3/10/12

Budget 2012 Final

Council passed the 2012 MM budget last week. I didn't support it. Not only is the 7.8% local tax increase too high, the budget widely misses the goals set out in our long-range financial plans.

Part of the reason I ran for office is the high Town debt, now at over $16 million. I believe we should stop adding to it and pay it down. In April 2011, we received extremely useful guidance from BMA Management Consulting. The core of their advice was that we start putting more money into reserves and capital projects to cover the cost of depreciating capital assets: roads, bridges, buildings, sidewalks, street lights, etc. We need to find $54 million over 20 years to cover replacement and repairs. That averages $2.7 million annually. We didn’t even come close in the 2011 or 2012 budget.

Budgeting is an exhausting and frustrating exercise. Events unfold that require immediate and unexpected expenditures. For example, we had to spend $40,000 to add safety features to the ice machines at our two arenas. The elevator at the AOTH needs $90,000 in repairs (paid over three years from reserves). We added 25,000 for a pay equity settlement. Those three items alone account for one-fifth of this year's tax increase.

To meet our BMA goals and rein in tax increases, we must cut expenditures and apply the savings to reserves. But where do you trim? We have to maintain core infrastructure and key service. Operating costs (phone, insurance, fuel, hydro, vehicle maintenance, etc.) are out of our control and increase faster than inflation. Wages and benefits make up a huge percentage of the budget but are not out of line compared to other towns.

Services is the only category where we might find savings and efficiencies. But each service has its staunch followers and defenders. I believe we pay too much for our residents to use the Carleton Place library because the $43,800 we must pay does not account for their residents using our library. I believe we should not be subsidizing daycare ($103,000 this year)—it should be privatized (not closed).

The alternative to reducing services is perpetually higher taxes. If anyone has cost-cutting suggestions for next year, let your mayor and councillors know.

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