Larry O’Brien

Please see below a memo I sent to Council this morning regarding my objectives and the areas I feel Council needs to focus on to identify savings for the taxpayers of Ottawa during the 2009 budget process.

I want to hear from you! I encourage you to get involved in the discussion by posting your ideas and feedback in the comments section on my website. Also I hope you will participate in the 2009 draft budget public consultations, which are scheduled from November 5th to November 27th. Please click here to view the listing of public consultations taking place across the city.

M E M O   /   N O T E   D E   S E R V I C E 

To / Destinataire Members of City Council File/N° de fichier: 
From / Expéditeur  Mayor Larry O’Brien 
Subject / Objet 2009 staff budget estimates Date:  4 November 2008

In accordance with the Council budget directions the City Manager has tabled staff estimates for the 2009 operating and capital budget. Today City staff also tabled a set of options to address a  $35 million gap to reach a 4.9% tax increase.  Some options are more palatable than others, but the bottom line is that Council has to either accept all of the options presented by staff or bring forward ideas of its own to reach a 4.9% increase this year.  I believe we need to go much further.

Changing economic times have homeowners tightening their belts, spending less and putting off planned vacations or not buying that new car. The citizens of Ottawa want quality services and communities that are second to none, but they also want a city that is affordable and focused on its core responsibilities.

We have seen staff’s budget estimates; now it’s time for Council to engage the public and then pass a budget that our citizens want. Over the next month I will be working closely with Council colleagues who share my belief that a 4.9% tax increase is too high and the wrong way to go. The global economic downturn will impact us all and the citizens of Ottawa expect Council to act responsibly and keep a lid on tax increases. 

We now need the courage to drive further change at City Hall. For two years critics have been telling me that fundamental change was impossible at City Hall. Many said we could not trim staff and now management agrees they can do it.  Many said we could not reduce the budget estimates of staff. It was done this year by the Council Budget Challenge Working Groups to the tune of  $10 million, which is equivalent to approximately 1% off the tax bill. Many said reform of the top-level management structure at City Hall was off limits but recently Council approved the biggest re-organization in the City’s history since amalgamation. 

I think we can continue to reform City government. I want to commend management for recognizing that it is not business as usual at City Hall. I am impressed by the initiative taken by OC Transpo to transform its operations to give our residents more transit ridership without an increase cost to the taxpayer. And management is on the right track by engraining in the culture of City Hall the concept of efficiency/saving targets, reduced staff levels and the restructuring and streamlining of the organization.

But the more difficult decisions rest with Council over the coming month. As far as I am concerned, everything in the 2009 staff budget estimates, much of which I am seeing for the first time, is subject to finance and affordability.

I highlight the following areas where Council needs to focus its efforts after it approves the highest possible level of the $35 million in revenue and spending options presented by staff:

- Existing and proposed capital projects so that investments are limited to core infrastructure.

- Program adjustments beyond what management has proposed.

- Build upon the accomplishments of the Budget Challenge Working Groups and further tighten staff budget estimates.

- Management efficiency targets and additional dividends from the administrative/operations restructuring at City Hall.

- Deeper reform of Ottawa transit

- The 6.4% increase in spending on policing.
 
Finally Council needs to put the increase of the infrastructure levy by 2% into perspective. Is it affordable to do so or should we maintain the current levy and defer an increase to next year?

The bottom line - Without accepting all elements of the staff budget, going from 4.9% to a tax freeze requires about $50 million of changes out of a $2.2 billion budget. I believe this is achievable and I look forward to working with you, City staff and the public to get this work done.

cc:     Executive Management; Leslie Donnelly, Deputy City Clerk

Today City Council unanimously voted for a leaner and more customer-focused organization. The vote came after an exhaustive four hour meeting held behind closed doors to evaluate the City Manager’s plan to simplify and streamline the entire management process at City Hall. I applaud the hard work and prudent choices made as we dealt with difficult issues in very demanding economic times.

This is a very big start to a very big re-organization!

Included in the first changes is the creation of two Deputy City Managers. Steve Kanellakos has been appointed as the Deputy City Manager of City Operations and Nancy Schepers has been appointed as Deputy City Manager of Infrastructure Services and Community Sustainability (Planning). Steve will look at day-to-day operations while Nancy will be responsible for planning, the environment and transit.

The City Manager’s role (Kent Kirkpatrick) has changed significantly and will be focused on moving the agenda of change forward, priority city-wide projects and ensuring financial sustainability. Mr. Kirkpatrick also committed to a staff-hiring freeze until the first quarter of 2009 in order to bring additional changes to the management structure by the fall of 2009.

The objective is to increase value to the taxpayer!

Since my election in 2006 I have been promoting change and transformation at City Hall. With last week’s announcement of the elimination of 100 positions and $25 million in savings, I am now confident we are heading in the right direction. I want to thank my Council colleagues for supporting the City Manager in his mission to make City Hall more efficient and citizen-centric.

Unfortunately this does not happen without a cost. Today we also announced the departure of three senior managers – Richard Hewitt, Stephen Finnamore and Pierre Pagé. They have all served the City well for many years. Pierre Pagé and I have developed a close and special bond that will be missed on a personal level as well.

Good start …but more work to be done!!

I am encouraged to see we are making progress in reducing the size of our workforce and we must continue to work in the best interest of the taxpayers as we enter the 2009 budget deliberations. We are entering difficult economic times and need to tighten our belts now to help those on fixed incomes before it is too late. Yesterday’s problems on Wall Street will be our issues tomorrow.

