TODAY’S ENTRY #945: It’s quite simple, at least the way Martin Hayward, the city treasurer, describes it. Just make some cuts, agree to some add backs for growth, then decide how to fund special requests. You might find it a little more difficult.
Thursday, Dec. 5, 2013 - London
A budget the size of the City of London’s is a lot like a big jigsaw puzzle. At the beginning there’s a jumble of disconnected and disorganized pieces. But by applying logic, first the borders and then the interior of the puzzle takes shape and, ultimately, is solved.
Martin Hayward, the city’s treasurer, not only puts his budgets together that way, he then deconstructs them piece by piece so citizens can follow his logic.
The key to the completed puzzle, shown in one of the overheads Mr. Hayward used in his presentation to city council on Tuesday, was titled ‘Path to the Submitted Budget’. It’s quite simple, at least the way he explains it: Make some cuts, agree to some add backs for growth, then decide how to fund special requests.
Of course, in the political realm, the reality is not quite so simple. Each cut hurts someone; each add back costs us all; each special request has its friends and foes. And waiting out there less than 11 months from now is the next election.
But why should city council have all the fun in solving the budget jigsaw? So for your enjoyment these dark evenings of December, here is Mr. Hayward’s budget jigsaw puzzle. The solution is found in three steps, decision points as Mr. Hayward describes them. Be forewarned, though, there is a puzzle within the puzzle and not necessarily only one correct answer to anything.
The end game to the budget puzzle can be just about anywhere. For simplicity, Mr. Hayward uses zero, or the 2013 budget as a baseline – although he’s not necessarily an advocate of a tax freeze. The starting point is 4.2 per cent or $20 million above that.
To play, you need to go here and open up the various business cases developed for every single decision required in this budget.
Decision Point 1 – Business Cases 1 – 13.
The first step, Decision Point 1, is to decide whether all or some or none of a package of services costing $4.9 million should be removed from this budget. Council will vote on them separately. Here’s the group:
Case 1, cut Downtown London Business Improvement Area grant, ($53,000); 2, eliminate planned increased contribution to economic development reserve fund, ($1 million); 3, reduce contribution to sanitary landfill reserve fund, ($255,000); 4, reduce Upper Thames River Conservation Authority contract for managing environmentally sensitive areas, ($72,000); 5, add a curator for Eldon House, $59,000.
Case 6, reduce landfill site property acquisition, ($200,000); 7, reduce bus renewal program, ($500,000); 8, reduce arterial road rehabilitation, ($1.7 million); 9, delay Glen Cairn major upgrades, ($125,000); 10, reduce floodplain acquisition, ($200,000); 11, delay downtown on-street pay & display parking, ($175,000); 12, reduce bike lane program ($200,000); 13, cut facility energy management, ($500,000).
If you did all of those things, you would reduce the budget increase to 3.1 per cent.
Decision Point 2, Business Cases 14 -30, and 31 - 40
The second step is to decide whether to use all of the revenue from assessment growth to fund projects in areas of the expanding city. Assessment growth, Mr. Hayward notes, “refers to property taxes levied on new homes and businesses, which expect to receive the same municipal services that existing taxpayers receive.”
In previous years, instead of spending all this ‘new’ money on infrastructure and services for growth areas, some has been used to pay for other portions of the budget and thereby reduce the tax rate. Mr. Hayward is not recommending that course.
Instead he says all of the $7.261 million should be used to fund transportation services $4.280 million; parks and neighbourhood services $1.033 million; protective services $900,000; environmental services $477,000; culture, planning and operational services $571,000.
You can pick and choose here, but remember residents in the newer areas won’t be happy with you if their garbage isn’t picked up, streets aren’t cleared, police and fire protection is tardy or parks are muddy, unkempt fields.
The assumption is you will accept this entire slate since it is neither adding to nor subtracting from the overall tax increase.
Decision Point 2A, Protective Services
This step isn’t included in the jigsaw puzzle Mr. Hayward presented to council this week; however it’s the only game in town as far as Mayor Joe Fontana is concerned. In fact, he wants to start building the jigsaw puzzle right here.
Here’s the issue is several nutshells. Protective services – police, fire and bylaw enforcement – eat up almost 31 cents of every dollar raised in property taxes. Mayor Fontana calls that “unsustainable.” He wants to cut these budgets, a consequence of which, he has been warned, will be layoffs of police officers and fire fighters. At least two councillors, Nancy Branscombe and Bud Polhill, say they would support no increase at all in these budgets for 2014.
London Police Service has proposed a budget of $92.882 million, up 3.3 per cent from 2013. London Fire Department has proposed a budget of $56.727 million, up 4 per cent from 2013. In both cases, the largest single budget item is personnel.
There are other things you could cut besides police and fire services. London Transit wants a 2.4 per cent budget hike, to $26.096 million; the public library wants 1.8 per cent, to $18.713 million. Roadworks is going up 1.3 per cent, to $38.498 million. Reserves are increasing by $4.731 million.
Decision Point 3, Business Cases 41 – 58
The third step is to decide which of the commitments, promises or hints council has made over the past year about various projects, programs or initiatives will now be honoured.
There are two categories: Strategic investments which total $16.5 million (cases 41 – 49), and so-called ‘emerging issues’ which total $1.775 million (cases 50 – 57). None has yet been included in the 2014 budget.
The strategic investments include: buying industrial land, $4 million; medical innovation network, $1 million; performing arts centre, $1 million; transportation master plan $8.2 million; and Ontario Works decentralization strategy, $2.3 million. The cost of all this would add another 3.44 per cent to the tax increase.
That, obviously, would be too much for taxpayers to accept in an election year. Instead, Mr. Hayward suggests we reconsider the 1 per cent economic levy first proposed – and shot down in flames – two years ago. This would “accumulate funding to support strategic investments as council continues to receive information on these initiatives and decide on the highest priority items,” Mr. Hayward says. Such a levy would raise about $4.5 million in year one.
Cost of the emerging issues would add 0.37 per cent to the tax rate. This list includes: Case 51, Huron Street improvements, $500,000; 52, safety issues for railway pedestrian crossings, $135,000; 53, noise wall for Veterans Memorial Parkway, $500,000; 54, traffic calming program, $25,000; 55, sidewalk maintenance program, $315,000; 56, Emerald Ash Borer tree replacement, $200,000; cultural prosperity plan, $100,000.
Again you can add any or all or none from this list. Anything you add, however, will require funding in the budget.
So there are the pieces for your budget jigsaw puzzle. Enjoy.