Friday, April 16, 2010

Ottawa Annual Budget Contents

 
Declaration of annual budget content is necessary!
City of Ottawa

April 16th, 2010


The controversy over the recently adopted City of Ottawa 2010 Budget (Jan 2010) is still unresolved.

The “partial” budget increased property taxes by 3.9 percent.

A few days ago (April 2010) Council adopted the 2010 Water and Wastewater Budget with a rate increase of 9 percent.

Have you had a chance to comment on the Water Budget before it was adopted? Where are the detailed comparative annual numbers for the Water Budget? I haven't seen a production of the information yet. The 9 percent increase is despite the fact that water consumption has decreased due to family taxpayer's great conservation attitude. The result for you. You conserved too much water so the city is going to go for a minimum charge and then soak you for anything above that. You pay more because you used less water.

The combined Property and Water TAX increase is somewhere around 6%, and totally ridiculous. Councillors just didn't want you to know the real percentage increase in taxes that you were facing.

Now, I don't know about you, but if you are preparing a budget all relevant categories must be addressed in that budget. A budget is not a budget if the budget is only part of a budget.

Councillor Peter Hume seems to think that having one budget, but really having two budgets, without informing the taxpayer, is just fine. Too bad he will not be running for Mayor in the upcoming 2010 municipal election. If he did, he would finally have to look for a real job.

Without notifying the resident taxpayers, Council and Senior City Staff separated the budgets into what is called (1) a “Taxpayer Support” Budget and (2) a “Rate Supported” Budget. Isn't a taxpayer and a ratepayer in the City of Ottawa the same person? The cost of city operations come from the same pocket. Your pocket!

If you are a resident taxpayer, renting rather than owning your property, you pay 1.7 times the tax rate of property owners. And you don't think you have a voice! You use less space, use fewer costly city services and you are privileged to pay a premium for your conservation. This is becoming a trend. You can add water and electricity to this trend. Then you can add property taxes. The more you conserve, the more you pay.

Two or even three separate budgets would be appropriate only if all of the separate budgets are consolidated into ONE OVERALL BUDGET, to be voted on at the same council meeting once each year. This would reflect some respect for the taxpayer.

The budget questions arose in Jan 2010 when I indicated in my Blog that the 2010 Budget for salaries, wages and benefits (employee expense) was reflected at $1,221,997,000 while the 2008 audited financial statements stated employee expense at $1,176,349,000 in that year. As employee expense is rising at approximately $60 TO $70 million a year (can you imagine) at the City of Ottawa, the 2010 budget figure did not make any sense. Do the math. The 2010 Budget should have reflected total employee expense at approximately $1.3 Billion dollars or approximately $78 million dollars higher than budgeted. That's a lot of money!

During the controversy, OTAG (Ottawa Taxpayer Advocacy Group) and our local CFRA radio asked city staff and/or councillors to clarify the matter and this is what was offered. Again, it was Councillor Wilkinson that took the “bull” by the horns and dragged the answer from City Staff. She has the right attitude which is important, but I am continually surprised by what City Councillors do not know. She has my vote.

City Staff responded as follows to the difference in numbers between the audited financial statements and the annual Budget:

1.      The Tax Supported Budget does not include the employee expenses associated with the Rate Supportedwater and sewer Budget which are  included in the financial statement number
2.      The audited financial statements include the expenses of our local boards and agencies, such as Ottawa Community Housing Corporation
3.      The audited financial statements include numerous accounting adjustments for post retirement and post employment expenses which are required under the Public Sector Accounting Board reporting requirements.

It is unfortunate that Council did not inform the taxpayers of Ottawa of these facts prior to discussions of the 2010 Budget.

Therefore, be it resolved that, the 2011 Budget must include the following and be so declared by Council prior to 2011 Budget discussions:

Tax Supported Budget projections

Rate Supported Budget Projections

All Local Boards and Agencies budget projections

Projections for retirement and post employee expenses.

This means that all departments, agencies, boards and rate supported programs submit and incorporate their individual budget projections in the annual BUDGET DISCUSSIONS. Further, that requires a directive to these groups by Council. As a result, the information will be there for all to see, question, agree with or dispute. This is democracy.

Council must also require all other organizations, held by investment or otherwise that changes in fiscal year ending and Budget submission dates must compliment that of the City of Ottawa. Those Organizations or Investments must also make their financial data available to the taxpayer.




Bill O'Malley