City’s Fiscal Mess Will End Poorly: THE VOTER

Legally, the city can’t run a deficit so how can they vote in favour of a budget with a $36-million hole in it?

They are saying it’s there awaiting funding from the province and/or the feds. What, realistically, are the prospects of that money appearing when they’ve been asking for it for months and months with no success? What if it doesn’t come? Then what?

My suspicion is that they don’t have the guts to put on the table the cuts that actually need to happen. What that will lead to when other levels of government don’t rescue them from their bad management is a mid-year fiscal adjustment to get to a balanced budget by year end.

When you adjust the budget during the year, you don’t have the option of increasing taxes since the tax bills will already have been issued. That leaves cuts or increased charges for programs and services as the method to find money. Because it’s not a budget, those cuts or price hikes don’t have to be in the area where the problem originated and things like winter maintenance and recreation could be tapped to solve the transit shortfall. So nothing is safe.

By making cuts in mid-year, you actually have to do it in a way that makes them look twice the size. If you need to find $120 and you do it at the beginning of the year, you have to recover $10 each month. To get the $120 when you start halfway through the year, you will have to recover $20 for each of the remaining six months which makes the cut appear larger although it has the same overall effect.

A prudent Ottawa City Council, something we don’t have here in Ottawa, would put the brakes on new spending in a year when they are facing a large, unfunded deficit. Self-cleaning bathrooms and tree equity, both items I support, would be deferred to another year. LRT construction would be frozen wherever possible including such things as landscaping and artwork at the new stations. Most people would rather have a train or bus turn up than have nice things to look at while they wait for no-show transit. Any work on Lansdowne 2.0 would be stopped immediately so that the borrowed funds cease to be a drain on the city’s finances.

Once again, council is not playing straight with residents, knowing full well what is coming when they aren’t rescued from their folly by other governments. If they find a “Christmas Miracle” a la Watson that pulls them out of the deficit, the question arises as to why that miracle money was not accounted for in the budget in the first place. There’s a strong whiff of what I will kindly call dishonesty in that type of conjuring.

I will be very interested to see how they explain that they either didn’t know about or overlooked a pool of money that is almost $40 million. That doesn’t speak well for their command of the fiscal state of the city. Speaking of command of the city’s finances, where are Cyril Rogers, the CFO, and Wendy Stephanson, the city manager, in all of this? They seem to be skating under the radar in all of this when they should be front and centre. Remember that Stephanson was the previous CFO and Rogers was her deputy so they have both been there through the development of these problems but nobody seems to be holding them to account. Why is that?

I suspect that politicians and bureaucrats alike think having the medicine doled out in two separate lots will make it more palatable for city residents and businesses. They should remember that people can add Cut A to Cut B and, if Cut B comes in mid-year followed by another draconian budget next fall, those memories will easily last until the next municipal election.

Sutcliffe went to great lengths to tell us after last year’s budget was passed that the ensuing years would bring more drastic measures. Had he and the rest of council had any sense, they would have started to deal with the city’s fiscal situation in their first budget, not their third, so that the pain would have been more spread out and we wouldn’t be in so far over our heads now. That would have required planning and management skills as well as political know-how that are in very short supply at city Hall, more’s the pity.

One thing I do know is that this will not end well.

The Voter is a respected community activist and long-time Bulldog commenter who prefers to keep her identity private.

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