The Dog that Didn’t Bark…

Posted by on July 7, 2014 in CITY FINANCE | 3 Comments

Ron Bolin: July 6, 2014
One of the most popular Sherlock Holmes short stories, “Silver Blaze” focuses on the disappearance of the titular race horse (a famous winner) on the eve of an important race and on the apparent murder of its trainer. The tale is distinguished by its atmospheric Dartmoor setting and late-Victorian sporting milieu. It also features some of Conan Doyle’s most effective plotting, hinging on the “curious incident of the dog in the night-time:”

Gregory (Scotland Yard detective): “Is there any other point to which you would wish to draw my attention?”
Holmes: “To the curious incident of the dog in the night-time.”
Gregory: “The dog did nothing in the night-time.”
Holmes: “That was the curious incident.”[2]

This curious observation could equally be made about Nanaimo’s 2013 Annual Report and 2013 Statement of Financial Information adopted at Council’s June 23, 2014 meeting. What was curious about their adoption was that there was no discussion of either document: just a quick unanimous show of hands and on to the next agenda item. This is the favoured course of action in dealing with the major financial documents which define Nanaimo. One would think that these documents which sum up the past year of our City would not slip by uncommented. It is as if there was nothing to be learned from last years’ experience which might help us in the next.

 

It has often been said that those who ignore history are bound to repeat it and so it seems to be in Nanaimo. In the past few years we have had a number of financial decisions about which the best that can be said is that they were questionable. We all remember the exponentially expanding conference centre which grew from $5 million to $72.5 million (a figure itself open to question) in just a few years, rested on an illegitimate 52/48% referendum (later legitimized by our Provincial government “partners”), followed by no new referendum being called after it was found that there was an error in estimation of 40% ($20 million) in the $52.5 million which had been touted up to the referendum: And then there is an untendered Annex; a Colliery Dam spectacle which continues to irritate, but like the Leadercast fiasco, cannot hope to create a pearl; and a second municipally owned theatre with known present costs as well as serious estimated future costs about which Council waffles, and there are more “deals” waiting on the back burner for Council to come up with our promised List of Priorities. Don’t hold your breath for this one.
Council is quick to proclaim its dedication to prudent spending in governing our City. Yet when last year’s financial reports came forward, it showed no inclination to examine what went wrong in the last year and should not happen again or what went right and should be repeated or preserved in 2013 before passing the 2014 budget. Several Councillors, quite correctly in my opinion, have for years called for a formal examination of Nanaimo’s annual expenditure of City funds by means of a “core review” of the City’s activities in order to gain a greater perspective on our priorities. Yet at the time when the summary of the past year was put before them, even they skipped the opportunity to discuss those problems or suggest improvements.

[A few years ago a core review of the activities of the City of Penticton which led to several years without property tax increases was undertaken which was based on assigning each operations unit in the city to one of three categories:

1. Mandated Service: This service is explicitly mentioned as a required service in the Community Charter and/or the Local Government Act
2. Foundational Service: This service is not explicitly mentioned, but is considered a bare necessity service for the city’s residents and for internal city operations
3. Discretionary Service: This service is not mandatory and the city has significant discretion in determining whether the service is even offered by Penticton]

Nanaimo’s 2014 budget and 2014-2018 financial plan were approved on April 28, 2014. The 2013 Annual Report and the 2013 Statement of Financial Information (SOFI) were approved on June 23, 2014, two months after the 2014 budget was adopted. Now it MAY have been reasonable in the days of snail mail and arduously tended manual ledgers that it took a great deal of time to cobble such reports together:  But in our age of computers and financial accounting systems for which taxpayers pay millions of dollars, why this delay should be acceptable demands serious attention.

[Late release of these reports is possible because Provincial legislation gives a municipality six months to approve and release them.]

Thus it is that a new budget is approved months before the documented record of the old has been approved and made public.
This practice is patently outdated, depends on out-of-date legislation, and can and should be remedied by our Council before this situation plays out again. Signing on to a new budget before we have had time for contemplation of last year’s final results is not only absurd, but has a simple remedy. Council is quite capable of mandating earlier deadlines than those demanded by provincial legislation though they are not supposed to exceed them. But then, as we saw in the case of the Conference Centre referendum, the provincial glove is quite adept at accommodating municipal fingers without overly concerning itself with how the flesh and bones may be pinched.
We will have an election and a new Council in about five months. We will start on a new budget in about six months. On January 1, 2015, Staff will start spending based on the 2015 projections in the 2014-2018 Financial Plan. When will the 2014 Annual Report and the 2014 Statement of Financial Information be released? When will the new and “improved” 2015 budget and 2015 to 2019 Financial Plans be adopted? Undoubtedly on the same tardy schedule of 2013 if the dog doesn’t bark.
Your comments and observations about the financial reporting process are solicited.

Your suggestions for dealing with it even more so.