Budget Bullshit

Greedy pig The first question you have to ask after following Collingwood Council’s sloppy and inept budget process is “Where did the money go?”

Then the second question you have to ask, “Are they really that dense?” Yes, but let’s start with the first question.

Back when he promoted dismantling the water utility from its partnership with Collus-PowerStream (CPS) and taking the utility under town control – a process that has proven a disaster for the town – the interim CAO promised we’d see a savings of $750,000 a year. But now the town is trying to privatize those water services by selling them to a for-profit corporation from Alberta, that “savings” vanished from the recent budget. Where did it go?

In the 2017 budget, that promised “savings” wasn’t even raised by The Block, in part because they were all so bemused and befuddled by the parade of numbers they couldn’t keep up with any of the current stuff, let alone savings promised more than a year ago – promises they swallowed hook, line, and sinker.*

Where did it go? But that’s not all you should worry about in the budget.

There is a $280,000 “contingency” for running the IT services that used to be provided by CPS via the shared services agreement. That’s just the start of the IT expenses, by the way; it’s only the amount required to cover the remaining six months of 2017 after CPS stops providing the services (end of June). And it doesn’t count the costs of the administration hiring its sole-sourced consultant out of Barrie to manage the transition (and who may be given the management contract without an RFP). Nor does it include the cost of hiring the third person that will be required for the full transition, or the cost of all the necessary hardware and software.

Here’s what CPS charged the town for those IT services the past five years:
Year Supervision Technical Annual Total /Oversight Support 2016 $34,718.52 $114,090.02 $148,808.54 2015 $27,774.84 $101,435.87 $129,210.71 2014 $27,097.44 $108,129.66 $135,227.10 2013 $26,436.43 $110,554.53 $136,990.96 2012 $25,666.44 $119,700.42 $145,366.86
So a little basic math tells me that the town plans to spend almost double for half a year what CPS charged for a FULL year. And a full year of great service that went above and beyond any contractual agreement. How is that good fiscal management?

This is but a snapshot of how inefficient and expensive this mess has been so far. It’s going to get a lot messier and more expensive next year. But these extra costs weren’t raised during the discussions because of The Block’s slavish kowtowing to the administration.

Add that $280K to the mysteriously missing $750K and you have MORE THAN $1 MILLION of your taxes wasted or missing in this year alone. Imagine how much MORE it will cost us when the town takes over the billing and the mailing services at the end of 2017 (currently provided by CPS). We’ll need MORE staff, more hardware, more software… more unnecessary expenses sloughed onto the taxpayers.

Expect those costs to triple by the end of 2018. All because of The Block. Now you see why The Block is eager to sell our water services to an Alberta-based corporation now: they want to avoid the embarrassment of having their miserably inept financial management made public in the 2018 election year.

Add onto that more than $500,000 already spent on sole-sourced lawyers and consultants hired to pursue the administration’s obsessive witch hunt for imaginary wrongdoing and on The Block’s mad vendettas. Then predict the hundreds of thousands of dollars about to be spent on legal challenges to stop the hospital redevelopment**, the airport redevelopment and, of course, to promote the sale of the town’s CPS share and the privatization of the water and wastewater services. The legal and consulting feels spent to fuel personal agendas this term will cost taxpayers millions.

So to recap: millions of your tax dollars already wasted by this group. Sole-source contracts handed out like party favours, taxpayers’ money spent faster than a drunken sailor on leave in a brothel beside a rum factory. And I haven’t even got to the interim CAO’s salary (higher than that of the premier of Ontario’s) and the unlimited expense account for gallivanting around the country The Block granted “Senator” Jeffrey. Back to the budget…

Yet we’re being told that there is no tax increase in 2017. Well, we all know that’s codswallop. The story in the Collingwood Connection has the headline, “No tax increase for Collingwood, assessment will lead to higher bills” and in the Empty-prize Bulletin it reads, “No increase in taxes in Collingwood.”

Both are wrong. And if the local media did their jobs or paid attention, they’d know better. First, this council applied a 0.75% levy to your property taxes that gets added on EVERY year. It’s a tax, so it counts. Second, the Simcoe County levy is going up 2% so we’re already at 2.75% increase. That’s about $100 a year for the average home, right there.

But the idea that your taxes will go up just because of increased assessment is sheer poppycock. Municipalities multiply the assessment by a “mill rate” (a percentage) to get the expected taxes. When the assessment goes up, but the taxes are supposed to remain the same, the mill rate normally goes down to account for the difference. Plus we have growth which brings in more money.

It seems – if the stories are correct – Collingwood isn’t adjusting the mill rate low enough to account for the assessment increase. And that, in my analysis, is a TAX INCREASE. They’re just trying to pawn the blame off on the assessment: it’s MPAC’s fault. Or maybe it’s yours for allowing your house to be worth more.

