Today, in my capacity as Chair of the Audit, Budget, and Finance Committee, I presented the Draft 2010 City of Ottawa Budget to Council. Upon presenting the Draft Budget to Council, I made some remarks about the Budget, the new process, and the challenges and opportunities which the City of Ottawa faces today and in the future:
Good Morning. I am pleased to present the Draft 2010 City of Ottawa Budget to Council this morning. My remarks will be brief and to the point. There are six points I want to make:
1. A New Process.
The fact that I am sitting on this side of the table indicates the budget process is different.
Today, I am presenting the budget in my capacity as Chair of the Audit, Budget, and Finance Committee.
This year Standing Committees were engaged at the front end of the budget process where estimates were challenged, priorities were established, and a credible budget produced on which to engage in meaningful public consultation.
2. ABF determined what is affordable.
The budgets from the Standing Committees, taken together, would have increased property taxes by about 10%.
The first question for ABF was what could our residents afford?
Given the challenging economic circumstances, and with inflation at historically low levels, ABF determined that the tax increase should not exceed 4%.
This is, of course, above the rate of inflation so, regrettably, we are off base with the fiscal framework that this Council unanimously endorsed.
I believe the city will get to inflationary tax increases, but not if we keep adding new services without fundamentally changing the nature and extent of services that we offer today.
With a 3.9% tax increase we are still asking much of our residents, particularly those on fixed incomes and pensioners, who will see next to no increase in their incomes this year. Sure, we could say “what’s another 1% — what’s another $36 per year for the average household on top of the $142 increase in a 3.9% budget.”
But our residents have a bottom line and so should the city. Let’s remember that a $36 increase is not just for this year. It carries forward to each subsequent year with percentage increase after percentage increase.
3. What is not Cut.
The focus for the consultation period will be on the 80 or so motions for about $60 million that passed ABF to reduce the tax increase from 10% to 3.9%.
More importantly, I want to highlight what ABF members preserved and enhanced in the budget:
- There are no cuts to Arts and Cultural spending;
- There will be 23 additional paramedics;
- A new fire station in Ottawa West;
- Costs associated with the implementation of the Green Bin Program;
- Bridge funding for the Best Start Child Care program;
- Increased services by ParaTranspo;
- Continued investment toward repairing our aging infrastructure; and
- Major technology and service excellence investments.
4. This is a challenging budget year.
Because of the economic crisis, we are facing huge costs associated with the funding of our pension plans.
Staff wages are rising faster than inflation.
Payments-in-lieu of taxes from the federal government are not keeping pace.
Furthermore, the Green Bin program is a significant budget pressure, which ABF recommends be part of the tax bill and not as a separate fee.
We are also weaning ourselves off of one time funding and are not tapping into our reserves to offset operating budget pressures, a huge step towards our number one priority of financial sustainability.
5. Transit will be debated.
I expect Transit will be much discussed.
But to give you some context to Transit spending, between 2004 and 2008 spending on Transit increased 44.8%, while overall city spending went up only 24%. In this budget, spending on transit is rising 10.2% over 2009 by some $33 million.
Over the years we have made huge investments in Transit, but we also need an efficient and economical system for taxpayers and riders.
Remember, transit riders have a huge stake in an efficient system since today they pay for 50% of the cost with their fares and contribute to the other 50% through their taxes. We also need to remember our goal in the fiscal framework is a 55% recovery from fares.
6. This budget can be improved.
That’s why we undertake pubic consultation and have debates at Council.
Perhaps some would want to put more money into Transit. But I ask this: from what other program are we prepared to cut? Or, are we simply prepared to increase taxes to much higher levels?
ABF chose not to cut Child Care, or to cut recreation programs, or spending on arts and heritage. We are continuing to fund social services beyond the levels that are indicated by provincial funding.
ABF members exercised their judgement on a suitable target and how best to get there. No one is happy making spending reductions, but we have to make the city affordable for all our residents.
I am ready and eager to listen to all good ideas from the community and from council to improve this budget.
So over the next few weeks, Councillors will lead a series of Budget open houses and Council will hear from public delegations before we vote to approve the final 2010 Budget.