Letter to Council

In light of the current multi-year budgeting process at City Hall, I drafted this letter on behalf of the London Homeless Coalition:

Dear Mayor Brown and esteemed members of London City Council,

On Thursday, October 8th the London Homeless Coalition hosted activities for World Homeless Action day. These activities served to highlight that homelessness is still a significant concern in our community, yet we are in the process of solving homelessness together in London.

As London City Council considers new spending priorities for multi-year budgeting, we as the London Homeless Coalition wanted to take a moment to write to you about our vision for doing better around homelessness. The Coalition exists to advise, shape, and coordinate community responses to homelessness in London, including what we can do as a municipality.

At the poverty conversation on October 17 (thank you to several of you for attending), Sister Sue Wilson shared with us that because poverty is human–made, it can also be undone. We would echo this same comment for homelessness. At the same forum, Deputy Premiere Deb Matthews shared that it was because of feedback received in consultations in London that the Government of Ontario has included the goal of ending homelessness in their Poverty Reduction Strategy.

We, as those most invested in the homeless sector in London, believe that homelessness is a solvable problem.

So what does this mean for us as a community and you as a Council? This means that we need to use our current resources wisely, and invest new resources in solution-oriented activities. The recent announcement by the Salvation Army of their move away from emergency shelter to housing solutions is reflective of a shift in using current resources wisely. Our latest shelter statistics show us that in fact the number of unique users of emergency shelter is on the decline. Similarly, in spite of a reduction in emergency shelter beds, shelter occupancy continues on average at less than 90%. We believe that this is reflective of the impact of Housing First programs now being delivered by CMHA Middlesex, London CAReS, Homes 4 Women, and others, as well as a housing focus across all agencies in London. We are having impact in the lives of people experiencing homelessness. In particular, we are helping people find home. With money freed up from emergency shelters you are now investing in a massive service collaboration to house street-level women at risk. This is a shift from band-aid responses to permanent solutions, and we laud this shift.

So what about new money and new opportunities? We believe that new money is still required in the homeless prevention system. Although shifts in service delivery will lead to savings in this sector as well as others, sometimes these shifts require investment of new resources. Housing supplements are a good example of this need. Housing supplements are an important piece of the puzzle for Housing First solutions. However, although agencies often have the staff and skills to delivering Housing First, the need for actual supplements remains high. This is an important investment in housing solutions, in solving homelessness.

London has a Homeless Prevention System Implementation Plan. As highlighted above, we are making excellent progress on this plan. So much so that London is beginning to be recognized as a leader in solving homelessness. However, there are a number of components of this plan that are still in process or being developed. A strategy for youth is a good example of this. Youth are the fastest growing demographic accessing emergency shelter. The plan in development will include key ideas for us as a community to solve youth homelessness, and will require some resourcing. This is money well spent.

Solving homelessness is not simply an administrative requirement, a responsibility of the municipality. Solving homelessness together is about community building, and is as important a community building task as the London Plan, transit strategy, and river development. You, as City Council, have an incredible opportunity to lead in this plan by making new investments in the sector. This will set our community up to leverage provincial opportunities given our alignment with their goal of ending homelessness. We believe that this is wise stewardship of municipal dollars, and we look forward to being a partner on coordinating the community to make the best use of these dollars driven by clear outcomes.

We remain available at all times to discuss budgeting or implementation components of solving homelessness together in London. Thank you for your interest in our work.

 

$100 More

100My remarks to London City Council: Good evening, my name is Abe Oudshoorn and I am a professor in the School of Nursing at Western, and have the privilege of serving as the Chair of the London Homeless Coalition. This evening I am coming to you to request your endorsement of our campaign to increase Ontario Works for single adults by $100 per month.

We come to this campaign recognizing that although employment is the only real means to elevate oneself out of poverty, some will find themselves in a position where they require social assistance.  We also acknowledge the ground we have made on poverty in Ontario, particularly around families in poverty and new funds and new initiatives allowing people to maintain more of their earned income.  We also acknowledge the slow and steady increase to Ontario Works rates over time, but at an average of 1 to 1.5% annually, we recognize that in real dollars the rates have declined due to inflation of 2-3% annually.  In fact, we haven’t seen an increase to rates over inflation for about 20 years until this past year, where there was a modest 3% increase for single adults.

Concern around social assistance rates has been a long standing concern in our community, and one that this Council has itself expressed a number of times in the past.  As the London Homeless Coalition, we have seen how insufficient social assistance rates lead to people being stuck in shelters and on the streets, people want to move into housing but simply don’t have the financial means.  The Social Assistance Review Commission, led by the provincial Government, has finally offered some hope of relief on this front.  Among their 108 recommendations was one suggesting an immediate $100 increase to rates for single adults.

The Social Assistance Review Commission final report contains many recommendations, some quite complex and requiring much further work to iron out.  However, this recommendation of an immediate increase does not hinge on any other changes, such as setting a standard to index increases in the future.  It is simple, straight-forward, and practical.  However, as you know, there is no requirement of the government to follow the recommendations of these reports, so lobbying is required to make sure they appear in provincial budgets.

