Editor's note: Mr. Rennick is referring to this BayToday story. WSIB to blame for 'glitch' — City still responsible for shortfall
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The fact that a WSIB premium error was discovered at the last minute does not change the reality that this year’s levy increase is currently 4.24% which brings the total increase for the past three years to over 15%. By comparison total increase in Inflation for the past three years was 4.9% and is currently running at 0.00%.
Budget preparations currently begin in the fall and reports are presented to council in October or November. Postponing council level budget discussions until after the end of the current year would provide more accurate information and assist council in arriving at sound decisions. The budget issue created by the $825 thousand WSIB error is just one reason why the operating budget finalization and approval should not begin until well into the actual budget year.
At present, budget documents only provide actual revenue and expenditure figures to the end of September. Actual results to the end of December would provide a better tool for council in determining the accuracy of budget estimates for the following year rather than making decisions based on the previous year’s guesstimates.
The Municipal Act indicates that the previous year’s surplus amounts are to be included in the following year’s budgeted revenues. The current timetable makes that impossible and all surplus amounts end up being transferred to reserves. The City currently has over $47 million in discretionary reserves. All of this surplus money was contributed by taxpayers and the resulting reserves are now being used by senior staff to manipulate department budgets rather than the manner for which they were mandated.
When budgets are prepared before the actual results for the current year are known, the new budget figures can only be compared to this year’s budget figures. Comparing last year’s guesses to this year’s guesses provides a distorted view of reality. Actual results from the previous year must be used in order to provide an accurate understanding of the increase in the tax burden.
The WSIB error also raises another issue and that is the amount of premiums being paid out each year for compensation claims. Based on the shortages being reported, amounting to $524 thousand and $277 thousand for the City proper and the Police department respectively, it appears that something needs to be done to lower these costs. One obvious solution would be to obtain a costing from the OPP and replace the City force with that regional force.
Here are some suggestions for council to restrict this year’s budget increase to a less than 1 percent increase over last year’s guesses. Number one of course is to delay any further budget discussions until we know the actual 2020 figures. Have staff prepare new budget documents including the actual figures for 2020.
Eliminate some recently added positions and reduce costs by approximately $500 thousand this year and more in following years. The following employee positions have been added in the past few years and do not provide a service that benefits taxpayers directly and can easily be eliminated. Communications officer; Paralegal; Deputy clerk; Bylaw officer; Financial Reports Co-ordinator; Property standards person. These yearly personnel additions, which are euphemistically called “service level changes”, simply represent increased costs for services already being provided.
There is no evidence that the Economic Development department has produced benefits anywhere commensurate with the costs to maintain it. It would seem sensible to stop wasting money on this endeavour. The department employs six people with an average wage and benefit package of $111 thousand each. The entire department could be disbanded but for the sake of argument let us presume a reduction of 50% of the $883,000 yearly budget. This wouldn’t result in a $440 thousand saving and any “reduction in service” would be obvious to anyone.
The Community Development and Growth /Invest North Bay department employs one person with a wage and benefit package of $203.000. The Invest North Bay contribution is set at $140,000 per year but has cost taxpayers much more over than that over the past five years. The benefit to taxpayers for this expenditure is virtually zero. Eliminate both the department and Invest North Bay for a savings of $343,000.
Reduce the capital levy which is $2 million higher than last year by at least $1 million.
Eliminate the net $1.1 million discretionary transfers to reserves included in the 2020 budget.
The increase in the tax levy over the past three years has been approximately $13 million. That is a 15% increase which is well over three times the rate of inflation. City operating expenses have risen from $1,329 to $1,819 per person over the last nine years. The line item responsible for over half of that increase is the capital levy which has gone from $7 million in 2018 to almost $14 million in 2021. The Police budget and DSAAB budgets are responsible for almost half of the remaining increases that occurred during that period.
In order to get a handle on tax increases for future years, we have to lower wages which in 2021 will account for 47% of all City department expenditures.
In 2019, at $31,384,248, police and fire wages and benefits accounted for 46% of the total wage burden. We also need to get an OPP costing to lower policing costs including WSIB. We definitely need to establish a hybrid volunteer fire department. Additionally, we need to bring to stop wasting money in the fruitless pursuit of growth and discontinue the fallacy that somehow growth is the answer to our taxation level problems.
We need to hire a senior city staff that will provide professional reports containing information that is relevant and readable instead of those that seem to be designed to baffle understanding and minimize the amount of rising tax levies.
Once we reduce spending and tax increases to manageable levels maybe we can start looking at luxuries such as a new arena.
Don Rennick
North Bay
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