16 Aug Let’s Talk Revenue Generation
There is regular call by some of my colleagues to “find significant savings” in our city budget. This sounds great and honestly most of us are constantly looking for ways to save money and decrease our budgets. It is something we all must do.
My issue is that not ONCE have I heard from my ‘savings finding’ colleagues that we look for new sources of revenue – not ONCE.
Not to get too deep into the weeds but there are a few facts that I think are important.
- The current funding model for municipalities was created in 1849 – a lot has changed since 1849.
- Municipalites oversee 60% of Canada’s public infrastructure but only recieve 8 to 10 cents for each dollar collected.
- The Provincial government with Bill 23 and 109 has limited the ability of our city to collect certain development charges – impacting finances and has put municipalities in a position where we may have to rebate fees back to developers
- As a city our over reliance on using our reserve funds to artificially keep tax increases low has depleted our reserves to an unhealthy level.
If as a city and a budget committee we are not looking for new sources of revenue – then our two options are: 1) Cut the budget or 2) Raise taxes.
If we go with option one – Cut the budget – we will have to reduce our services and service levels. We cannot simply say – do more with less. This won’t work. It never has.
If we go with option two – Raise taxes – then we have to acknowledge that it will be difficult for some residents and we have to have plans in place to support them.
I am certainly not saying efficiencies can’t be found – they absolutely can. But in many situations – to become more efficient we need to invest money in technologies and in staffing.
One of the best examples I have witnessed first hand is with our Snow Plowing crews. Currently our snow plow drivers pick up a paper map of the area they are snow plowing. Yes, you read that correctly a paper map. Once they have completed their area, they have to return to the depot to get a new map for plowing a new area. Our snow plows do not have the technology on board to access digital maps.
While we can tell you the current the location of our plows are – we are not able to see in real time what roads or areas have been plowed. The lack of technology creates a HUGE inefficency.
It is not that our staff haven’t asked for investments in new technology – they have – for years. Council chose to not make the investment.
Municipalities are limited in how we can generate new revenue. But there are opportunities to create new ways but councillors have to be willing to do them.
My ‘savings finding’ colleagues earlier this year chose to reduce a new source of revenue for the city that would have removed a significant portion of our Tourism budget.
In 2022, the city introduced – the Municipal Accomodation Tax – that would add 4% to the cost of hotel, Bed and Breakfast and AirBnB room rentals. The money generated from this new tax would be used to fund our tourism initiatives and helped to improve our parks, public spaces and tourism facilities.
This is a tax that would be paid by people visiting the City – NOT residents. By delaying the implementation of the tax and reducing the amount collected – these councillors are asking residents to continue to pay for our tourism initiatives. This makes no sense to me. I ask my ‘savings finding’ colleagues why they would rather have residents pay than those visiting our city. By delaying the start of the program for six months, reducing the amount collected to 2% and spreading the increases over the next 3 years – it means that residents will continue to fund our tourism initiatives for another 3 years.
We have heard from residents that the tax burden is too great.
We have heard from residents that they want us to improve efficencies.
We have hear from residents that they want us to provide better services.
These things cannot be achieved by simply cutting the budget.
Ask councillors what they are doing to support and find new revenue opportunities for the city.
Ask councillors what they are doing to learn about grant opportunities available from the Green Municipal Fund, the Federal and Provincal governments.
Ask councillors what they are doing to make sure we are less reliant on our reserve funds.
I urge everyone to join in the budget process. Our meeting dates can be found on the city website.
If we don’t start taking seriously the need to find new ways to generate revenue then we as a city and as councillors are asking future generations to pay for our choices.