The point is: if the town wanted to keep a zero tax, it would lower the mill rate and kill the levy. But instead, we get fake news about “no” increases. I call bullshit. Your taxes are going up. Again.

(There was a public meeting called to allow people to speak up about the budget, but it attracted only three people. Perhaps that’s because it was advertised in a local newspaper whose short journey from printer to recycling bin is seldom sullied by any readership…)

The town’s own budget – the amount of money it plans to spend – continues to escalate out of control. In 2014, it was $27,047,195. In 2015, it grew to $27,753,013 and in 2016 to $28,866,092. Now it’s risen to $30,451,717! That’s an increase of more than $3.4 million in three years, or 12.6%!

But that’s just what the town wants for itself. The town also collects for the school boards and the county. The totals are actually much higher:

2012 $49.5 million
2013 $60.3 million
2014 $57.3 million
2015 $67.3 million
2016 $67.1 million
2017 $81.0 million

In 2014, there were fewer than 140 town employees. That grew to 143 in 2015. By the end of 2016 it was 149 and the town plans to hire three for the IT services plus who knows how many more. And don’t forget that every year it raised taxes, council voted itself a raise in salary, too.

And even more to the point: the town has had a surplus at the end of the last several years. Council could have required that to be applied to the operating costs to avoid tax increases – and doing so could even have LOWERED your taxes. But The Block doesn’t care about you or what it costs you to live here. So raising your taxes will help them drive out those The Block find undesirable – seniors, people on fixed incomes and low-income earners.

And yes, to answer the second question, they actually are that dense. Not one of The Block actually reads the whole budget document, let alone understands it. They were given four scenarios, one of which could have actually LOWERED your taxes by 2.5% (which, I’m told, the treasurer preferred). Instead, they chose the one the interim CAO wanted (of course) which increases it by $54.81, PLUS the 0.75% levy PLUS the county increase.

The scenario The Block voted for states it will be an increase:

“The tax rate would increase 1.19% to reflect a 0% change year over year.”

Yeah, that’s mystifying and you can see how the media (and The Block) were confused. The budget can be pretty byzantine at the best of times. It clearly says the tax rate will increase. But there’s a difference between the tax rate and the tax levy. The rate is the mill rate: the percentage multiplied by your property value. The levy is the total amount collected. When Deputy Mayor Saunderson made his ill-informed motion about a 2% tax hike, he confused the rate and the levy, and, when it was explained to him, he sheepishly pulled his motion from the table.

But let’s be clear: there is a tax increase is coming because the town is spending more. A LOT more. But you won’t be getting more or better services for that extra: you’ll be paying for the administration’s lawyers and consultants, and for the wasted IT services. If I could pronounce it, I’d call the whole thing – budget and term, Block and administration – “Verblendungszusammenhang,” a German word which translates to “total system of delusion.”

One page in the report shows “the total expenditures of the Town will increase by 3.17%” in 2017. But in the scenario the Block chose, it states “Overall municipal spending from taxation would increase 4.42%…”! That’s an excessive growth in spending, way beyond the inflationary level (1.5% in December and an overall average of 1.44% in 2016), but The Block let it slide by because the administration wanted them to ignore it (and the administration wants more money to throw at consultants and lawyers and the unnecessary expenses for IT) and because they simply didn’t understand the implications of their choice.

Excessive spending doesn’t always mean higher taxes because, as in Collingwood’s case we had growth, so the additional properties (i.e. the assessment growth) helped pay for the difference. But we’re still going to pay more in taxes because we’re spending well beyond our means. That’s not efficient fiscal management: it’s a cover up.

The Block collectively have the business acumen of a common garden gnome. They simply don’t understand what they vote for.

This term has been a financial disaster. Among the many disasters it has been.

Collingwood deserves better.
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* Every year, councillors are given the opportunity to get a complete budget breakdown, or accept the administration’s summary and conclusions. At 600 pages, the full budget barely fits into a 4″ binder. That’s a lot of reading and studying, but any elected representative who takes his or her responsibility to the position and the public interest seriously will ask for one. Only through the complete report can a councillor appreciate the depths and breadth of the town’s financial position and proposed spending, can understand how they money is allocated.
Or they can choose the lazy way: accept the summary (about 25 pages long – there was also a larger summary, more than 200, which clearly was not read by most of council) and the nudge-nudge-wink-wink assurances from the administration that they’re doing the right thing.
It won’t surprise you to learn that for the past three budgets, every member of The Block, including its pledge member, chose the summary. Councillor Lloyd alone chose the full report.
** The administration recently presented a report by another sole-sourced consultant on keeping “employment lands” and their zoning, all part of its arsenal of weapons to block the hospital. The point of presenting it was simply to show off the big guns the administration plans to use to block the CG&MH plans. The Block and its administration will do everything in their power to prevent the redevelopment on a new site because their dwindling cadre of supporters demands they do so (because some of whom may be worried that their property values will diminish if the hospital moves to a better site). The Block happily lets these personal interests override the public good.