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Bill Walton, Running on Reserves

Moving money around in the Reserve Funds is like a shell game. Where is the pea?
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This is a reprise of a column I wrote in June of 2017. I thought new-to-BayToday readers might get some motorcycling and taxpayer insight into the Reserves since it is once again a talking point with City Council.

Years ago, okay back in 1974 - 1989, I rode a BMW 900 RT motorcycle: one of those German bikes with the two cylinders sticking out the side of the motor. It was one fine motorcycle that hardly ever let me down. Well, there was that time in Nova Scotia (photo) when the points fried but with the help of the file on my Swiss army knife, we persuaded it to run until we returned to North Bay and bought some new points.

The old Beemer loved to run at high speed and still gave me 45 miles to the gallon of gas. You know this was a long time ago because it still used gallons, not litres. The petrol tank (as they called it in the owner’s manual) fed the twin carbs by gravity. The petrol ran through a petcock valve that had a butterfly lever to shut off the flow of gas. This was very handy when parking the bike so gravity could not suck the gas out overnight if a carb float was by perchance stuck in the open position from the lead additives and unstrained bugs in the fuel.

This petcock also had a position to let the fuel out of the ‘reserve’ portion of the gas tank. The Beemer did not have a gas gauge. You knew when to refill the tank by checking your mileage, dividing that by the number of gallons (4.5 imperial), and whether you had been climbing hills or driving mostly in the city. This calculation was done in your head as you drove and avoided potholes, dogs, cars, and transports. Or more often, you waited until the engine coughed and then reached down and flipped the lever to use the reserve gasoline.

This was a reasonably good system as you had about 25 miles to find a gasoline station and refill the tank. There was however a little unease or anxiety as you roared along hoping to see a Shell or Esso sign in the distance. No, there was no Google Maps back then. I never did run completely out of gas on that bike but there were a couple of times it was gasping as I coasted into a gas station.

Running on reserve was okay as long as you remembered to flip that petcock back to normal after you refilled the tank – or the next time the engine coughed you were indeed, out of gas.

My new bike has a fuel gauge and a warning light that flashes when it switches to reserve. It has fuel injection and electronic ignition but still only gets about 45 miles to a gallon if I do the conversion correctly. And I can always Google to find the next gas station.

I read recently that the City of North Bay has flipped the petcock a couple of times to access their Reserve tank of tax dollars. I suppose the City Fathers (and Mothers) know how much is in their Reserves and indeed they might even share that information if someone twisted their arm, but I wonder if they are just doing a quick calculation and trusting that they can refill the Reserve tank at the next opportunity.

Of course, they will not run out of tax dollars – we refill the tank for them every year. It is like driving down the road with a gasoline tanker attached to your car – pumping as you drive. However, unlike my old Beemer, once the City uses its Reserve they cannot simply reset the petcock and return to normal operation.  Those Reserves had special ear-marked purposes. The monies were contributed from taxation and meant to be used for that defined purpose.

Council can change that defined purpose of a Reserve Fund at their whim but if they were putting money aside, for one thing, say a new fire truck, and spending it on another arena then purchasing that new fire truck will need to be deferred until its Reserve fund grows to its target. To grow that Reserve again we will need more taxes. In a tax-stressed city that is yet another burden.

Running a city depending on Reserve Funds and calling in Hydro loans is like driving my old Beemer and forgetting that the petcock is set on reserve, not normal operation. Eventually, as our venerable councillor Maroosis says, you have to refill the tank with new tax dollars. Speaking for this gas station, I feel I depleted – almost down to my reserves.

Here we are, three years later and George is again talking about City Reserves, and how and why we should be using them.  Over at our Condo, we do a Reserve Fund study that takes a very comprehensive look at future expenses in maintaining the Condo. The owners contribute to this Reserve Fund through their fees and so far this has been a successful program. You can be certain that if the Condo Board levied excessive fees to pad the Reserves there would be an inquiry. And yet, the City can take ‘surplus’ taxes and stash them in a Rainy Day Reserve instead of reducing the levy the next year. (I think that is how Don explains it). One can almost guess that over-estimating costs is a way to build reserves without using the public budget process. Still, this is better than the old practice of departments spending their complete budget every year when they could have had a little surplus.

The more things change . . .  just saying.





Bill Walton

About the Author: Bill Walton

Retired from City of North Bay in 2000. Writer, poet, columnist
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