Taxes

Update- October, 2019

Accountability is important to me. For that reason, I’ve kept pages from my 2017 Election website up. Below is one position paper I posted during the campaign. In this section, I’m providing an update of what has happened over the past two years.

The City budget has been a major focus of Council. We’ve put a lot of effort into ensuring money is spent more efficiently, and better targeted towards community priorities.

You can click here to read highlights about the 2019 budget.

Council went into the 2019 budget deliberations wanting to see a tax decrease. This was challenging: there were significant obstacles just to keep it at a 0% increase (click here for examples). The challenge became even bigger since Council decided to increase spending in a few key areas, including road rehabilitation and RCMP positions.

Council tasked senior management with spending money more effectively (read more about that here). It also explored a variety of non-tax revenue sources (more info here). Through this work, Council set a budget which gave residential properties a 4.1% tax decrease while also increasing funding in a few key areas, including road rehabilitation and RCMP members.

I’m happy with the 2019 budget. But I’m even more happy with some of the processes that went into it. Below, I outline four strategies to find tax savings. I’m happy to report that all of them are currently in use by the City.

• Look for efficiency. The City has been employing Lean training and methodologies to find efficiencies within its business processes. Our staff and managers are working hard to increase value and decrease waste in all that they do. You can learn more about this initiative here.

• Zero Based Budgeting. The City isn’t doing Zero Based Budgeting. However, it has adopted a related methodology: Priority Based Budgeting. Every single program in the City has been given a cost, and has been ranked based on how well it aligns with community priorities. This process is allowing for a much more disciplined approach to program funding. You can learn more about it here.

• Examine user fees and other revenues. Council has spent a lot of time discussing when it makes sense for tax payers to pay for a service, and when other revenue should be collected. This has led to adjustments to some revenue sources. You can read more about those here.

• Better involve citizens in decisions. I’ve put a lot of effort into writing about all Council decisions, including budgetary ones. This has been to help residents become more informed so that they can be better involved. However, the City has also increased its engagement efforts. It’s put effort into creating a better online engagement portal. And this year, there was an in-person evening at the Eastlink Centre where residents could come to talk about the budget with Councillors and with City staff.

There is one area of the budget I am struggling with. In the below paper, I said “we don’t need to pickup spending from other levels of government.” This was an easy position to have before I was actually on Council. But now that I get direct input into City decisions, its one that is sometimes difficult to maintain.

Our community is facing rising challenges relating to addictions and mental health as well as housing affordability for some families. These challenges largely fall into provincial and federal responsibilities. But there are many in our community that want to see the municipality spend more to address them. And it is hard to disagree with the. I’m really struggling to decide what it is appropriate for the City to spend to address mental health, addictions, and housing. I welcome any input you might have.

Following is what I posted during the 2017 campaign:

I hear from a lot of people that they are concerned about taxes. I am too; I have a young family and I own a house, so taxes certainly affect me. I’ve also spent my entire career learning the responsibility that comes with being trusted to administer others’ resources. If elected, making sure that taxes are reasonable and return good value will be one of my top priorities.

Throughout this page I will explain the thought processes I would use when considering spending decisions. I hope to be one of the people you decide to trust with your tax dollars.

Holding the Line on Taxes

There is a real opportunity for our next Council to do something rare: lower taxes. Some changes are coming to how we work with other municipalities (details at www.voteBressey.ca/icfs). If these changes go well, the City of Grande Prairie will realize some major savings. If we do, those savings clearly need to go to tax cuts rather than spending increases.

Whether these changes pan out or not, it has been made quite clear to me by many citizens that controlling taxes is a priority to them. As a homeowner and father of a young family who pays taxes, I agree with this priority. I also get concerned when I see development taking place just outside of City limits, and taxes are a factor in this happening.

We are in a time where many families are struggling. Now is not an appropriate time for us to be raising tax burdens on our citizens. If elected in our current economy, I will work hard to help Council find a budget that lowers or holds the line on taxes. If my colleagues on Council will not do this, I will vigorously oppose any budget decisions that increase taxes beyond the rate of inflation. As we see savings from regional collaboration, increased efficiency, and annexation areas I will argue for them to go to tax cuts rather than increased spending.

My Experience and Promises

Most of my career has been spent in the non-profit sector. As an Area Director of a charity, I administer a budget which I also fundraise. My organisation does not receive much in the way of government grants. Most of our funding comes from myself and a team of volunteers approaching private donors. I regularly sit down with these donors to give an accounting of what we have accomplished with their money. Rightly so, they often ask me rigorous questions about our spending. I have been well trained to understand the great responsibility that comes with using other’s hard-earned resources.

If elected, I will approach budget decisions with the same sense of responsibility. I will work hard to make sure that taxpayers and ratepayers are getting a good return of value. I will work hard to learn about and suggest more efficient solutions to Council. I will also work hard to help you know what budget questions we are considering and to give you input.

You might notice that I didn’t make any specific spending commitments. That is because budgets are complex. There are a lot of practical factors that go into how much programs and projects cost. There are also a lot of political factors that go into which programs and projects get supported by Council. Lots of this information is changing, and lots of it isn’t currently available to me. Budgets are also best considered holistically--individual lines should not be considered in isolation (for example, a lot of projects are great when part of a 0% increase budget but should not be considered when part of a 5% increase budget).

For these reasons, I am not going to talk about individual parts of the City budget here. What I will do is walk you through how I will approach spending decisions. This will give you a clear idea of what to expect from me come budget time if I am on Council.

Assumptions for Budgeting

If elected, here are some assumptions I plan to approach spending decisions with. If there are specific cases where these assumptions should be set aside, I will need very strong evidence to persuade me to do so.

