Calgary city council is currently debating the 2012-2014 budget, and all the news is about whether or not they can maintain a property tax hike of 5%, or will it have to go higher. None of the city councilors seem to think that increasing spending at a rate well above inflation + population growth is a problem. Have they not seen what has happened in Greece?
I thought I would have a look at the city’s numbers. Unfortunately, the documentation made available by the city doesn’t give a clear picture of where all the money goes and why it goes there. I mostly understand the money spent on Transit, Police, Fire and Snow Clearing (as mediocre as that is in Calgary), although more transparency on how much is spent on actual “delivery” versus “administration” would be nice. While they expose the “corporate administration”, there is little breakdown of how much “management” exists inside each department.
But there are whole other departments that have limited transparency, and the budget documents clearly assume all existing spending is worthwhile and that no “pseudowork” is happening. We all know that isn’t true.
The city budget documents should:
- break down how much money is spent in Delivery, Adminstration, Office/Field, etc for each program inside each department.
- tell us how many full time and part time staff are employed in each area with an average employment cost (salary plus benefits, burdens and payroll taxes).
- Break down each “program” inside a department, such as all the social services, recreation programs, etc. so we can have more transparency on exactly what we are spending the money on.
- Provide objective measurement metrics one whether programs are successful or not in meeting objectives. And these need to be hard objectives – with numbers to measure performance, not fluffy stuff.
- Provide clear data showing how much of the city’s budget comes from property taxes, fees, business lines (Enmax) and transfers from the province. I couldn’t find this…
If Mayor Nenshi (@nenshi) and the rest of city council want some ideas on where to cut, here are some:
- imagineCalgary. Cancel all spending associated with this. Any plan that looks 100 years into the future can be nothing more than guesswork. If NYC had such a plan in 1900 they would have wasted vast sums planning what to do with all the horse shit that was going to accumulate on the streets as the city grew. Then Henry Ford and others changed the game. Further, the imagineCalgary plan has “114 Targets”, which is far to many for any reasonable action to be focused. Many of these goals are socialist fluff, such as “Food sources derive from sustainable practices that provide us with a high quality, healthy, affordable and secure supply of food” and “Self-esteem: We are confident and satisfied. We know we are valued and respected. We collectively understand and actupon our inner potential so we can achieve sustainable development.” How are these things even the City’s responsibility??? Further, many of the targets require ever greater government intervention in the economy through strict zoning bylaws (Transportation T3 By 2016, we increase the number of jobs within walking distance (600 metres) of LRT stations and major transit nodes by 35 per cent.)
- Capital Financing Costs: Why does the city have financing costs? We should not be spending similar amounts on debt payments as we do on the police. Either cut spending or increase taxes and wait to finance capital expenditures to avoid the interest costs! And my preference is to cut spending because increasing taxes just adds to the idea that the city has money to spend…
- Community Services: We are spending a lot of tax money on social services – I don’t disagree these are needed, but we should be doing a comparative evaluation of whether our overhead costs are competitive with existing charitable organization (i.e. United Way); if not, just give the money to the charities (no-strings) and stop trying to provide the services.
- Transit: The current cost of Calgary Transit is more than double it’s revenue. That means cost recovery ticket prices would be about $6.00. That’s a little high, I will agree, but many transit user buy passes at discounted rates (the attraction of the pass). Perhaps we need to ask users to pony up a little more.
- Customer Service – there are 152 FTE people employed in Customer Service, but more than half the money is spent in public/employee engagement, while the actual provision of customer service is the poor sibling. Is the $12 MM we spend on “engagement” worth it? I don’t think so.
- IT: The city spends $90 MM on IT every year. This seems high, compared to the costs for corporations that are much larger, have much larger geographic reach and more complex needs. I suspect there is significant opportunity for efficiency gains here as well. Further, evaluation of whether activities should be done ‘in-house’ or outsourced needs to be carefully evaluated. Outsourcing can be cost effective, but is also a dangerous area of “high-priced, underperforming consultants”.
- General staff evaluation: Each and every city employee should be assessed against how much value they provide to taxpayers versus their cost. If that role could be filled by someone who is paid less, then it should be. If that means contracting out that role, so be it. If that means laying people people off and replacing them, so be it. If this means renegotiating union contracts, so be it.