So why Zero?

8 peasA zero percent municipal property tax increase means cutting many services that Londoners enjoy.  Zero percent means delaying costs and increasing debt.  Zero percent leads to the temptation of the very short-term thinking of selling assets.  And zero is going to hurt most those experiencing poverty in our community.  So why are eight City Councilors (known locally as the ‘Fontana 8’) driving for zero percent for a third straight year?  It is assumed by many that it is simply a voting block who all merrily work together on achieving Mayor Fontana’s campaign promise.  However, I would suggest that it is much more complex than this.

Spending any time at Council and Committee meetings will show you that the Fontana 8 is actually a rather strange coalition of diverse Councilors with diverse perspectives.  And there is no love lost between some members of the coalition, who vote together but could not socialize together for more than a few minutes.  The motivations for zero percent are almost as many as the councilors who vote together on this:

Some are motivated by a strong allegiance to the Mayor.  Whether it be mutual friends, mutual campaign financiers, mutual political parties, or mutual circles of influence, regardless of criminal charges this past year, the Mayor still holds strong social capital with some.  Some members of the coalition will vote in line with the Mayor no matter what, on all but the most benign items.

Some are motivated by the political benefits of holding the zero percent line.  Unfortunately, our voter base is largely cynical, and surveying the voting population on the question of “Do you think municipal tax dollars are well used?” would be highly unlikely to yield positive results.  Minimizing taxes plays well to a large cynical base, and was likely the motivation of the initial promise.  Those seeking longevity in politics will see the value of this position.

Some in the coalition are as cynical of tax dollar usage (or more so) than the general population and truly believe that services can be improved simply by slashing budgets.  These councilors would say that “we need to stop wasting money on golf” even when presented with the fact that our golf program actually brings in revenue, or that “we can save money now that property assessments have gone up” even after being presented with the fact that the City sees no net tax gain from Municipal Property Assessments.  I would suggest that these Councilors are the most dangerous to the ‘tax payer’ as the recklessness with which they cut and sell can actually lead to long-term cost increases.

Lastly, some in the coalition simply see no value in government, and would merrily vote it out of existence or privatize all services.

Although the coalition has held strong through some difficult votes, the individuals are still individuals, and driven by different motivations.  This means that not all are committed in the same way to zero percent.  If you would like to speak directly to Council, and tell them what you feel the role of municipal governments should be, here’s what you can do.

Who Zero Hurts the Most

241 SimcoeThe zero percent 2013 municipal budget, and the subsequent budget cuts, will effect us all in some way by impacting many services and future tax rates.  However, the two cuts that I believe will hurt the most are those to affordable housing and to social housing.  I believe these will hurt the most as they will have immediate and serious impact on the most impoverished in our community, particularly those experiencing homelessness.

To understand these cuts, you need to understand a bit about social housing in London.  There are two municipal programs: The first is new affordable housing, which is that which  the city contributes towards, and leads to brand new units; the second is London Housing, which are the many buildings that were downloaded to the City from the Province in 2001. New affordable housing is the focus of our Housing Strategy and the target of 700 new units.  London Housing we manage and maintain, and includes some of the large developments that have gained some notoriety (ex. 580 Dundas, 241 Simcoe, Boullee St).

Cut to new affordable housing

Recommendation 5.3 of the Council approved London Community Housing Strategy is to “Maintain the annual $2 million City investment in new affordable housing”.  This annual investment is a municipal commitment to housing that has been used effectively to leverage at a 7:1 rate investment from the province, the feds, the private sector, and the not-for-profit sector in housing.  This allowed us to come close to our last 5 year goal (2005-2009) of 1200 new units, and has us on a good path towards a 5 year goal (2010-2015) of 1000 new units.  This gives some hope for putting a dent in the housing wait-list of over 3000 family units.  ‘New units’ are created using a “toolbox approach” which can range from rent subsidies ($2400/year) to new high density units ($145,000 per unit).  This toolbox approach allows us to meet the varying needs of individuals, and also mix both short-term, quick solutions to meet the need and long-term solutions to prevent future crises.  When building, the City never builds itself, but partners with the private sector to ensure both efficiency and quality, with the off-spin of job creation.