Here is the press release regarding today’s announcement. These actions are part of cap and cut staffing directions given to the City Manager on June 25, 2008. These early position cuts are the easy ones and my expectations are for options to be brought to Council for an additional 400 cuts at budget time. The next phase will be tougher but I believe we need to make prudent, business-like choices for the 2009 budget process.

My Priorities for Fall 2008: Transit, Taxes, Changing the way we make decisions and Trash

I’ve recently updated the priorities section of my website to reflect the busy legislative agenda set for this Fall.

I am looking forward to working with Council to deliver positive results for the citizens of Ottawa. This section outlines objectives we will have in each of these areas for the 2008 Fall legislative session.

Public Transit

This term of Council we have already had the opportunity to hit the reset button on the proposed Light Rail Transit (LRT) project and as a result Council has approved a new comprehensive transit plan that will solve the congestion problem from the downtown core out.

With a solid vote of 19-4, Council approved this new plan that will provide riders from the east, west and south affordable and reliable public transit that will benefit residents and visitors for decades to come.

We have taken that important first step by approving the network configuration and now in the weeks and months ahead we will begin work on deciding which parts of the system should be built first and I cannot stress enough how important it is for you as taxpayers, riders and citizens to provide your feedback.

Ultimately we need a faster more reliable transit network built from the core out. I’ve always said that any world class transit system starts with a ride down an escalator. That’s why I support the construction of a downtown tunnel to eliminate the bottleneck downtown. We have a second and last chance to get this major investment right and we need your participation to make this vision a reality.

It is never too late to do the right thing!

Keeping taxes under control is still job one!

This year we will actually see a new budget format that the average individual will be able to understand!

Gone are the days of an arcane budgeting system that only a few could claim they understood and in my experience if it is that complicated it is simply wrong minded and needs a fix. With the new format we will actually be able to see where the money is going and where spending is increasing so we can ask why? This is a start to making some real sense out of the budget process.

Council will also give rise to a Budget Challenge Group formed by a few Councilors and supported by financial professionals to evaluate every line item, identify every opportunity to save money and challenge city staff’s estimated budget numbers. While we are doing all of this for the 2009 budget I believe that the budget process should be a year round affair. That’s why I will support the formation of a Finance and Audit Committee during the governance review this Fall to keep our city’s finances in check throughout the year rather than our current rushed budgeting process.

Rising oil prices and changing economic times in Ontario are all working against us this year as we start out on the budget process in the Fall. But we will also have some good opportunities for savings.

For example the City Manager is working on his own plan for $100 M in savings and Council has given direction to develop a plan to trim the size of our organization to cut an additional 500 jobs from this years baseline employment levels and report back to Council. Council has also directed City Staff to identify up to 57M$ in additional revenue options to lower this year’s tax rate.

At the same time the recently completed report by the Mayor’s taskforce on E-Government will also provide significant opportunities for investment in technology to reduce staff and increase efficiency.

Keeping our spending under control, challenging staff’s estimates, working with staff on identifying cuts and making well thought through investments will be the theme of this years budget process.

Transformation - Changing the way we make decisions

At the beginning of this term of Council we agreed to review our decision making process at the mid-term mark that is coming up in the Fall. That means everything from committee process, Council meetings, delegated authority to Councillors, arms-length Commissions and so forth.
To put it in easier terms: How do we avoid 3 hour debates on small planning matters at a city-wide Council meeting so that the focus stays on major issues such as the budget and transit.

The Deputy City Clerk and the City Solicitor are preparing a report to help us in that debate. As well I have commissioned a Task Force on Governance to report back in mid-September. The staff report along with the taskforce report will provide a framework for the debate.

I believe this will be one of the most important debates we have during this term of Council. The objective is to set the stage for a better and faster decision making process. With the help of a first class independent taskforce coupled with pragmatic staff recommendations will give Council all the tools it needs to improve our municipal Government. The choice of course will be up to this Council if it wants to take advantage of the opportunities that will be before us.

Trash—a new age is coming!

The era of this city throwing our trash in to a hole and hoping the problem will go away is changing. Between capturing emissions from our existing dumps, diverting organics back to soil and brand new technology that will convert waste to energy, Ottawa is on track to becoming a world leader on managing our trash.

We have already made some good progress on waste management over the last 18 months. Last Fall Council approved the Source Separated Organics program that has the potential to exceed Council’s target of 60% diversion from landfills.

The City is also monitoring the pilot project of Plasco Energy Group.

Over the last few months the plasma gasification facility at the City’s Trail Road Landfill has been accepting some municipal household waste. If this process proves successful the Plasco facility will produce enough electricity per ton of waste to power the average household for weeks at a time.

We are also pleased to see our other landfill partners looking at introducing new technologies to capture gases like methane to produce electricity from existing landfills which will also reduce the environmental impact on the residents living close to the operating landfills.

This new technology will require us to be patient as the test bed at Trail road continues to evolve from concept to operational reality.

Looking forward to working with Council.

These are exciting times with an ambitious agenda that will include issues we can’t predict and several new and exciting projects that individual Councillors are working on.

I encourage all members of Council to bring forward ideas particularly in these four areas and I look forward to working with all of them and focus in setting the stage over the summer for a productive Fall.