Our hope is that City Council would be willing to add the City of London to the list of those who are endorsing this campaign.  Communication across levels of government is an important role of Council, as we seek to influence provincial and federal priorities that impact our citizens.  Our target for this campaign is that the change would appear in the 2014 Ontario provincial budget.  The London Homeless Coalition has a great working relationship with the City, aided in no small part by the incredible work of Jan Richardson and her team with the homelessness portfolio.  We continue to work together to implement the Community Plan on Homelessness, and recently celebrated and mourned together the unveiling of the London Homeless Memorial.  This collaboration is as strong and as effective as ever.  We hope that you will choose to partner with us on this.

Thank you, Mayor Fontana

thank-youAfter hours and hours of public participation and engagement, several debate sessions, hundreds of pages of paper, and much media attention, Mayor Fontana has relented on his campaign promise of 4 years of 0% and decided instead to focus on job creation.  I have mentioned previously that stimulus spending and austerity cuts are at odds (which are basically representative of his two campaign promises), and that seems to have become clear.  In trying to do more respectful politics, the one thing I have encouraged is that citizens put as much effort into thanking politicians when they support our endeavours as we do in expressing concern when in opposition.  Therefore, the following is an email I sent to the Mayor.  I hope you too will consider taking a brief moment to thank him.

Mayor Fontana,

I wanted to take a moment to thank you for your decision shared in the budget discussion last night to relinquish the pursuit of the 0% tax increase.  In my mind, the service cuts required to get there were too great a price to pay, and I believe that the public participation around the budget shows I’m not alone in this.  Thank you for hearing us.  I know that budgets are very contentious and citizen feedback pulls in all directions.  Thank you for making the decision that clearly was supported by the majority of Council to provide City departments with the funds they need to do an excellent job.

Have a great weekend.

Final Budget 2013 Post: Reserves

The final budget vote for 2013 happens this Thursday commencing at 4pm.  The budget is currently sitting at a 1.2% tax increase, or $5.6 million.  This represents the hard work of citizens to save things like affordable housing, public transit hours, library services, and new bike lane connections.  However, this flies in the face of mayor Fontana’s campaign promise of four years of 0% tax increases.  Therefore, there may yet be a rabbit pulled out of the hat, as signaled by a meeting of 7 of the Fontana 8.

The most likely target to find $5.6 million is reserve funds.  You can find out all about what reserve funds are and the state of London’s reserves in this handy link from City staff.  I had the privilege to sit down and discuss reserve funds with the Director of Finance, Martin Hayward, and there were a few key points I learned:

Firstly, reserve funds are more like chequing accounts than savings accounts.  When we hear ‘reserve funds’ we often think of rainy day funds, like you and I may have some money in savings in case of a financial crisis.  However, reserve funds are all for anticipated costs, they are very specific, and there is no money in there unless we plan on using it.  Reserves are the money we have available to us for day-to-day business of the City, be it today’s spending or next year’s, or next decade’s.  If we didn’t have this money, we would have to take on debt to run the city.

Secondly, building on the first point, reserves are indicative of a plan, and if you change the reserves, you change the plan.  Take for example the graph below that represents a hypothetical reserve fund that is built over time to replace city vehicles.  We put in as much money as we exactly anticipate we need for the number of vehicles we plan to replace.  If we change the contribution, then we are actually changing the number of vehicles, which changes our ability to deliver services:

Reserve Fund

Thirdly, reserve funds act as the key buffer against debt in terms of determining our municipal credit rating.  Debt is the number one determinant, and you can see in this post how debt is set to go up.  However, having healthy reserves is used to mitigate against debt in making the calculation.  That said, for all the glowing talk of having more in reserves than ever (which of course makes sense as we continue to grow as a city), we still fall below the municipal average of reserves against debt.

All-in-all, decreasing our planned reserve fund contributions today means a plan for service cuts tomorrow.  So, if the public is rejecting service cuts now, lets also reject future cuts.

A Better Budget: My Proposal

2012 Budget Staff Proposed 2013 My Proposed 2013
Culture 21.9 22.3 22.3
Economic Prosperity 8.4 8.4 8.4
Environmental Services 16.4 16.5 16.6
Parks, Rec & Neighbourhoods 28.2 28.2 28.5
Planning 4.8 4.9 4.9
Protective Services 145.6 152.9 151.4
Social and Health 71.3 68.4 69.4
Transporation 53.6 54.8 55.5
Corporate and Operations 117.2 122.4 121.3
467.4 478.9 478.3

This budget proposal is premised upon the following avoidance or acceptance of reductions as offered by staff.

