City squeezes out a surplus of just over a quarter of a million- Mayor says finalizing a budget in less than three hours

By Pepper Parr

February 20, 2015

BURLINGTON, ON

In the commercial world the word they look for is profit – did we make a profit? Municipalities are not in place to make profits – they exist to provide services to tax payers and at the end of each fiscal year they end up with a surplus or, as Burlington’s Director of Finance, Joan Ford chooses to call them, a “favourable variance”. Municipalities cannot have a deficit.

Burlington had a surplus – oops – that is a favourable variance of $292,282. which is really very low. In the recent past there was a surplus of more than $9 million.

What happens to the surplus? It gets put into the Tax Stabilization Reserve fund – which Burlington treats as a ‘piggy bank’ they can turn to when they need funds.

Because municipalities cannot run with a deficit – what most people call a loss on operations – they create a series of Reserve funds that they draw down on when needed. There is a snow removal reserve fund that the city goes to if there is more snow to remove than expected.

Each year the city budgets for different services it provides. This year the city has moved to service based budgeting. In the past budgets were based on what the various city departments had to spend to provide services. A lot of time and effort was put into the creation of a totally different way of accounting for the funds collected and spent.

When Service Based Budgeting was first announced the public heard about Results Based Accountability and Business Process Management – these have become the new buzz words in municipal accounting.

When this new approach was first announced Council did say they would produce the budget in both the old format and the new one – but that sort of got lost in the shuffle. Deliberate? Probably not – the finance people probably decided the benefit was not worth the effort required to put forward to sets of numbers – and, what if they turned out to be hugely different?

So – the tax stabilization funds has an extra quarter of a million in it and the city has a budget in place.

Some observations on how this budget got put together. There was a sense of rushing to get it completed. There were far fewer delegations this time around And very little public involvement in the capital budget which, given that there is a shortfall of millions on the maintenance of the infrastructure – basically roads. One would have thought there would be more public interest.

In the past Burlington has held a public session at which they explained their budget to the public. These events were traditionally held at the Art Gallery – the city decided to hold the meeting at the Mainway Recreational Centre on a night the weather was just terrible. The city reported that there were just seven members of the public in the room.

2014 election candidates Carol Gottlob and Angelo Bentivegna were two of the few that made it to the public discussion on the budget – neither asked any questions.

There were a couple of hundred people at the ice rink less than 25 yards away. My conclusion at the time was that the city had failed to promote the event enough – or no one really cared about the budget.

This Council does have a problem connecting with its public. It tends to rush issues; it is far too often very short with delegations. It is now a divided Council with three members tightly aligned with each other. Councillors Craven, Sharman and Lancaster almost vote as a block. Surprisingly Councillor Dennison votes with them – but not always.

That leaves the Mayor having to decide where he wants to land when it comes to voting; Taylor and Meed Ward tend to vote together.

This “split” is relatively recent – it will take a little longer to determine how entrenched views are and whether Mayor Goldring can bring about more in the way of harmony with the Council he leads.

The 2014 public budget session was close to a full house at the Art Gallery – the weather was much better that year and there were election candidates wanting to improve their profiles.

One of the things that cannot last for long in the world of politics is a vacuum – and there was, still is, a leadership vacuum.

Every member of this Council has been in place for four years – the split that is evident now was not evident before the October election. Something brought it about; some shift in the way people decided to behave has taken place.

How far this goes only time will tell – what is clear now however is that it is not healthy.