Bolin's Blog and Grill

From 8:30 am today (Wednesday) to 4 pm with only a few brief intermissions Staff presented a quick line by line overview of all Departmental Budgets, both Operating and Capital.  All Council members attended for most or all of the day with only one no show.  While to my way of thinking a number of information holes remain to be filled, for the most part I found the experience valuable and believe that the Councillors did so too.  There was lively discussion on a number of topics and I have made notes for follow up questions.  (Visitors -I was one of two- were not allowed to ask questions and under the circumstances I believe that this was appropriate.) I will raise some of these questions at Council meetings, here in my blog and others at the city's online Budget Forum and which I suggest that you visit and use to ask some of those questions involving city finance which you have always wondered -or complained- about.

Tomorrow afternoon at 4:30 pm by Superintendent J. Lott, OIC, RCMP, Nanaimo Detachment, to provide a presentation regarding RCMP operations in the City Hall Board Room.  Visitors are invited.  The budget is the most important document which any city prepares.

It was announced today that the requested meeting to review the 2009-2013 Financial Plan will be held tomorrow, Feb. 4, 2009, in the Franklyn St. Training Room, 3rd Flr., 238 Franklyn Street (City Hall Annex) starting at 8:30 am and expected to go until 4:30 pm.  The public is welcome to attend.  This should provide a good background to understanding the budget and where it is taking us.

At its FPCOW meeting this evening there was spirited discussion among our Councillors about the budget for 2009 and Council pay for the upcoming year.  Council, cognizant of the temper of the financial times in which we find ourselves has decided to lead rather than follow.  They have adopted a policy of Council salary increases which will be in line with the increase in the Consumer Price Index in British Columbia.  This figure ended 2008 at 2.1 percent.  They additionally reduced the target rate of increase on the city's overall budget from 5.3% on residential properties to 4% with increases on commercial and industrial property to 3.5% (these figures require verification and remain a target until the budget is finalized).  Note:  The percentage target figures were not changed.  The residential tax increase will remain at 5.3% and the commercial and industrial targets will also remain unchanged.
In perhaps an even more significant move, Council decided to hold meetings at which the budget will be examined for cuts or increases on a line by line basis.  Even if the budget is not changed, it means that all of us (the meetings will be open to  public) should have a real understanding of the budget and what it means to us in costs and in services.  It is my feeling that this most important of jobs has in the past been delegated to staff without sufficient oversight by Council or the public.
It was a long meeting at which the overall rationale for the Fire Department's budget program for the Fire Department was also ably presented..  Council seems determined to fulfill their promises of greater transparency and candor and to look to the big picture as well as the details.  My hat is off to them.

During the recent municipal election I don't recall hearing a single candidate who professed to be running for the Board of the Regional District of Nanaimo and the approximately $10,000annual  pay that goes with it, but that is just what happened to seven of our nine elected Nanaimo City Council members.  How is it that we are represented on the RDN by those who never ran for the office?  Is it a matter of force majeure  that seven must go to the RDN?  What if they don't want either the extra work or the extra pay?  Can they just say no?  And if, in Nanaimo's case, three or more did say no, what happens to our representation on the Regional District Board?  Does the next on the electoral vote line get the job?  Is someone appointed?  And if so who and by who?  Or are we then unrepresented.
It seems to be that the dependance/independance of the RDN positions are very ambiguous.

It has now been two (2) and a half months since the Nanaimo municipal election and only three of the incumbent Council members and one of the newbies have filed their campaign disclosure statements.

None of the required filings by Campaign Organizers have been displayed.

How complex can the dealings of those who have not yet reported be that so many candidates or organizers have not filed?  It is a puzzlement.

These filings are on the city's web site for the first time this election and can make for interesting reading and questions worth asking.  Take a look.

