Looking at the budget from the Top Down

Ron Bolin: Dec. 6, 2015

At the COW meeting of Nov. 23, 2015, at 2:47:47 into the portion of the meeting devoted to a Town Hall,


a gentleman spoke the words that many had been thinking: Why don’t we look at the City Budget in the way that Nanaimo households and businesses must look at theirs, i.e. :What is the sum of our assets and liabilities; What are our necessities; and what do we want to do with what is left over (if anything is left over)?

What he and many in the public, including this writer, would like to see is a top-down view of City spending. If I come to the family table to discuss our budget and I throw the whole pile of income and expense receipts and invoices on it, I am sure to start a discussion about which toy or sports equipment or entertainment we could forego… usually those wanted of others… and the entire discussion very soon descends into a meaningless cacophony of charges and counter charges which ends with all leaving the table is disgust and leaving any serious discussions for next year. There is a case to be made that this is what has happened in budget discussions at City Hall over the last few years.

The alternative would be to present an overview of our financial information which starts at the top and works its way down at the end of a critical examination. This is the method that one sees coming from those individuals and agencies that work with either those who want to plan for their future or those trying to stave off bankruptcy. This process doesn’t, in the end, make hard decisions easier, but it defines the parameters around them which must be faced.

I’d like to suggest that starting our discussion of the budget and financial plan at the top with our annual income, expenses and asset and obligation positions would allow us to reach some general agreement before we get to the inevitable struggle over details. Accordingly I would like to suggest a budget layout which begins with the following simple basics.

Income = Taxes + Fees + other income;

Expenses = Salaries + Benefits + Asset Acquisitions + Debt payments + Present Asset Maintenance + external products and services;

Savings = Reserves including DCCs;

Debts = Obligations owing including loan repayments and future asset maintenance.

[Please note, the writer is not an accountant and any help in these definitions from those who are would be welcomed.]

With such basic figures at hand we can begin to examine the amount of money which we actually have to discuss after we meet our present obligations and begin the difficult discussion about how to spend what remains (if any) to the best advantage of all our citizens in light of their ability to pay. (Let’s not forget that municipal taxes and fees, like sales taxes, but unlike income taxes, are borne by the poor as well as the rich and that Nanaimo is close to the bottom of the poverty heap in BC.)

Let’s give it a try this time around and see if we can’t do better than ending in frustration unsupported by any progress in understanding. I am sure that our Finance Department can readily derive these figures with a few strokes of their computer keyboards.

Your comments on this suggestion are desired.