Midlandcommunity.ca had a busy month attending various Council meetings including Council’s preliminary meetings about the 2015 budget. While it is the new Council’s mandate to approve the 2015 budget, the current Council normally begins the process. The early numbers look like a 0-2% increase but Kevin Cowie challenged Council at a public forum to approach budget-setting with more rigour and vigour. He suggested Council and staff go back to the year 2000 and identify where all the millions of additional spending occurred at a time when our population was shrinking. Some believe several millions can be stripped out of the operating budget by targeting the areas of recent excess spending. We think you will find Kevin’s remarks below enjoyable and insightful.
At Council’s regular September meeting Roy Ellis made a deputation and challenged all Councillors in “Engaging the Community to Create a Sustainable Local Economy”. His deputation slides are available at http://bit.ly/1mpM4hb and his full speaking notes can be viewed by opening this link http://bit.ly/1vtpKF7 .
We look forward to seeing you at the “Meet & Greet” candidates nights at the NSSRC on Oct 6th (for Ward Councillors) and October 7th (for Mayor and Deputy Mayor). More details to follow.
Speaking notes provided by Kevin Cowie:
For ten years or more, Midland Town Council was over-zealous in its desire to provide premium big-city services in an economically depressed small town. Thankfully, over the past four years, this philosophy has shifted to a more sustainable approach; however, the steps taken to date will not restore us to fiscal sustainability.
Since the year 2000, local taxes have increased 116% while inflation, household growth and declining population would explain only about a 40% increase. This leaves us with an unexplained 76% increase in town spending. Understanding and then reversing this portion of the increase must be the next priority of our Council. Rather than shooting for smaller annual increases, the target must be a significant tax decrease. Otherwise, Midland will remain handcuffed by its high tax rates and the associated barriers to entry, perpetuating a spiral of economic recession as businesses and residents locate to other communities in Ontario or even elsewhere in North America.
Think of it this way. If you avoid a supermarket because their prices are too high, would you start shopping there simply because they promise to keep future increases within inflation? Of course not. You will only begin to give them your business when they reduce their prices to competitive levels. Midland is that expensive supermarket, and new residents and jobs will not flow here until the price of living or running a business comes down dramatically. Sadly, just as high food prices are the hardest on those who can least afford it, the lowest income residents also bear the greatest burden from the impact of high municipal tax rates.
So can all of this unexplained 76% increase be reversed next year? No; in fact, a small part can’t be reversed at all because it is due to factors beyond the control of the municipality, such as provincial downloading, mandates for enhanced IT services and similar obligations that the town didn’t face in the year 2000. Some of it is due to long-term commitments that we simply can’t dismiss overnight, such as the debt and operational costs of the North Simcoe Sports and Recreation Centre, or the library, or ownership of the future Midland Bay Landing property. In these cases, Council must draw up a long term plan to reduce and eventually eliminate the excessive costs of these facilities as well as exploring new revenue models to fund them.
But these structural items don’t explain most of the tax increase. In the vast majority of cases, you can look back to find out what it took to operate the town in 2000, how those activities were managed within less than half of today’s budget, and where the additional padding in our infrastructure can be found. Any business manager will tell you that, after such a period of unchecked spending increases, there will be many opportunities to reduce costs without impacting quality or level of services.
This exercise won’t be easy. The detective work to identify where costs have been added will be difficult, and turning the ship around will be a challenge. It will take all of your creativity, your energy, and your fortitude in the face of resistance. You will face brick walls and diversions along the way, and every interest group will lobby to protect its own domain, but you are the only ones with the authority to do it. Reach out to veterans who can help you including both active and retired business people who have been through this exact experience and are passionate about the prospects for this town. Get the job done, but don’t do it for me or for yourselves. Frankly, you and I are among the fortunate few who are reasonably well off and can afford our taxes. Do it for the benefit of our pensioners, our unemployed, our working poor, our young families starting out, and the next generation coming up through our schools.
I understand your reluctance to pass a budget that the next Council will have to live with; however, you can set the wheels in motion. Call for a review of the decisions that resulted in a 116% tax increase. Begin to identify how we operated with a much smaller budget in 2000. As a starting point, direct staff to identify cost reductions of 10% rather than cost increases of 0%-2%. Draw the road map to financial recovery so, in November, the next Council can hit the ground running in the right direction.