Transparent & Open Government
The transition from private business to the very public world of politics has been both interesting and more challenging than I had envisaged. Based on my first seven months in office, the most challenging issue facing our City is financial sustainability.
As I have reflected on this issue, I have concluded that two things may have contributed to us moving from a municipality whose Reserves totaled $100 million dollars just a few short years ago, to one where we are now the second highest indebted City ($94 million dollars), in B.C., after Vancouver. Without a doubt, Capital spending has brought us to a place where other services vital to the health and well being of a community will have to be deferred for many years.
Groupthink may be a second contributing factor, which is a subject that I wrote about during the November 2011 election campaign. That article entitled; The Importance of Independent-Thinking and Principle-Based Decision Making, can be found under archives section (November 2011), at www.henrybraun.ca .
The City of Abbotsford’s vision statement deals with livability, sustainability and prosperity. While I agree that Abbotsford is one of the most livable community’s in B.C. (that is why I have chosen to live here for 59 years), our present course is simply unsustainable and we are certainly not the most prosperous city, although we spend money as if we are!
Regardless of the reasons that brought us to our present situation, one thing is crystal clear; the people of Abbotsford are demanding greater transparency and accountability, coupled with a more meaningful public participation in the shaping of policy that affect their lives. The public is looking for more scrutiny; however, there can be no public scrutiny without access to information, which brings us back to transparency and openness.
Citizens expect public servants to look after the public’s interest with fairness and that we manage limited financial resources and public assets with integrity on a daily basis. If we want to begin to regain the public’s trust, we must demonstrate fair , open and transparent decision making, resulting in predictable, as opposed to ad-hoc decisions, where some may argue that City Hall is picking ‘winners’ and ‘losers’. Decision making done successfully, creates a level playing field for everyone.
Integrity, transparency and accountability of the public service, both elected and unelected are prerequisite to and underpin public trust, as the keystone to good governance. When there is honest and open dialogue, the public’s trust will return!
July 19, 2012
Spending Other People’s Money Is Always Easier Than Spending Our Own.
Milton Friedman, one of America’s most respected economist, statistician and the recipient of the Nobel Memorial Prize in Economic Sciences, wisely observed that we spend our own money on ourselves very carefully. We spend other people’s money less carefully.
As a young teen-ager, I worked on a poultry farm, catching chickens from midnight until dawn. The money I earned went into a savings account to buy a car when I turned 16. In addition to my earnings, my father would give me money for my birthday and other special occasions. I still remember that this ‘free’ money disappeared relatively quickly and without much thought.
The obvious truth and lesson that I learned early in life was that it is much easier to spend someone else’s money than my own. Elected officials and civil servants at every level of government need to rethink how we spend taxpayer’s money. Expenditures should be evaluated as though it was our own money that we are spending.
The City of Abbotsford has increased expenditures at a far greater rate than the average taxpayer’s income. Since September of 2008, many of our citizens have experienced wage decreases, or worse still, have lost their jobs. Abbotsford’s unemployment rate has increased for three consecutive years and is now one of the highest in the country. We have reached a point where the general public can no longer bear the burden of taxation and all the other fees they encounter at every turn.
The obvious question is this; how did we get here? Let’s begin by looking at the division of tax revenue. Federal and Provincial governments receive 92 cents of every tax dollar, while local government receives the remaining 8 cents. In recent years, Abbotsford has taken on many costs that have historically been the responsibility of our two senior levels of governments, i.e., 3 freeway interchanges and social housing to name two, but there are others. Many local governments, including Abbotsford have bought into the concept of paying 33% of infrastructure costs that properly belong to the two senior levels of government who collect 92% of all tax revenue.
Abbotsford’s largest single line item expenditure is made up of salaries, wages and benefits. While we have many great employees throughout the organization, we cannot continue with the kind of increases we have seen in recent years…it is simply unsustainable. Tackling this issue will be difficult, but one that is necessary if we want to improve the sustainability and quality of life in Abbotsford.
Historically, public sector employees were generally paid less than an equivalent private sector position. The primary reason for this was because a public servant position usually has less uncertainty, while private sector employment is subject to the free market forces and hence employment is less certain. Unfortunately, poor public sector employees are grossly overpaid while good public sector employees are grossly underpaid. Salary schedules tend to be uniform and determined far more by seniority than any other factor.
Another factor is the debt levels that Government’s have taken on and Abbotsford is no exception. In B.C., Abbotsford’s debt obligations are second only to Vancouver. Contrast this with Surrey – their debt is one-tenth that of Abbotsford, while Chilliwack has no debt. How is it that Chilliwack has an arena, a cultural centre and pools and yet has no debt? One thing is clear; the average taxpayer in Abbotsford is upset and is demanding that elected leaders figure out a way to relieve/reduce the tax burden.
The subsidies that arose as a result of Plan A, also present a formidable property tax challenge. Instead of breaking even, or having a small surplus (which is what we were promised), we have poured millions of tax dollars into these projects every year, the most notable being the Entertainment and Sports Complex (ESC). We have to find a way to reign in these subsidies; otherwise, we will fall further behind in other areas. The good news is that this message is beginning to gain some traction at City Hall.
In my view, the City of Abbotsford does not have a revenue problem, the real problem lies on the spending side.
Elected officials and senior managers need to keep all of this in mind when it comes to developing our 2013 Budget.