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Opinion: It is obvious that the 'emperor has no clothes'

'The way this item was handled indicates the fuzzy thinking that is costing taxpayers’ money'
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budget

By Don Rennick, North Bay.

Editor's note: Mr. Rennick's opinion piece is in response to the BayToday article City budget shaved slightly.

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Based on an unsubstantiated rumour that the OMPF provincial transfer was to be reduced for 2019, the North Bay 2019 operating budget item was reduced by $458,555. The province has recently indicated that there will be no cuts in the transfer payment.

This is exactly the type of thing that city reserves could have been used for and the way this item was handled indicates the fuzzy thinking that is costing taxpayers’ money. Instead of reducing the revenue estimate, the amount of the transfer should have been budgeted at the same or similar amount as that of 2018. If the transfer did get reduced, the shortage could have been managed at the end of the year through other departmental surpluses or a transfer from reserves.

If this announcement from the Province had been received after the tax levy has been approved and the tax rates set, taxpayers would have overpaid taxes by $458,555 and that money would go straight toward increasing the city bank accounts to increase our already unnecessarily high accumulated discretionary reserves. In addition, because the city insists on comparing last year’s taxes to the following year’s expense estimates, the resulting tax increase would be stated as lower than actual.

The budget has been in the hands of council since January 30th. When asked if he would support the suggested 7.93% increase, Mayor McDonald indicated that he would be withholding any comment until he had seen what was in the budget. A yearly budget is by far the most important item to come before council every year and our mayor suggests that has not looked at the figures even though they have been available for two or three weeks. He offered no explanation for the delay in attending to this overriding responsibility. Possibly he’s been too busy “growing the city”.

The mayor further suggests that he does approve the capital budget increase of 2.4% since it is an investment in infrastructure. The net capital budget wish list is up 7% from last year and the capital levy in the operating budget is up by 46% or $3.2 million dollars over last year. Where the mayor gets 2.4% is a mystery. He must be looking at the capital budget of some other municipality!

The comment coming from various sources that this budget is necessary to “maintain services” is a red herring. Adding at least five new staff positions, a police budget that is increasing by over 6.5% at $1.2 million, a million dollars to Invest North Bay along with unsustainable wage and benefit packages are the reasons for this unacceptable increase. 

As far as the current budget process is concerned, it is obvious that the “emperor has no clothes”. Taxpayers need to contact the mayor and council members and remind them that raising taxes is not an option. The days of allowing expenses to increase beyond taxpayers’ ability to pay and papering over those increases by using long term borrowings and manipulating surpluses and reserves are over.

D. D. Rennick CPA, CA




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