Address to Council re Budget 2009/10

To: Wolfville Town Council                                               May 27, 2009

From: Douglas Lutz

RE:  2009/2010 Draft Budget

I am writing to provide each of you with a record of my observations on the current draft of the budget flowing from last night’s meeting. In one material particular (hospice) my view as expressed in this document is different from that which I articulated last night.

My presentation was structured around 3 basic topics: 1) the  funds available for expenditure by Council are limited  both now and in the future, 2) a principled approach to the budgeting function is essential, 3) comments on specific line items in the draft budget.

1) the fundamental challenge facing the Town

At pages 5 and 13 the CAO makes the point that revenues cannot keep pace with continuous increases in demand for public services and from agencies, boards, etc. In my view, those statements understate the problem. Unless there is a dramatic change in population which will support an increase in tax revenue the Town has little or no ability to generate increasing amounts of property taxes from its residents – the willingness of the majority of residents to see annual increases in their tax bill has been exhausted. Accordingly, very tough decisions must be made to ensure the continued economic viability of the Town and to maintain at least the basic infrastructure and services expected by the community. Wolfville is facing a brick wall of increasing cost without any increase in available funding.

The Council’s decision to approve a budget which is essentially “revenue neutral” is, in my view, correct and should be adhered to by Council. “Budget creep” should not be permitted.

2) a principled approach to budgeting is required

Within the “funding envelope” Council is required to make choices; whether we like it or not, those choices of how to spend tax money are choices which are forced on residents, but the money being spent is the money paid by residents for which they expect programs and services from the Town. The expenditure should be prudent, rationally connected to the best interests of the Town and demonstrate good value for money.

In my view, expenditures can be characterized as falling into 3 categories:
a) essentials – roads, water, sewer, fire protection, police, including infrastructure contingency funds

b) those things which are valuable for the future of the Town and which have the potential to encourage growth such as the public school, public housing projects etc.

c) other expenditures for things like arts, culture, recreation which add immeasurably to the character and quality of life in our community and which are undeniably deserving of support if funds are otherwise available to do so.

In principle, category a) must be funded 100%. Category b) should be funded 100% and category c) may be funded to whatever extent is available after a) and b) are looked after. In no circumstance should a) or b) be short-changed in favour of c).
This is not to say that the arts or recreation are not valuable attributes of our Town, rather that the essential infrastructure and services are required obligations of Council; the rest are options, choices to be made with residents’ money, provided any is available.

Applying, this rather simplistic approach to the draft budget, I make the following comments on certain line items.

3) specific line items

a) personnel: in my opinion, a town of our size has no requirement for a full-time Building Inspector or Computer Mapping Technologist. Those are services which could be shared between small municipalities  or contracted for from the County as required. I do not believe that it is a prudent expenditure of town revenue to maintain these two positions when other, more essential and pressing expenditures require funding.

b) RCMP – I understand the contract extends until 2012, but the cost is not justified by the level of service and the Town ought to be reviewing the service provided, the cost and alternatives when the contract ends.

c) At pages 50/51 there are a number of line items for recreation and culture  (12273260, 3360, 3390,3410, 3418), totalling $72,000, which are, in my view, inappropriate expenditures of public funds  in an economic environment which does not permit adequate funding of municipal infrastructure. Most of these causes will not cease if the Town’s funding were to cease, and most are more appropriately funded by the users. As an example, withdrawing the Town’s support for the Acadia Performing Arts would likely simply result in an increase in ticket prices which would easily be met by the audience.  Support for the Acadia University field, when our own school needs that support seems to me to be entirely inappropriate.

d) Capital budget – Clock Park

I have been concerned about this project for a long time – it is unique on the capital project budget as one which will require a significant and unnecessary expenditure of funds as compared to all other projects on the list which are clearly essential.. It may be that owning the site of a former Irving gas station for a park is a good idea, but  the cost of doing so by virtue of the demands of the former owner for professional landscaping etc make it an unattractive proposition, particularly when the Town is desperate for funds to meet many more other, pressing needs. If Irving wants to gift the lands to the Town and undertakes responsibility for any residual environmental liability, the people of this community have demonstrated their ability to perform miracles of landscaping with their own resources (witness the old ATF grounds and Randall House). Moreover, the Irving Centre and the university have the ability to recognize the Town’s financial commitment to their  track by providing plantings, design, labour and equipment which the townspeople could match, creating a park with no cost to the public purse and an opportunity for exceptional community involvement.

As a capital project for the Town, it should be cancelled.

The Hospice

Until midway through the meeting last night, I was operating with the understanding that the hospice project was one to be built in Wolfville, adjacent to the EKM. I was shocked to learn that there was any serious consideration being given to taking  property tax revenue from the residents of Wolfville which is levied by law for the benefit of the Town of Wolfville and transferring that tax revenue to another municipal unit to construct infrastructure in that other community, creating jobs in that community and adding to the tax base of that other community. This is, in my view, an entirely improper (and perhaps illegal) expenditure of tax revenue.

Notwithstanding the entreaties of Charles Fraser (not a resident of Wolfville, which begs the question how it was that he was at the budget meeting of town residents) this project is a “charitable” project, i.e. one which will attract a charitable donation deduction if made by an individual. Moreover it is a project which is located in Kentville. Wolfville tax dollars should not be going, no matter how good the cause, to bolster the infrastructure and tax base of Kentville, when there are so many causes in our Town which require funding and which would reside here.

It is not the function of Council to permit the Town’s revenue to be used for philanthropic purposes – the Town is not a donor. It is akin to the Town deciding to make a gift to the IWK. It is simply not the function of Council to expend Wolfville public funds for such a purpose.

I would happily entertain questions and can be reached at home – 542-4204

D.W. Lutz