So, what Council is proposing is an annual cut of $1 million to this fund.  This will have a severe and immediate impact on our ability to create new affordable housing, and particularly those solutions that are the most long-term (for example, subsidies are cheap but only last for 5 years, new unites are expensive but guaranteed for 25 years).  What this equates to for those working at street level is the inability to move people out of shelter and into housing.  This leaves people in both less humane living situations and in scenarios that end up costing the system more in the long run such as shelter, hospital, psychiatric facility, and jail.  This cut is a decision by our municipal government to make the homelessness situation in London worse.

Reduction to London Housing services

The proposal in regards to London Housing (ie. existing social housing downloaded from the province that the City of London now maintains) is a reduction of $481,000.  This will be achieved by: eliminating summer day camps for kids on site; elimination of paid off-duty police patrols; reducing grass cutting from weekly to bi-weekly; reduction of twice-weekly garbage pickup to the regular City cycle (which was implemented in 2009 due to the stench from accumulated garbage in large developments).

During last year’s budget deliberations in which they were proposing cuts to new affordable housing, some councilors were clearly confused about the difference between the two programs: new affordable housing and London Housing.  They bemoaned the quality of London Housing, speaking of ghetto-ized poverty, to excuse not creating any new affordable housing.  And it’s true, what we have inherited from the province is not always the best, but this is a silly reason to not build new and better.  Also, at the same time that Council bemoaned the quality of London Housing, they are now proposing cutting the very budget that makes these sites a little bit better.

So, we recognize that these massive developments are not the best long-term models for social housing, but we have them now, and must maintain them as best we can as a far better alternative to individuals and families staying in shelter.  To cut London Housing service budgets is a choice by Council to further ghetto-ize those in social housing.

The Worst Idea of All

In yesterday’s post I highlighted why the whole idea of this Council being the ones to save us money is largely smoke and mirrors.  In the same way, driving to zero does not necessarily solve financial difficulties, and may in fact make them worse.  However, what I didn’t mention in yesterday’s post was the worse idea of all: selling off assets.

See, what is becoming clear is that although the Fontana 8 got elected on the wave of public cynicism about the handling of municipal tax dollars, they are beginning to realize that there is no magic bullet to make things cheaper, particularly when you are trying to mix austerity staffing with stimulus spending (under the rubric of job creation).  In trying to keep taxes low while fast-tracking greenfield residential development, industrial land purchasing, and some pet job-creation projects, things are getting beyond thin (hence the debt mentioned yesterday).  The hope was to trim the fat, but they didn’t realize the budget was already of Lance Armstrong proportions (not that we’re cheating, no amount of blood doping can change a budget’s numbers).

So, when the cash is tight, revenue is relatively stable, and expenses are already minimized, where do you look?  You look for a goose that will lay a golden egg.  In the case of London, Council is looking for assets that can be sold off for immediate capital.  This is a terrible idea.  The thing about an asset is that it’s an asset.  Whether it costs us a bit but has big spin offs (such as the Convention Centre), or actually makes us a bit of money (such as our golf courses), or makes whole whopping amounts of cash (the London Hydro loan), these assets are long-term value for the taxpayer.  Take the London Hydro loan for example which pays us approximately $4.2M annually in interest.  We could demand immediate repayment of the $60M for some quick cash, but would then need to replace the $4.2M annually of interest payments with tax increases going forward.

What the selling of assets equates to is the most short-term of financial planning, it’s seeking political glory at the expense of future tax payers.  Yes, I want good projects to happen in our city, but not at the same time as we are slashing services to our poorest neighbours, and passing on debt to our future selves and our kids.  Oh, and if you were wondering, the farmer who slayed the goose who laid the golden egg found no gold inside and he and his wife were forced to become labourers.

Do you have a problem with this kind of budgeting?  Well, here’s how you can get involved in suggesting something different.

