2003 Budget Comments
January 2003
Thank you for the opportunity to provide comments on the upcoming budget. Our comments fall in line with views expressed in the 2002 Comprehensive Service Level Review provided this past April.
The proposed tax hike when viewed in conjunction with anticipated debt load for the next few years and deferred capital projects is problematic given the fairly strong economy in Canada (relative to the U.S.) and in particular in South Western Ontario. It means our hands are tied somewhat to what we can take on in the future as well as how to finance what we’ve already committed the citizens of London to over the past while.
Further, it is far too early to know whether the decisions made by this Council to substantially invest in the core will last beyond the current honeymoon phase. What we do know it that it has not come without a price – which we see now as quality of life issues (recreational facilities deferred, housing deferrals) and reduced levels of service.
As always, we encourage Council to find the appropriate balance, to carefully prioritize and to hold the course on strategic objectives.
Primary issues for the League are as follows:
SuperBuild projects listed were drawn up by the previous administration and have not yet been sanctioned by council. The list may not necessarily reflect this Council’s priorities and so we request the list be:
- reviewed based on the City’s strategic priorities
- only request what we absolutely deem to be a priority
- when asked for input into projects, the League recommended Affordable Housing and Public Transit receive consideration.
We are at almost 70% of the allowable debt level already. A fiscally responsible and prudent position would dictate some dollars may need to be left on the table as the City needs to consider how much more debt it is willing to take on. We should use the adage projects should be a “need to have vs. a nice to have”. This brings us back to prioritizing. For example, if the Hale Street overpass is deemed to be “a need” (a stretch, we’d argue), note CN needs it more than we do and so they should financially support a larger portion.
We are also concerned with the leap frogging of some capital projects such as the Hale Street overpass and the Bradley extension over road projects identified in the 1994 Transportation Plan.
· With respect to the Police Budget, we recommend the City consider the possibility
of by-law enforcement officers powers being extended to include noise and other relevant Code 3 complaints. This could reduce the number of officers required, positively impact the bottom line, improve response time and quality of life in neighbourhoods. This concept was discussed at the Noise By-Law Task Force and would also fit in with issues likely to be dealt by the Student Housing Task Force. Could be a win-win solution both from a cost effective and operations viewpoint.
Perhaps there are other efficiencies to be realized in a similar vein to bring the proposed budget in line.
· Request the London Public Library Board come in at the requested budget level.
· Support the deferral of Industrial Land Development Strategy but also
recommend when it comes back into the budget as a line item, it be halved. The
League was in favour of the original strategy but not to the $60 million dollars proposed and passed.
· Recommend both Tourism London and the Communications Department budgets
be scaled back.
· Set a time frame for the $600,000 subsidy for the London Convention Centre
to end. The budget document indicates the CC is expected to sustain itself eventually. Ten years is long enough for it to achieve sustainability. If that is not the intent, then at least reduce the funding to the projected deficit level.
Having said that, it appears the operating deficit this year is $390,000 (excluding the LPL Café), up substantially from the previous year.
We note new line items regarding the LPL Café including capital repayment of $93,000 to LPL. It’s not clear what it is for and why it’s being paid to the LPL as the agreement was not part of any public council agenda.
General comments are that we also consider the CC to be part of the Tourism London profile. We’re simply pointing out while this is a separate board, its purpose ultimately supports tourism while its revenue now seems to be disbursed to other areas such as the library vs. its own operating deficit.
· Quite often the extras involved to support a strategy (downtown revitalization) add
up as well – examples being the cadillac parking lot recently constructed along Horton or the $50,000 for Christmas decorations requested by Covent Garden Market. Those types of initiatives can take on a life (and cost) of their own and we ask the City to ensure they do not.
· The League continues to support tax incentives that result in appropriate residential infill downtown. The revitalization of the core, if to be successful, requires residential development. While recognizing that the core today is too small to allow for gradual mini-districtization, we urge the City to continue with their efforts to strike a balance between business and residential. In particular bars adding open patios located within meters of existing residential use need to work with their neighbours to ensure quality of life issues are appropriately addressed.
· We continue to support: Investment in Affordable Housing
Investment in Public Transit
Investment in Community and Neighbourhood Facilities as outlined in the Master Plan
The Woodlot Acquisition Fund Budget Line Item
The Airport Road Widening
The reinstatement of a Commissioner of Finance
The hiring of a Transit Demand Manager
· We note the line item for new Affordable Housing stock ($2,000,000) was deferred as was $2,000,000 in repairs/maintenance to non-profit housing. We cannot support these deferrals.
· The arena and other big projects have been financed as 20 year debts with 10 year balloon payments, leaving approximately $45 million dollars to be refinanced at that time. We’d like clarification for this budget and going forward in future budget information of the "plug in number" for future debt issuance beyond the 5 year budget. Depending on the figure, we may be facing either a severe cut back in projects or a bigger shift than anticipated to pay as you go financing.
· With respect to city-owned properties such as London Hydro and golf courses, as in the past we continue to support holding them. The Golf Courses generate income. Hydro is still dealing with privatization structure issues and would not attract an appropriate price.
Give consideration to dollars generated by Hydro debt repayment ($2.1 million this year) being returned to Hydro ratepayers vs. London taxpayers. This is especially important for low income users for whom Hydro use and subsequent cost has a direct impact.
· Support that the revenue from the Western Fair slots to continue to be included with general revenue but we recommend a larger portion be set aside to directly fund the gambling addiction component resulting from this source of revenue.
· Continue to support the acquisition of flood plain i.e. to only purchase land in the flood fringe as the flood zone is not developable and need not be paid for.
· Control the growth of the City. We need to examine how the City grows and undertake to plan more responsibly. The sprawl of the City to date is not indicative of the SmartGrowth concept, does not allow us to maximize use of public transit, allow for improved air quality and necessitates heavy infrastructure maintenance costs for our taxpayers.
The OMB recognizes cities may develop financial policies restricting growth so as to control its costs. This is particularly relevant for London with its substantial debt load over the next 5 – 10 years.
It’s cheaper to phase in controlled development rather than to allow "all points" development. It’s time the City took control of its growth patterns in order to hold the line on debt and future taxpayer liability. This must be a primary strategic direction going forward as directed by Council and to be implemented by the City.