Midland Town Council has begun its work to set the Town’s operating and capital budgets for 2014. Council’s first meeting on September 11th dealt with the operating budget and a lot of work still needs to be done to create a budget that is responsible and fair to the people of Midland.
Here are some key facts and observations:
1) Council previously directed Town staff to prepare two budget scenarios – showing both 0% and 2% increases in the operating budget over 2013.
2) On September 11th, Town staff presented Council with a single draft budget showing a 3.91% increase even before a list of additional items that add up to another 2%. As it stands now, if all of this gets approved, the overall operating budget will rise approximately 6% ($1 Million) from last year and local taxes will rise accordingly.
3) The Fire Department is asking for an increase of 2.35%. Not only is this number above both the 0% and 2% targets but the Fire Department should be able to show leadership this year since it received a budget increase last year of 2% followed by a mid-term increase of another 5%. A two-year total increase of 9% for Fire is simply unacceptable and irresponsible.
4) Police are looking at a 2014 spending increase in the 1.7% to 1.9% range stated Police Services Board Chair Kathy Willis. This follows a 2013 increase of 5.6%. Averaged over two years this is way more than most residents of Midland see in their pay or pension cheques. While we can hope this marks the beginning of a new trend in Police budgets, it is all premised on Police wage and benefit increases being held to 1% next year. According to Ms. Willis and the Police Chief there is only “agreement in principle” to the 1% increase for two large Police employee groups and thus no certainty. This lack of certainty is one reason we often have last-minute or mid-term budget surprises. It is mistaken efficiency to rush to complete a budget if surprises are waiting around the corner.
5) On the subject of surprises, it appears nobody has been warning Council or the public about the depletion of Development Charges reserve funds that have been used for several years to offset borrowing costs in departmental budgets. Development Charges are the money new home buyers in Midland pay as their contribution to the capital cost of existing or planned infrastructure such as roads and recreational facilities. The Parks and Recreation budget for 2014 loses $133,000 in Development Charges revenue to help pay the debt on the NSSRC because the money is no longer there. Making up for this means revenue has to increase or spending has to decrease or a combination of both needs to happen. Of course the easy way to increase revenue is to just dump the problem on taxpayers.
Parks and Recreation’s budget request for 2014 now stands at 5.43%. The elephant in the Parks and Recreation budget remains the NSSRC. Total spending for the NSSRC is projected to be more than $2.1 Million with revenue offsetting only $815,000 (about 38% of the total). This leaves a deficit of $1.3 Million that gets dumped on Midland taxpayers even though at least half of all regular NSSRC users live in Tiny, Tay and Penetanguishene and contribute nothing towards this deficit. Clearly a new, sustainable business model needs to be developed and Council needs to resist ad-hoc, band-aid solutions that fail to address the real problems. In the meantime, Council will be acting on a recommendation from the Department Head to hold a closed meeting to look at ways to get the budget increase down.
6) The Library budget is about $1 million annually representing about 5% of our local taxes. Their 2014 budget request currently exceeds 4%. Average residents of Midland are not going to see anything like a 4% increase in their incomes so why should it be acceptable for the Library to spend at rates much higher than inflation?
To summarize, a 6% spending increase next year would return us to the dark days of previous Councils that failed to restrain spending or understand the challenges facing residents. Our local economy continues to struggle, good-quality jobs are scarce and household incomes are low. When Town staff is instructed by Council to model 0% and 2% budget increases, it wastes time to present increases of 4% to 6%. The Department Heads need to go back to the drawing board and get the job done. They are the ones with the knowledge, talent and responsibility to recommend the best ways to achieve Council’s goals. They need to focus on making wise changes to how our Town operates.
The main challenge and opportunity here is GROWTH. Development Charges are depleted because there is not enough recent growth to repay money Midland borrowed years ago. Town budgets need to remove all unnecessary costs and spending needs to focus on driving growth and economic development. Unless new money is coming in, there should be no more money going out. That is how almost all of us have to live our lives every day – adjusting what we would like against what we can afford.
Budget deliberations continue this Thursday, September 19th at 6:00 p.m., when Council considers the capital budget. Next Wednesday, September 25th at 6:00 p.m., members of the public have an opportunity to make submissions to Council on the budget. We hope submissions from the public will help Council do the right things and not just the easy things. And we hope for much better results as work continues on the 2014 budget.
Roy Ellis and George Dixon on behalf of Midlandcommunity.ca
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