You may want to double-check your math

The ultimate stated goal of the 0% tax increase is to save you, the taxpayer, money.  This sounds like a fine goal, because after all, who doesn’t want to save a little money?  In fact, TransUnion has reported that average Canadian non-mortgage debt has risen to $26,768, meaning that we are all feeling a financial pinch in one way or another.  If there’s a spot where we would like to save a bit of money, it would certainly be on taxes.

So, let’s look at the math of the proposed tax savings.  The Fontana 8 are presenting themselves as the fiscally responsible choice, equating this with lower taxes.  Does it add up?  Are the 8 saving you money with their proposed cuts?  Let’s look at deferred costs, increased fees, reserves, and debt.

Deferred Costs

There’s saving the tax payer money, and then there’s ‘kicking the can down the road’.  By this phrase I mean simply taking expenses we have to pay, and waiting to later to pay them.  Whether it’s delaying service to our City vehicles ($543,000), delaying funds for accessibility adaptations ($561,000), delaying the neighbourhood hubs ($93,000), delaying the In Motion health promotion project ($40,000), delaying the new fire service training tower ($2,398,000), delaying new bike lanes ($110,000), delaying purchasing new landfill properties ($1,000,000 in 2014), delaying building a new fire station (700,000 starting in 2017), delaying Commissioners Rd improvements ($5,250,000 in 2020), delaying purchasing industrial land ($600,000), and delaying replacing buses ($500,000), you might be shocked to learn that over $4,800,000 of ‘cuts’ for 2012 (not to mention going forward projections) are things we’ll just have to pay for later.

Increased Fees

So, if it’s about saving you the tax payer money, it shouldn’t mean leveraging more money from you in other ways, should it?  Well, you would be wrong.  Through increased recreation facility fees ($137,000), building approval fees ($19,000), fence inspection fees ($5,000), rental unit licensing fees ($180,000), bounced cheque fees ($6,000), and taxation service fees ($59,000), $406,000 of tax reduction is done by increasing our fees.

Raiding Reserves

Reserves funds are NOT rainy day funds, they are the chequing accounts for our different City programs that we use to pay our bills.  So, when a program or division needs to spend money, having cash in the reserve fund means they don’t have to borrow to spend, saving us $1.4 million in interest payments this year alone.  This is why healthy reserves are a major part of our ‘triple A’ credit rating.  Much of the money in reserves is already accounted for in anticipated bills or contracts already signed.  Of the $191,000,000 in reserves, $113,000,000 of that is already planned to be spent.  So, this isn’t just piles of cash we are sitting on.  However, once again we see a proposed $1,000,000 reduction to the Affordable Housing Reserve Fund.

Debt

The greatest hit to the pocket book, as any family knows, is to put operating expenses (ie. food and mortgage), onto the credit card.  So, increasing debt has not only negative long-term consequences, but exponential negative long-term consequences.  No Council can claim to be fiscally responsible if they are shoulder future Londoners with more debt while ‘saving us money’.  Guess what, this is exactly what is happening.  Prior to 2010, we were in the process of paying down our debt, which costs us $60,300,000 annually in servicing costs.  In 2010, our total debt was $319.8M, but with the change to taking on more debt, we are now sitting at $347.2M in debt.  And the plans of our 0% Council?  To have us at $477.1M by 2014.  Yes, that’s right, the 0% tax increase has come hand-in-hand with and 8.6% debt increase to date, with a projected 4-year 49% debt increase.  If rates hold the same, and we reach the forecasted debt level, we will be paying $22.2M more in debt servicing in 2014 than we are in 2012.  Even if we start holding debt even as of 2015, our debt servicing costs by 2020 will be $91.3M, or about 50% more than they are now.

Does the math from this ‘fiscally responsible’ Council worry you?  Here’s what you can do.

Third verse, same as the first…

…a little bit louder, and a whole lot worse.

This line from a popular camp song is a good summary of the London Budget 2013.  Because we’ve been down this road before, twice before, and again we find ourselves facing the reality of a campaign promise of 0% tax increases for four years.  So, the goal is the same, but the proposed results get worse each year.  Here’s just some of what we’re planning on cutting this year, and what staff have highlighted as the implications.  Want to see the full list?  Then check out this handy page.

