Letter to the editor: Annual ritual of trying to justify yet another municipal tax increase has begun

The annual ritual of trying to justify yet another municipal tax increase has begun at City Hall.

Ignoring her mandate to protect the interests of the public, Deputy-Mayor Vrebosch has leaped to the defence of the budget brought down by City staff. This will once again be followed by the Mayor and the majority of council falling into line and voting to ignore taxpayers’ interests.

The last decade under Mayor McDonald and this council has seen taxes increases at over two and half times the rate of inflation and included a number of inane decisions which can only be explained as incompetence or undertaken for self-serving purposes or both.

Protecting taxpayers’ interests is of course the one and only reason we go to all the trouble of electing a council. Otherwise why not just hire people to run things the way they see fit and send us the bill.

The continuing practice of some voters to treat elections as popularity contests and elect various people on name recognition has left taxpayers with a group who are simply not qualified. The failure of council members to educate themselves and become at least semi-cognisant with the most basic financial tenets is telling

According to Vrebosch, "The first two years we were hoping to invest in growth and the last two years we were hoping to reap the rewards of the benefits of growth.” The fact that the Deputy-Mayor still has not figured out that new growth is not new money and continues to promote this fallacy being promoted by the CFO and other senior staff  illustrates how little she has learned and why taxpayers have been poorly served by her and other elected officials who have bought into this lie.

Here is a quote taken from the Niagara region website which illustrates the effect of new assessment growth: “It is important to note that assessment growth does not result in more income for the Region. New home values in a community may redistribute how much each homeowner must pay, but no new money is collected.”

The Deputy-Mayor’s statement that: “We started off four years ago with goals we wanted to accomplish — mainly ... to get the 10-year budget back in line and back to being balanced," is redundant and meaningless. There is a Provincial requirement that all municipal budgets be balanced, in other words, expenses must equal revenues. Municipal budgets are never “unbalanced”.

In defending the budget increase, she indicates: “We have to meet expectations from the public. We have to have the roads plowed, safe playground equipment, the trails have to be kept up, and sewer and water have to be kept up.”  

Apart from the fact that sewer and water rates are additional to and completely separate from the tax levy, snow removal costs represent only 3.5% of the entire City budget and the dollar amount for snow removal is actually less than it was in 2018. This continuous attempt by Vrebosch to support tax levy increases by using the spectre of citizens trapped in their homes because of a lack of snow removal funds has no basis in fact.

“As much as we would have wanted a zero or one per cent increase, that’s not realistic,” she said. “If you have a zero per cent increase one year, the next you’re going to have eight per cent.” Here Vrebosch is parroting a myth offered by the CFO on a number of occasions which is based on the false assumption that expenses can never be reduced or eliminated. The average cost of salaries and benefits per employee at City Hall reached a new high this year at $104,000 thousand per person for 424 employees.  This is an area where applying some common sense would be helpful.

Vrebosch states that the pandemic, now in its 22nd month, is “lasting longer than anyone expected.  Luckily for us, we have the reserves to offset part of that impact, as long as they are used in a 'fiscally prudent way.'”

Reserves amounted to almost $23 million in 2012 and have been increasing every year since then and now amount to almost $45 million.

City administration has, with the acquiescence of council been increasing the reserves willy-nilly at a cost to taxpayers and using them to manipulate operating budgets rather than for their intended use which is to protect against unseen financial events. Council has been impotent in speaking up against this practice to the detriment of taxpayers.

The worst example of this is the inclusion of $5,000,000 borrowed by NB Hydro and given to the City and actually used as revenue to cover current expenses.

This type of practice, on top of being in violation of the Municipal Act and fiscally idiotic, causes the problem that the Deputy-Mayor describes as “weaning ourselves off” reserves. This would never be an issue if reserves were funded and used properly. Reserves that are part of a revenue fund do not earn interest on their own. Any earnings derived from the investment of reserves' money are to be reported as revenue in the operating fund.

City administration has been ignoring this requirement and has actually been charging taxpayers interest on their own money as well as adding it to reserves. This represents another unsupportable decision by the Mayor, Vrebosch, and previous councils which has increased taxes by over $2 million during the past 10 years.

Like every municipality, North Bay has many problems some of which are intractable. The extra tax burden created by the actions of the current administration coupled with their Pollyanna attitude continues to be costly and galling to taxpayers.

Don Rennick

North Bay