Monday, August 27, 2012

Public Workshops on the City of Victoria Budget. Did I mention how impressed I am with Lisa Helps?

Lisa Helps has organized some workshops to get public input into the budget for the City of Victoria for the next three years.    The City is trying to reduce spending by $6,000,000 over the next three years, this will be a very hard task to do.

First Session
August 29th 7 pm
Garry Oak Room in the Fairfield Community Centre.

Second Session
September 12th 7 pm
James Bay New Horizons located 234 Menzies Street

The council has set limits to how much it would be willing to raise property taxes over the next three years, a cumulative increase of no more than 9.75%.   This is an extra $10,500,000 in revenues from existing properties - new buildings bring in new revenues, the problem is that this leaves the City short of what it needs to have in place for the 2016 budget, it is this gap that Lisa is looking for input into how to deal with.

The City can close this gap in three ways - higher revenues, lower expenditures, or a combination of the two.

There are several areas in the budget which can not realistically be changed - Fire, Police, Library, and debt costs.   The Conference Centre, water and sewer, about 16.5% of the budget are designed to be revenue neutral.   Taking all of these out of the current $194,760,007 budget leaves $94,779,365 out of which the savings have to be found.    What this means is what initially looks like a 3% savings that has to be made, in reality it is more than 6% that has to be saved from the parts of the budget that can be effectively altered.

The easiest place to find the money would be to reduce the transfers to the capital budget but for too many years the City has not out enough money aside for the capital budget and waited too long for a number of projects to be started.   The current planned capital expenditures over the next 20 years is $906,853,744.  This sounds like a huge number, and it is big, but not insurmountable.   It does mean finding an average of $45,000,000 per year which  is covered through grants, cost recoveries, equipment replacement reserves, capital levies, and debt.    We can not afford to reduce the capital budget and this further reduces the parts of the budget where savings can be found.

The problem with where there might savings are in a part of the budget the public does not know enough about to be able to give good input on.   The only place you could realistically do much would be in the back office functions of City Hall.  I know I do not know enough to be able to tell you if the City has too many staff in corporate services or the finance department.   The only way to get this information would be to get the staff to give you the answer. but this means getting the staff to create plan to make some of them unemployed and others to work much harder.

If finding reductions in spending is hard, I presume people will want to look to higher revenues.   The only places I think this could happen are in higher fees for parks and recreation services and raising the cost of parking in the City.

This will not be an easy task.  It may be time for the City to consider doing something radical like divesting itself of several of the parkades and surface parking lots.   The sale would bring in money to replenish the capital reserves or substitute for the capital levy.  The sale would also mean an increase in property taxes which should be more than the net revenues the parkades bring in but I do not have enough detailed information to be certain of that.

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