1) Reduction in accessibility compliance 

“in order to ensure compliance, the City will incur all implementation and maintenance costs. Without sufficient AODA funds, the costs of compliance will fall to individual service areas. There is concern that meeting these standards may cause detrimental impacts to service levels.”

2) Cutting in half funding for new affordable housing

“Opportunities such as aligning funding and increasing supports to people once housed to reduce shelter beds and shelter usage, and focus on permanent solutions to homelessness in London under London CAReS, Hostels to Homes (or similar initiative) will be compromised.”

3) Eliminate funding for green bin pilot program

“There is an environmental risk that the targets set by the Provincial government for waste diversion will not be met. This can have an impact on other parts of the waste management system that require approvals from the Provincial government.”

4) Further delay of Neighbourhood Hub community building strategy

“Losing time in the implementation of neighbourhood friendly strategies that enhance quality of life in the city, with potential impacts on attracting families to London’s neighbourhoods. We will be three years behind planned implementation in 2013.”

5) Decrease of staff doing road patching

6) Elimination of weekend sidewalk plowing

7) 10 year moratorium on new bike lanes

“Council has accepted the Transportation Master Plan including cycling infrastructure improvements to promote a more active community. Without the Bike Lane Program, the network will continue to be discontinuous and not encourage growth of the cycling community. With more bike lanes, we can progress towards a continuous system and encourage more people out of their automobiles and reduce congestion & pollution around the City.”

8) Reduction in social housing programs

Eliminates 10 year repainting of units, summer kids programs, off-duty police patrols, reduces grass cutting to bi-weekly, and decrease garbage pick-up.

9) Library – Elimination of Sunday service

10) London Transit – Reduction in service hours

“Service level reductions on both the conventional and specialized services will result in reduced ridership which will impact the future levels of Provincial Gas Tax allocations received. The extent of the ridership losses will be dependent on a number of factors including whether the cuts eliminate the possibility for a transit trip entirely, or they result in a service that is unreliable to the extent that other modes of transportation are sought out. The most significant impact of the service reductions will be experienced by those transit customers who have no alternative, and depend on public transit for their mobility and access to the community.”

It’s Your Money

The 2013 municipal budget season is upon us.  I will be blogging regularly on the topic over the next few months, but wanted to highlight at the outset why this is important, and how you might get involved.  Whether you are a homeowner paying property taxes, or a renter paying rent, it’s your money that is used by the Corporation of the City of London.  And it’s a lot of money, almost $500,000,000 in just the tax levy supported portion of the budget.  This money is important, because it effects the things that you actually interact the most with in your everyday life: water, roads, neighbourhood design, police, fire, libraries, public transit, road plowing, and street lights.  Yes, we get far more excited about our federal politics, but it’s often the municipal items that mean the most to our lived experience.

So, if it’s your money, and if it’s a lot of it, you might want to have a say.  Fortunately, the City is working hard this year on giving you that chance.  If you want to learn about the budget and play with the numbers, you can attend the “Build a Budget Workshops”:

Build a Budget Workshops

Saturday January 12, 9-11am or 1-3pm

City Hall Cafeteria

Far more important than that, however, is the opportunity to talk directly to City Council, and let them know what you think of particular budget items.  Council is holding a public participation meeting to give you the chance to do just that.  It’s very simple, you show up, sit in the gallery, and they will ask if anyone has a comment they would like to share.  You go to the mic, and have 5 minutes to have your say.  I strongly recommend exercising your democratic rights and giving it a try:

Budget Public Participation Meeting

4pm, City Hall, Council Chambers

Let’s Keep it Together

In a follow-up to my last post about the importance of relationships, I wanted to speak to public participation and the things that citizens say.  Because let’s be honest, I’ve often shaken my head at the things that people say in public participation or electronic submissions, even if I support their general premise.

