move forward. Parties are subject to closer scrutiny and debate than currently takes place in Nanaimo where pretty well everyone knows the bent of our Council members, but cannot pin them to anything and thus no foundation for the discussion of issues is available. Even great athletes do not necessarily make a great team. Look at where we are at. Nine perfectly capable individuals which make up a team that cannot shoot straight.
If we are going to be dealing with unorganized amateurs in any event, I’d opt for an approach like that of the military draft. Names of qualified citizens would be put in a hat and a given number of individuals would be picked for a two or three year period. These folks would not have to find backers who put up money for their election and would not owe anybody – at least at the start.
And isn’t faith based decision making what we have now? Only we have nine different faiths involved.
Similarly we should demand the ability to recall Councillors who, for whatever reason, have lost our trust. Have you stopped to consider that the property taxes paid by municipal citizens, whether owners or renters, is paid by each and every resident (aside perhaps from the homeless) of a city. Significantly fewer pay provincial or federal income taxes. It seems egregious that an MLA can be recalled, but a City Councillor or Mayor cannot.
What makes anyone so sure that ANY elected group or non-elected group can really bring about real change, when the issue is an entrenched bureaucracy that is neither accountable nor responsible to the public they claim to ‘serve’.
As to the legitimacy of our fiscal system, the way the crisis in ’08 was pretended to be handled proves that the monetary system is only so much smoke and mirrors which only operates on faith in the system. Who will ever repay all the bazillions that all nations are carrying on the books? It will never happen, there will simply have to be a clearing of the slate on day and we or the next bunch can all start over again, maybe beads next time?
Jim: I don’t know of anything that is guaranteed other than the proverbial death and taxes. But is that a reason why we shouldn’t try when we feel that things are not moving ahead as we would like? And despite its default, Council has the legislative power to control a bureaucracy whether entrenched or no. That it may not have the backbone or the knowledge or the confidence to manage is a circumstance, not a necessary condition. And I suggest that a political party could be of assistance in overcoming these shortcomings.
As for the legitimacy of our fiscal system and its pretenses, I leave these to others of broader horizons and would be happy if we could simply keep our own house in order.
Ron, re legitimancy of our financial system & it’s pretences etc etc..
With due respect; this is the problem.
Nanaimo does not exsist in a vacuum!!
Many of Nanaimos woes are due to it’s ignorance of world events!
Nanaimo built a convention centre when conventions are declining.
Nanaimo built a cruise ship terminal when the market was saturated.
Nanaimo promoted! and was willling to provide the infrastructure for Cable Bay Golf at a time when golf has been in decline for over ten years.
There are many things that are outside the control of our local decision making but to ignore
the realities around us leads many of us to conclude that too many Council/staff decisions are made for ulterior motives..
May I add; do Nanaimo residents not vote beause of apathy or because they see through the sham?
Jim Taylor 15 September 2012 at 2pm – “ … when the issue is an entrenched bureaucracy that is neither accountable nor responsible to the public they claim to ‘serve’.”
Isn’t “transparency” mandatory for real accountability? Whether one is referring to the operation of a registered political party, a neighbourhood association, or elected officials and bureaucrats, IMO, the principles are the same.
Janet: Agreed. Transparency if a necessary, but not a sufficient condition for accountability which also requires accounting. Even if the books are available, if they are not examined critically we get Enron, Bernie Madoff, etc.
Trailblazer: Nanaimo may not exist in a vacuum, but neither is it a vacuum. To a large extent Nanaimo has the ability, if not necessarily the recognition, that it can, if not too fully enmeshed in the fantasies of consumption without limit, control its own destiny to a significant level. To think otherwise is to believe that we have no choices but must drift like leaves in the wind. As you point out, Nanaimo has made some poor choices that we are living to rue. However we do not need to continue making such choices which see growth as an end in itself. The idea that growth can be infinite and that it increasingly reduces, rather than increases, risk is untenable as we are about to discover.
I agree with you that the world offers many diversions, but we have a choice to more or less follow them or to more or less ignore them. Your point about ulterior motives is, I believe, a potent one. Motives lie behind all decisions and they may be more or less open to scrutiny. For this reason I believe that transparency and attention to its results are imperative for bringing motives to the surface. In my opinion a belief in growth as a primary strategy lies behind many of the decisions that are going to bring this town to its knees -and we will not be alone because this strategy is as widely accepted here as it has been elsewhere. It needs far greater scrutiny.
My question remains, regardless of how we define the basis for our problems, what are we going to do about them? And is there a single simple answer? I suggest that there is not and that we need to explore a wider set of problems.
In response to your question about the low voter turnout in Nanaimo, I would contend that it is simply that there is no real venue for debate on the issues and that election results are more or less random events with the feeling on the part of voters that voting doesn’t make a difference. Which leads me back to political parties as a means for defining policies….