• Regional revenue needs to go to tax savings, not increased spending. There is a possibility that we will see increased revenue and/or program cost savings due to regional partnerships (see www.voteBressey.ca/icfs). If this happens, we need to use it to cut the burden on tax payers rather than increasing spending.

• Natural revenue increases are needed, tax hikes are not. I suspect that Grande Prairie is going to see growth over the next Council term. As we have more people and businesses, we will need to spend more money to service them. This kind of spending increase is important. But future spending increases need to come from an expanded tax base, not from adding more taxes to existing payers.

• Departments don’t typically need budget increases year-over-year. One reason some governments get into trouble: they default to giving across-the-board increases to departments year after year. This is dangerous. Come budget times, the assumption needs to be that no departments need an increased budget. Any increases need to be justified using clear reasoning (expanded service delivery, service to a larger population, replacement of aging equipment, etc…). And when Council increases the budget in one area, by default it should assume it will need to decrease the budget in another area.

• We don’t need to pick up spending from other levels of government. There are many areas where our municipality shares costs with the Federal and Provincial governments. When funding from these other levels decreases, the temptation for municipal government is to compensate by raising its spending. There are also responsibilities of provincial and federal governments that seem underfunded. When this happens, it is tempting to compensate with municipal programs, services, or funding. We need to be very careful when doing this. In general, we should not take on the responsibility of compensating for the shortcomings of other levels of government.

• The time isn’t right for Big Shiny Projects. These are community enhancement projects which are exciting and cost millions or tens of millions. They absolutely play a role in any community, and we will likely need to build some in the future. However, right now I think Grande Prairie needs to focus on more basic projects. Unless they have seen large population growth, tax decreases, and strong commitments from other municipalities part way into their term, the time isn’t right for our next Council to be starting a Big Shiny Project. Read more at www.voteBressey.ca/bsps.

Some Ideas for Savings

Saving money should always be a priority when we are talking about tax dollars. Following are some specific savings methodologies Council should consider. There might be better savings methods for us to use. It would also likely be unwise to use these simultaneously. But each of these ideas should get consideration. Council needs to make a concrete plan to find potential savings within the City.

• Look for efficiency. Any $250,000,000 corporation has room for efficiency, and we should always strive to use tax dollars wisely. However, sometimes it makes sense to formally look for efficiency through service reviews and department audits. Of course, it is a waste of resources to collect information without using it. Council needs to be ready to act on the potential efficiencies found.

• Zero Based Budgeting. This is a method of setting budgets which starts at $0 budgeted- it requires every expense to be justified. This is different than other budgeting methods which start with the previous year’s spending and modify it. Zero Based Budgeting takes a lot of work, so it is an expensive way to do budgets. However, it can reveal savings opportunities. I do not think it should be used on an annual basis. However, we should consider putting in the time and expense of Zero Based Budgeting occasionally. We could do it across the corporation in a single year, or do portions of the corporation every year, getting to every department in the course of a 4 year budget cycle.

• Examine user fees and other revenue. My understanding is that, when compared to other municipalities, Grande Prairie has low user fees for many services. This has been an intentional decision to stimulate growth (for fees like development applications) and to ensure quality of life for all income levels (for fees like recreation programs). The cost of low fees is that property taxes are higher to subsidize them. I especially get concerned when the City is subsidizing the activities of residents in other municipalities. I am not saying I want to raise fees across the entire corporation. But it might be worth re-evaluating all of them.

• Better involve citizens in decisions. We must do a better job of letting residents know where their money is going. The City publishes its budget, but this is vague and hard to understand. The County of Grande Prairie provides a great example of how to communicate better: click here. A transparent budget is one the public can provide useful feedback on. This feedback is essential for Council to decide on spending priorities and savings opportunities.

Questions to Consider

It is important that Councilors do not just go on their intuition of what is best when making spending decisions. They need to have some sort of methodology for evaluation of each line in the budget. Following are questions I would ask myself when making spending decisions.

For necessary capital projects (roads, buildings, essential equipment, etc…):

• Is due diligence complete? Is the project properly costed, do we have engineering studies, etc…?

• Will this look like a good decision 10, 15, 30 years from now? Is it taking future growth into account? How will the debt effect future taxpayers?

• Have we consulted with other regional municipalities?

• Have we accessed all potential provincial and federal spending?

• Does this address a major safety concern, significantly increase citizen quality of life, or attract industrial development?

• How will the construction phase effect businesses and residents? How are we addressing the hardships construction creates?

For “need to have” programs (maintenance, basic social services, emergency services, etc…):

• Is it actually needed?

• Are other levels of government fulfilling their obligations to the project?

• Can we find savings or better program delivery through intermunicipal collaboration?

• Are we doing this efficiently? Are there cost savings possible?

• Are there partnerships with other governments, agencies, businesses, or non-profits we can leverage to make this better or cheaper?

For “nice to have” programs (parks, recreation facilities, non-profit funding, etc…):

• Where is the budget overall? Are we currently looking at a tax increase or decrease?

• Will this significantly increase the citizen’s economic or social life?

• Will this be accessible to a wide cross-section of citizens?

• Is this part of intermunicipal collaboration- are other municipalities helping us pay for it?

• Is this duplicating a service already available in our community?

• Is there a demand for the program?

• Does the program have community support from volunteers and donors?

• Is there a sustainable business plan in place?

I’d love to hear your thoughts. What is a realistic percentage for tax decreases or increases? What assumptions should Council have going into budgets? What are some ideas that could save us money? What other questions does a Councilor need to consider when voting on spending?

Let me know what you think. Find me on facebook. Send me an email. Or stop me on the street when you see me around.

-Dylan

I'd love to hear your thoughts. You can contact me by clicking here. I'd also encourage you to share your ideas with others. You can do that by joining a GP Round Table discussion online or in person. Details are here.

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