In the report going to Planning and Environment this week regarding the concerns about stench at Orgaworld there are some perfect examples.  Here is an analysis by the company of the 2000 stench complaints, taken from the report:

a. Following the abatement system retrofit in October 2010 and up to the end of July 2012, 71% of the complaints that Orgaworld has received are coming from the same six households.
b. One of the above six households called in multiple odour complaints when the plant was not in operation.
c. We have received complaints when the wind was consistently blowing in the opposite direction.
d. City representatives have informed PLC members at a meeting that some odours being
attributed to Orgaworld were in fact due to the City Landfill.
e. We have received complaints from individuals as far as 20 km away.
f. People claim they have been smelling the Orgaworld plant for the past 27 years (please note we have only been in operation for 5 years).
g. A resident recently rated an odour as being a “10” on a scale of 1 to 10, while a Ministry
official classified it as being a “2” and a light intermittent odour.

Let’s be honest, complaints about odour are legitimate, but there is nothing to be gained from piling on.  In fact, you can quickly lose your credibility with a bit of hyperbole or irrationality.  We saw this in the methadone clinic public meetings, where interesting concerns like crossing the road from a bus stop were over-shadowed by “Won’t anyone think of the children!”  I saw this the other night at planning when concerns about demolition in a heritage district turned into personal attacks and yelling.  You see this when citizens both complain about sprawl and about building up (cf. BANANA – Build Absolutley Nothing Anywhere Near Anything).

If you want to have a voice that’s heard, you’re going to have to keep it together.

It’s All About Relationship

This past Monday I had the privilege of spending the afternoon and evening with Councillor Sandy White.  I won the opportunity by completing a survey on the City of London website during Local Government Week.  Sandy and I spent some time chatting in her office, then much of the day was spent sitting with her at the Planning and Environment Committee meeting.  One of the things that was particularly interesting from the experience was seeing the many interactions that councillors have with constituents.

One of the things that this solidified to me was the importance to building positive relationships.  It was clear from my six hours at City Hall that although London is large, the doors of the Hall are quite wide open (and councillor office doors are literally so).  Councillors, staff, applicants, media, and constituents mingle freely in offices, cafeterias, hallways, and Council Chambers.  Although procedure gives things the appearance of being bureaucratic, everything is much more open than you might think.  To me, this is a good thing.  Knowing a councillor checks all of his or her emails, phone calls, facebook messages, and happily stops and chats with whomever wants to, is very encouraging.

Because councillors are open, personable, and as politicians are often relationally-focused, how you interact with them matters.  Email out-bursts, social media spamming, or public attacks are not likely to be easily forgotten.  Similarly, in the context of planning, how the applicant relates to the City matters.  Being insulting, condescending, or pushy can make it harder for Council in situations that require give-and-take on both sides.  The same goes of community members and organizations.  Respectful letters and well thought out verbal statements are much more meaningful than emotional tirades.  And the same goes with staff.  It was clear that staff spoke to how applicants were working with them on a issue, and this impacted their interest in expediting processes.

This is not to say that processes are unfair, or that friends receive special treatment.  Rather, it’s to say that in working with the City, staff or councillors, there is nothing gained from being rude, but much to lose.  And this doesn’t go for just politics, I believe this is an important principle for life in general.  Your ability to have influence so often comes down to your ability to foster positive relationships.

He’s Right

Councilor Van Meerbergen stated:

“It is not the case that [the] electorate is guided or motivated by the levels of communications pumped out by councillors on City Hall expense accounts. Citizens involve themselves in politics and policy-making when they have material interests at stake, primarily threats to the peaceable use of their property, the proper provision of basic city services or the threat of rising property taxation. Threats to these material interests motivate action. A lesson you and your colleagues ought to remember.”

At first blush, this seems like a depressingly cynical statement, that it is solely financial interests that motivate citizens to concern themselves with municipal politics.  However, in a lot of ways, the Councilor is correct.  There are plenty of public engagement exercises by Council, some legislated, some as additional activities; those that are best attended are those with financial implications.  Or, look south of the border, the presidential debates are a battle over who will do the best for the economy.  For swing-wards, the 2010 election in London  was largely defined by whether one was supportive of the 0% tax increase or not.  The further the electorate is from the machinations of City Council the more likely they are to see Council as simply picking their pocket, and people tend to be least engaged at the municipal level.

