Ottawa has Canada’s highest national family income at more than $90,000 per household and, for the most part, we are living a pretty good lifestyle in Ottawa.
But what happens if the husband or wife loses their job and the family must live with half their income of $45,000 per year instead of $90,000?
No it won’t be a disaster, but the family spending patterns will have to change. Maybe the purchase of the new flat screen TV will be delayed for a year or two. Maybe the planned vacation will be closer to home and all sorts of other choices will be altered and/or reviewed. This is just being prudent, but that debate can be painful whether at home or at City Council.
And just like at home when you and your spouse are talking money and spending, sometimes the discussions can be heated and they often identify completely different approaches to spending and saving. This is exactly what we are seeing with Council during the budget deliberations for 2009.
On one hand are those that are comfortable with 7% increases and the continuance of our spending patterns of the past regardless of the financial forecasts.
Well I, for one, will be fighting for prudence and caution in the upcoming days and I hope that if you agree, you will make your thoughts known to me and your local Councillor. The time is right for your message to get through.
Tomorrow is day six of our budget process for 2009. Last Friday we passed the Police Services and the Library Board budgets and hats off to both organizations for reducing their spending patterns to reflect the economic uncertainty we face in Canada.
As well on Friday Bob Plamondon, a City financial expert, provided Council with additional cost cutting options totaling $27 million above and beyond the $35 million of reductions staff has presented.
Bob Plamondon’s presentation, coupled with the heated debate that followed, clearly framed the budget issues for 2009. Here is my take on the choices that will be debated at Council this week:
1) To what extent should the staff recommended cost reduction options be accepted? Here I believe all options should be accepted except for the community rink grant program and funding for supportive housing services in line with my Leadership Table on Homelessness recommendations.
Please click here to see staff options.
2) To what extent should Council accept some or all of the $27 million in cuts or deferrals as identified by Bob Plamondon to the City Manager as additional options? I believe all of these additional options should be accepted and we have converted them to motions that can be reviewed here.
3) Should Council be taxing to replenish capital reserves because of a shortfall in revenue from the Hydro Endowment Fund in 2008, or should the catch-up be done in another year when the economy in strong? I agree with the latter.
4)To what extent should we reduce spending on strategic initiatives/projects (nice to haves) and redirect this money into tax reductions, infrastructure renewals and reserve fund increases? Given the $500 million in what is referred to as ‘work in process’ and the uncertain times, I believe the responsible choice to make is to limit this type of ‘nice to have’ spending.
I believe following this course of action will result in the most prudent choices being made for the City of Ottawa at this time of great economic uncertainty.
Budget deliberations will continue Monday, Thursday and Friday of this coming week. If you agree with my approach or want to agree/disagree with some specific exceptions, please comment on this blog or contact your local Councillor this week as the budget process unfolds.
The contact list for Councillors can be accessed by clicking here.
This week will be important as we move forward to approve an affordable budget in these difficult economic times and as we work towards making Ottawa a safe and secure place to live for generations to come.