Highlights of Reductions Avoided:

  • Cuts to Accessibility for Ontarians with Disabilities Program
  • Cuts to social or affordable housing
  • Elimination of green bins
  • Moratorium on new bike paths
  • Reductions to library services
  • Reduction of sidewalk plowing
  • Increased recreation service fees
  • Reduced investment in London CAReS
  • Reduction to Middlesex London Health Unit
  • Staff reductions (approximately 18 jobs saved)
  • Elimination of double decker bus tours
  • Cuts to Downtown BIA

Highlights of Reductions/Revenues Accepted:

  • Reduced economic development funds
  • Increased service fees and fence fees
  • Deferral of Fire Service training tower move
  • Reduced contribution to Urban Works Reserve Fund
  • Fire Services service review
  • Reduction in capital grant program
  • Reduction in brownfield studies
  • Deferral of “In Motion” funding

This budget is also premised on the following reductions not proposed by staff:

  • Reduction of the increase to Police Services from 3.6% to 2.0%

Other budget reductions for consideration would be changing the Development Charge Exemption for industrial from 100% to some other percentage to be determined, and reviewing the fast-tracking of Storm Water Management Ponds for greenfield development.  Either of these could bring us to 0%, but are of a complexity to calculate that is a bit beyond me.

Overall, I am proposing a 2.3% increase to municipal property taxes, which equates to a $55/year increase for your average property owner, or less than $5/month.  This is the cost of saving housing, bus services, libraries, green bins, etc.  A cost I hope most would be willing to pay.

Update: With changes in assessment growth, my proposal revises to a 1.8% increase.

Update 2: Thank you to the sharp eye of Nathan Smith, I have revised my reduction to the Police Services budget.  I had proposed this believing that they were still adding 16 new officers, but the 3.6% increase includes deferring this new hiring.  Leaving the Police at 3.6% brings the proposal back closer to my original over 2.3%.

Affordable Housing Motion

I will be making the following motion at the January 16th meeting of the London Housing Advisory Committee:

  1. Recalling that London’s Community Housing Strategy was approved by Council in 2010;
  2. Acknowledging that objective 5.3 of the strategy is to “Maintain annual $2 million City investment in affordable housing”;
  3. Recognizing that every $1 of municipal investment has historically leveraged $7 of investment from other orders of government and the private sector;
  4. Acknowledging that best practice in affordable housing is a ‘toolbox’ approach that includes both less expensive temporary units and more expensive permanent units;
  5. Noting that the existing Affordable Housing Reserve Fund is already fully committed to outdraws;
  6. and noting that of the City goal of 1000 new affordable housing units our current Program Delivery and Fiscal Plan is for 614 new units:

Motion: The London Housing Advisory Committee recommends that City Council reaffirm its commitment to the London Community Housing Strategy, in particular objective 5.3 to maintain an annual $2 million City investment in affordable housing.

A Better Budget: Primer

money_on_scaleI have thoroughly critiqued the 2013 London Municipal Budget, so it’s only fair that I offer an alternative.  In fact, I have been asked repeatedly, “What percentage increase would you propose if zero is a bad idea?”  The simplest answer would be to just go with the proposal by the City’s Finance department.  However, I have already highlighted that this comes with increased debt, so I believe there is a more nuanced approach available that both addresses spending, while ensuring the programs and services exist for London’s most vulnerable citizens.  In addressing this, I hope to present how someone can be fiscally conservative, and progressive, and socially liberal.

Before tackling London’s situation, however, I believe a primer in governments and budgeting is useful.  To this end, the current ‘fiscal cliff‘ in the U.S. provides an excellent example of challenges faced in public budgets.  On the revenue side, Bush era tax cuts are set to expire meaning an increase of $388 billion in tax revenue.  At the same time, spending is set to be reduced by $172 billion.  This would mean reducing the federal deficit from the current level of $1.1 trillion to $641 billion, a reasonable goal for a government currently approaching $16 trillion in debt.  This is all well and good, but it means removing $560 billion from the economy, reducing GDP by -0.5%, and pushing unemployment over 9%.  It would lead to deepening of the ‘Great Recession’, which already shows no sign of ending.

So, what to do?  I believe that the U.S. should go ahead with the full proposed elimination of tax cuts and elimination of spending.  Yes, this would mean some pain in terms of decreased household incomes, but the changes are very strongly scaled to income so that those in poverty would see little difference, whereas the top 10% of income earners would see a much bigger impact.  To instead continue to borrow to avoid the fiscal reality means not just delaying the inevitable, but actually making the crash worse when borrowing runs out.  We would have to come up with a new acronym to replace PIGS.  To be fiscally conservative means that when times are tight, we live tight, otherwise your debt to GDP ratio starts to look like this.

Closer to home is the Ontario budget and deficit, which were very well unpacked in the Drummond Report.  I have written about this before, and in my fourth key principle highlights the opinion that governments need to get out of playing Santa Claus, giving out money to everyone to garner support.  In the Drummond Report this includes water subsidies, hydro rebates, tuition rebates, and corporate subsidies/rebates (referred to at times as ‘corporate welfare’).  Local economist Mike Moffat highlights that corporate welfare (and GST reductions, but that’s another discussion) limits government’s ability to provide the programs required to reduce income inequality.  If governments reduce deficit spending and are willing to tackle both revenue and expense sides of budgets, they will actually have more resources to put towards those most in need: fiscally conservative, socially liberal.

The current London budget represents the exact opposite of what I consider good budgeting: reducing debt while enhancing programs that meet the needs of the most vulnerable.  There are areas where we need to start paying true costs, and there are areas where we need to stop giving money away.  However, there are also areas that I believe require more resources.  I will outline this proposed better budget in my next post.