Looking towards the 2014 election, it will become clear that maintaining 0% without cutting ‘core’ services is impossible.  Council will either bail out from 0%, or cut services deeply (while also tapping into reserves and increasing debt).  Politically, what councilors choose to do will be a gamble on what the electorate care most about: saving money, or strong public services.  In west London, Van Meerbergen is already putting all his chips on the first option, and I’m sure he’s not wrong.

Which brings us full circle to where Van Meerbergen’s comment first came from, which was a response to a survey by citizens to explore how councilors do citizen engagement (results posted tomorrow).  As Brian Gibson demonstrates, there is an increasing interest from the electorate at the municipal level.  If this grows, it will change both the way politics is done in London, and in the long-term the face of the City itself.  If it comes to nothing, the pocket-book voter will continue as the majority, and a lesson will be learned.

The Politics of Development (Part 6)

This is the final post in the series, which you can read in full by downloading the pdf version if you like.

When it comes to planning decisions, politicians hold ultimate sway.  Although the Planning Act and the Official Plan provide some policy, and the OMB serves as a court to settle disputes, there is leeway to be had in changing zoning, and land use designations with enough votes.  From smaller issues like the number of trees on a site, to big issues like doubling the size of a tower or shifting from low density to medium, political support has direct financial implications.  These financial implications are not just for the developer, but also for the skilled labourers, trades people, and engineers, where a significant lull in work impacts directly on well paid Londoners.  There is a lot of money at stake, and there is a lot of power at City Hall.

This is why intensification rates, official plans, development charges, and incentives are very important.  They set the direction for some of the biggest flow of money within our community.  For example, as alluded to in this post, development charges are currently paid by taxpayers for residential development in the downtown core and Old East Village.  Although this initially had little effect in the 1990’s, it has been a part of the picture of the doubling of the number of people who live in the core since the City also began investing heavily in the area.  This is very healthy for our City and a direction I strongly support.  As I have learned through affordable housing, if we are going to rely on the private sector to meet our planned targets, then the right incentives need to be in place.  Another example of this would be brownfield development.  Brownfield development is a goal of any community, but it is also very often a money pit (unless you’re talking communities like Toronto with massive value per square foot).  This means that it won’t happen unless a) the City does it ourselves, or b) the incentives are there to make it profitable for the private sector.

So there is a lot of money at play, and a lot of politics involved, which frequently leads to the discussion of campaign donations.  The development industry is the largest donor to municipal political campaigns.  And this isn’t just a London phenomenon, it holds true across municipalities in Ontario.  I would not insult any Councillor to suggest that the maximum allowable contribution of $750 would sway a vote, because I don’t think it would.  But developers, like any interest group, are no fools and they donate for a reason, if only to open a relationship or create a positive environment for development.   When city staff recommend a refusal of a developer’s planning request, it still needs to be voted on by Council, and the stakes can be high.  When the Official Plan is reviewed, and the urban growth boundary is part of the discussion, the stakes are enormous.  Research by Robert MacDermid from York University has uncovered the important role that the development industry plays in campaign financing.

This obvious link between finances and politics brings out the most cynical side of many.  Particularly in cases where those in the community who choose to speak out are overwhelmingly opposed to a particular component of an application, yet the Councillor votes for the development.  Cynicism can cause the loss of objectivity, evolving into stereotyping of an entire industry.  This, I fear, leads to a lowering of the whole conversation.  Ill-will builds between community members and the businesses that develop their communities.  Instead, I would hope that relationships can be built to foster understanding.  Where understanding exists, people can respectfully disagree with each other, or can agree on some pieces of an application but disagree on others.

My ultimate goal in writing this series is to try to improve the process of developing London from all sides.  I hope that respect can be shown towards developers from community members, vice versa.  The best outcomes for our city will come from all of us working together.