Quis custodiet ipsos custodes?  (Juvenal):Who watches the watchmen?    On Monday, Feb. 2, at 4:30 City Council will meet in the cramped confines of the Board Room on the second floor of City Hall to discuss, among other things, their pay for the coming year.  The model which they have chosen to generate their pay increase projects an increase of some 16%.  This arises because a couple of the communities in the pool to which they have chosen to compare themselves raised their Council's pay by about 50% last year!!   Have we been watching our Council?  Has Council been watching Nanaimo's budget.  During these years, Nanaimo's property tax increases have consistently doubled the Consumer Price Increase.  This year's tax request (5.3%) is no exception to this rule (CPI of 2.1%).  We are badly in need of watchers.  Monday's meeting is open to the public.

In thinking about the matter of Council Pay, there is a bit of history to be remembered.  An examination of the City's Statement of Financial Information for the years 2004 to 2007 (the 2008 document will not be out for several months) shows that during that time:

1. Council pay increased by over 27%;
2. City Manager's pay increased by over 40%;
2. Pay to staff making over $75,000/year increased by over 100%;
3. Grants & Contributions over $25,000 increased by over 31%.

These seem rather generous increases as it comes from taxpayers during a time when the BC Consumer Price Index only increased by about 6.5%!!  Pensioners examine your pension increases.  Workers check your pay stubs.

I leave it to you, what kind of new increases in Council or city pay are called for?

It has been interesting to watch the discussions in the local papers concerning Council pay.  Last year the city adopted a method of increasing Council pay by taking an average of the pay in 10 supposedly similar BC municipalities.  This method provided healthy increases.

If however, rather than simply averaging the salaries, the difference in the size of the municipalities had been taken into account by using the average of the per capita expenditures on Council in these same towns, then the Mayor would have taken a cut of $4,258 and each Councillor a cut of $1,367.  It all depends on whether you think the job involves managing a community, regardless of size, or whether you think it involves managing the affairs of people, which can become more complex in larger populations.

It should also be noted that the discussion current in the papers, is incomplete in describing the pay of Council.  Fully one third of Council pay is free from income taxes.  Similarly, seven of the nine Nanaimo Councillors, without further ado, are set to watch our affairs at the Regional District of Nanaimo.  This brings in over $9,000 more, also with 1/3 not subject to tax.  And one doesn't have to give up one's day job.  Both positions, in addition, offer expenses and perks.

If we are to have a discussion of Council pay, at least let us understand the pay that we are talking about.

The previous questions have been answered -or not- at the Budget Forum: 

http://www.nanaimo.ca/budget_forum/index.aspx

Take a look and see what you think.

1. The 2009-2013 Financial Plan shows $20.6 million in discretionary reserves, out of $88 million in total reserves.  While there can be no argument that having some savings for a rainy day is a prudent practice, the amount of money in such funds seems questionable, particularly in an economic environment where citizens may be losing their homes.  These  figures show that total reserves represent 1.2 years of total annual property tax revenues ($76 million estimated for 2009), and that  discretionary reserves amount to 28% of total annual property tax revenues.  Given these figures and the very robust amounts held in those legislated reserve areas why should there be any need for discretionary reserve funds greater than 10% of the annual total property taxes paid in Nanaimo?  This would leave some $7.6 million in discretionary reserves and free up$13 million for property tax relief and reductions in debt repayment.

2.  It has been typical that there is an annual budget surplus of between $3 and $5 million dollars. If 1% of property tax is equivalent to $750,000, then this surplus amount to between 4 and 6.6% of the tax rate.  Given these figures, why should there be any tax increase this year as the average property tax increase called for (3.91%) is less than that usually recovered in our surplus?

3.  What projections have been used in the financial plan for the years 2009 to 2013 for the costs of using the conference centre and for our income from that facility?

4.  The 2008 Industrial Tax Rate Comparison shown in the budget presentation document shows Nanaimo to have the lowest industrial tax rate among those cities shown.  Why then, is there such a drastic reduction in the industrial tax rate shown for 2009-2013?  Is this in reality a grant to Harmac?  A maneuver to try to capture new industries?  Could you please explain this seeming discrepancy between problem and solution.

Watch the City’s Budget Forum at:  http://www.nanaimo.ca/budget_forum/index.aspx   Click on any questions to see the City’s response.  Responses may take a couple to days to receive a response.