Setting aside the fact that Rothesay’s process for developing priorities is clearly not open government, what can we gather from their list?
From the 10 page document adopted by Council, the very first is:
“To adopt a long term, sustainable fiscal strategy based on sound principles“.
This priority should resonate with anyone concerned about town spending. Applying discipline to spending is a no-brainer. But fiscal policy is more than taxing and spending.
Policy wonks know that fiscal policy looks at revenue collection and spending. But it also considers the impact these have on the broader economy (or in the case of a municipality the community).
In getting to that long term fiscal strategy, the first question Council wants answered is:
“What are the financial principles that should be followed in governing the Town?”
Council should be commended for seeking to adopt sound financial principles. Although, at the risk of being picky, I wonder if answering this question should have been the first order of business last June or at least before council approved the spending of nearly $17,000,000.00 in their first budget last month?
Anyone who is responsible for a household budget understands that we need to live within our means. When council spends other peoples’ money they need to know a whole lot more because they must be accountable for spending public money wisely. Accountability comes in part, from transparency. Council hasn’t made transparency one of its priorities and it should be.
In any event, let’s hope the development of a sustainable fiscal strategy moves quickly as it should improve all spending decisions, ensuring that taxpayers and residents get the services they need at a cost they can afford.
In making a case for sustainability, Council should also take a close look at the capacity of residents to absorb constantly increasing property tax bills. The Mayor’s focus on affordable housing and services to seniors are noble causes. But, if out-of-control spending pushes property tax bills up faster than seniors’ ability to pay, then that creates hardship both for seniors and anyone who lives from paycheque to paycheque.
Council’s finance committee should take a careful look at our town’s changing demographics. Young families and seniors both find themselves frequently on the lower end of the affordability scale. Seniors are growing as a share of Rothesay’s population and are more likely to be living on fixed incomes.
If council is looking for guiding principles, how about planning with the assumption that budgets will be constant or at the very least will only increase through organic growth of the tax base not simply inflation in the housing market.
Getting town spending back in line with taxpayers’ ability to pay should be a principle that Council adopts without further delay.
For those who campaigned on holding the line on taxes, this is one way to honour that promise. Cost control and more disciplined decision making are all part of the process.
If Council wants “…capital expenditure decisions to be reached for optimal outcomes”, which is an excellent goal, then Cost/benefit studies of all large capital expenditures should be required as part of the business case. This would give councillors a better understanding of impacts before decisions are made. Council has, in the past, approved capital spending without a clear picture of operating costs.
If the last council had made decisions that “optimised outcomes”, we might not have seen Town spending on operations increase at three times the rate of inflation since 2009.
Since I began following council in 2009, I haven’t seen a real business case made before councillors signed off on any big ticket recreation project. On the contrary, the memos from staff for the Common’s project for example, did a poor job of accurately forecasting operating costs for the rink. They were almost double what was budgeted for last year.
I don’t believe, based on council’s current priorities, that there have been any lessons learned from that experience. Reckless spending is set to continue with the Arena project and the Field House (by another name) still consuming resources and the attention of Council. Other boondoggles include the million dollar plus and now grandly named, “Wells Link”, a pedestrian walkway planned to cross the road to the airport. It might end up being called the Wells Sink as it is set to consume so much of our remaining scarce resources. (more about these in the post on Recreation priorities).
Hopefully the question of how capital expenditure decisions can be optimised will be answered before another capital spending decision is made without a proper business case.
If only one of Rothesay’s priority issues is addressed thoroughly, please let it be this one!
In the meantime, the public will be watching over the next months to see if real discipline is imposed on Rothesay’s spending.
If you would like to read more on the state of Rothesay’s finances, Blair MacDonald’s analysis is a great place to start here. We plan an additional post on this later in February.
In my next post, I’ll look at Council’s priorities in the area of Planning.
As always if you have comments, I can be reached via the email link at the top of this post.