Ottawa passes non-controversial budget by Rawlson King
Recently, Ottawa mayor Jim Watson proposed a non-controversial budget, which was approved and applauded unanimously by Council.
The budget included a 2.45 percent tax hike for urban residential and commercial properties and a 2.4 percent hike for rural properties. The tax increases will mean an average hike of $75 for urban residential properties, $60 for rural properties and $111 for commercial properties. The total tax-supported budget for 2011 will set operational spending at $2.4 billion and allocate $622 million for new capital projects. This honeymoon budget underscores Watson’s commitment to his campaign promises.
During the 2010 municipal election campaign, Watson promised to cap tax increases to 2.5 percent per year, over the next four-year term. Whether this target is realistic remains to be seen, but at least it is a more realistic proposal than the “zero” tax increases promised by the previous mayor, Larry O’Brien. Over the last three years, during O’Brien’s term, the City passed tax increases of 4.9 percent, 4.9 percent and 3.8 per cent, totaling an average of 4.5 percent. Along with the tax increases, residents of the City received liberal doses of O’Brien’s ideological rhetoric on more business-like government, but little in terms of strong, conservative fiscal management. During O’Brien’s term, Ottawa residents were dismayed by wanton examples of waste, which included the $100 million cancellation of the first light rail transit project and an additional $100 million spent on a new bus garage.
Watson’s return to the Council chamber marks a renewed commitment to better fiscal stewardship. As a first step, the new mayor identified $22 million in management efficiencies and reductions in corporate overhead. Hopefully, over the course of the next four years, Watson will continue to work to eliminate wasteful program spending and redirect those savings to improving priority services, repairing crumbling infrastructure and re-invigorating the City’s cash reserves.
Other ideas that Watson might want to consider concerning future budgets are implementing twice annual budget variance updates that compare projected to actual spending levels for departments and major projects and managing each branch and department budget separately with clear mechanisms to ensure budgets are met, and that major capital projects, such as the Lansdowne redevelopment, can be monitored in a unified manner.
Concerning staffing, Watson should consider a temporary hiring freeze, cutting staff overtime and absenteeism by 10 percent and implementing a comprehensive performance management systems to ensure that City staff are held accountable for results. Offering generous incentive programs to City staff to boost efficiency and identify and reduce waste should be considered as well.
A new set of budget guidelines for drafting the budget should also be implemented, which should consider: prioritizing future capital expenses, freezing current expenses at previous levels, establishing user pay policies, implementing better, long-term life-cycle planning and building up City cash reserves to manage cyclical and economic downturns.
Despite the implementation of more long-term planning, Watson should ensure that the budget continues to be annual process that provides for maximum input by both residents and City Councillors. In the last election, O’Brien was highly criticized for proposing top-down budget making. The new mayor must guard against such an inclination and ensure that ordinary residents and their representatives on Council have a fair chance to contribute to a fulsome conversation on how City tax dollars are spent.
In the interest of better consultation, the mayor should not change funding envelopes, such as transportation, without full public deliberation, especially if it concerns the future elimination of transit routes.
Fiscal restraint and prudence are necessary to achieve quality-of-life improvements, but they should be considered a means to enable effective and affordable investments in our community. I believe the new mayor understands this, and indeed, his budget gave consideration to a more efficient rapid transportation system that considers cyclists, pedestrians and transit users, repairs our city’s ageing infrastructure, makes our environment cleaner, creates a diversified business environment that fosters more economic growth, and renews investments in social housing.
This budget, on par, was a success for the new Mayor, but an expected one after four dysfunctional years and an election that saw an influx of several new Councillors. The real test will be the next budget, when the Mayor and Councillors will have to contend with such challenges as inflation and a serious debt situation in Ontario, which will constrain future provincial spending in municipalities.
Rawlson King is an author, journalist and communications professional who ran for Ottawa City Council in September 2010. He blogs occasionally at www.rawlsonking.ca.