With a 3.99% budget increase staring them in the face city council is aking a lot of questions.

News 100 redBy Pepper Parr

January 18th, 2019

BURLINGTON, ON

 

Director of Finance Joan Ford does a great job of providing the data ad her department does a good job of collecting the taxes as well. It's the spending side that is causing the long term financial stress. Ms Ford doesn't do the spending.

Director of Finance Joan Ford does a great job of providing the data ad her department does a good job of collecting the taxes as well. It’s the spending side that is causing the long term financial stress. Ms Ford doesn’t do the spending.

Joan Ford, Director of Finance, has been educating the members of City Council for as long as the Gazette has been reporting in this city.

Her department is, without much doubt, the best run department in the city. Ford either has the information a council member asks for at her finger tips or she gets back to them real fast.

This year the educating of council members is a bigger job for the city treasurer; all but two of the seven are new to matters municipal.

There are just two of the new comers who have solid business experience and a demonstrated ability to work with numbers. The rest are going to have a tough time and will stumble on occasion.

Council has some hard decisions to make – the upside is that this new council is asking hard questions – they want to know if the “nice to haves” are really worth it?

Earlier in the month council asked the Finance department to tell them what would have to be taken out of the proposed budget to get either a 3.25%, or a 3% or a 2% tax increase for 2019.

They also wanted to know what the Impact would be if the 1.25% infrastructure levy were removed for 2019. Staff did respond, it wasn’t a pretty picture. That staff response will appear in another Gazette news report.

During the day long session on Thursday the finance department people set out what the challenges are.

The city created a 25 year Strategic Plan that serves as the reason decisions are made.  Everything is measured against that Strategy.  Along with the four “pillars” the bureaucrats added some additional targets that are more fine tuned.

 

1 Achieving Strat Plan

The Strategic Plan: the guide and foundational document decisions rest on.

 

2 Proposed capital

 

3 Proposed capital

 

Debt capacity 2

The province permits debt up to 25% of assesment; Burlington has set 12% as its debt limit – it has in the past exceeded that for very short periods of time. The reality is- Burlington has significant capacity for additional debt – and if money continues to be cheap it might be an option.

 

5 Operating breakdown

The number that matters is what the city tax bills is going to be – averaging the totals just blurs the picture.

 

6 Assessment growth

Assessment growth brings gobs of money to the city in the way of development charges. Once a development is completed the city has to take on the maintenance of the streets that were built and providing the services needed. Historically Burlington has seen impressive growth – but the city is now basically built out and for the immediate future there isn’t going to be any tax revenue from the developments in the planning stages. That reduces tax cash flow.

 

7 Bus case study

The numbers are in the 000’s The Finance department sets out a business case for a decision. Do we set aside the Infrastructure renewal levy; do we add an additional by law enforcement officer. The financial implications are set out.

 

8 Additional items

The chickens are coming home to roost at the Brant Museum: the refurbished/redesigned site will have to be staffed – there is a pin ball exhibition scheduled. Money for that is going to have to be found. Council will have to decide if they want to act on any of these. There were additional idea from staff that were not even considered by the Budget Leadership Team.

9 Tax levy

The numbers to the right of the bar graph are millions.

 

10 Tax bill breakdown

The left pie chart shows what is being collected in the way of taxes and where the tax money is going. The right pie chart shows where Burlington gets the money it needs to keep the doors open

 

11 Tax impact

Every 0.5% decrease in city taxes requires $800,000 of budget reductions Translates to $1.76 per $100,000 of assessment ($8.80 / year for a $500,000 home) = 0.21% reduction to the total tax bill

12 historical tax

The city Council led by Rick Goldring could not manage to find a way to lower the tax bill. It was always well above inflation. The new council has taken the position that anything above inflation isn’t acceptable – now they have to figure out how to make that happen.

 

13 Tax burden by city

Burlington is the first dark blue bar on the left. The dark blue bar in the centre is the average for the cities surveyed.

The city will know by the end of March how this new city council decides to oversee the financial side of municipal administration.

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3 comments to With a 3.99% budget increase staring them in the face city council is aking a lot of questions.

  • Stephen White

    Culling through reams of financial data looking for table scraps to cut expenditures isn’t a creative or insightful approach to dealing with this problem. Some creativity and “out of the box” thinking is required.

    The City needs to adopt evidence based decision-making in searching for responsible and purposeful ways to manage its budget issues. There are two major municipal benchmarking organizations. One is the Municipal Benchmarking Network Canada. The other is the Ontario Municipal CAO’s Benchmarking Institute. The City of Burlington participates in neither. The Region of Halton participates in both. Why?

    MBNC is a network of municipalities that uses data to continuously improve service delivery. Participating municipalities provide data on key performance variables, and their results are compared against other participating municipalities. Innovations in service delivery, technology and business processes are shared. Calgary, Halifax, Hamilton, Toronto, Windsor, as well as the Regions of Durham, Niagara, Halton and Waterloo all participate. Why doesn’t Burlington participate? MBNC’s report is published on their website:

    http://mbncanada.ca/app/uploads/2018/11/2017-Final-Report.pdf

    What Burlington needs is a full scale organizational review so that human resources, technology and business processes are aligned to provide the most efficient standard of public services Based on what I’ve seen the City tries to do much, and offers too many services or undertakings of questionable value or limited utility. For instance, a Coyote Management Program based around residents reporting sightings on a website doesn’t strike me as terribly useful. Having a by-law officer drive around Burlington at night in a Nissan Leaf ticketing cars on streets doesn’t strike me as a hugely impactful value added service. Do we really need four speed bumps at a cost of $4,200 each along a one kilometre stretch of Spruce Avenue between Shoreacres Road and Appleby Line when there is no school nearby? Do we really need all the communication and p.r. baggage around the “Grow Bold” initiative? Do we really need a Deputy City Manager?

    If we can’t originate then let’s at least plagiarize from those better equipped to provide leadership.

    • Lynn Crosby

      Hear hear, Stephen! All excellent questions. And to each of your final ones, I would personally answer with a resounding No.

    • Joe Gaetan

      Stephen makes some valid points, it is nearly impossible for the average citizen to delve into the myriad of spending accounts that also contain account descriptions that seem to vary from time to time. Any serious feedback on the COB Budget would require an enormous amount of work with no or little background from which to ask intelligent questions. Being part of the MBN would be a good way for citizens to see how we compare to other municipalities of similar size. As an a side,one has to wonder why Halton chose to opt out of reporting on 12 categories.
      At first blush the MBN benchmarking report is something citizens could look to as a reliable source from which we could begin to ask questions.
      Case in point, I am sure the $11 million Joe Brant Museum renovation looked like a good idea at the time. The “Additional items for consideration” includes a $150k line-item that I assume will be an ongoing expenditure. Did the decision making process for the J.Brant Museum take the future spending into account? Finally I think the description” Additional Business cases for council consideration “ should be changed to read “Additional items that require a business case”.

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