In my books, the biggest city issue is....

City Council gave unanimous approval to the first readings of the 2017 budget bylaws this past Monday. The Tri-City News' coverage (most of which is not yet online) focused on our policies and usage of reserve funds. My focus, however, was on a more pressing issue. Here is the text of the speech I delivered.

Graphic: City of Coquitlam

The first readings of the budget bylaws are traditionally accompanied by statements from the mayor and councillors about the general state of affairs in the city and the specific level of such things as tax rates and municipal spending. The mayor has very adroitly covered all of this ground and more in his address.

And I want to declare now that I agree with him that the budget before us tonight is well worth supporting. I am especially pleased that, for the eighth consecutive year, the rate of increase has declined; this year it’s 2.17 per cent, the lowest in 25 years.

While there are parts of it with which I don’t agree, on the whole it strikes a commendable balance between, on one hand, provision of needed services and amenities, and, on the other, the sort of fiscal responsibility that our residents expect of council.

I am proud to be part of a council that takes its duty in this latter area seriously. Ours is a council that, unlike so many other political bodies, works hard to avoid political gamesmanship, posturing and pandering; instead, it really does focus on doing the best for the whole community – making decisions based on principle and strong policy, rather than on prejudice and political pressure. And that’s a very good thing.

I must point out, however, that, while having sound budget policies and practices is absolutely central to the work that we do here – and, moreover, that it is, in fact, the foundation upon which is built the entire edifice of services that the city provides – it actually isn’t the single, most pressing issue that concerns me…. and confronts us all.

The issue isn’t the tax rate; it isn’t the level of government services; it isn’t the numbers of workers on city payroll; it isn’t parks, arenas, tennis courts, artificial-turf fields or a museum; it isn’t laying more pipe and filling more potholes; it isn’t water quality, air pollution, or safe streets, either.

Those are all areas of importance. But, surely, the most pressing issue is one that affects us, literally, where we live. It’s housing affordability.

The measures that council has taken over the past few years --- and will, one hopes, continue to take in the years to come – will be a critical part of this council’s legacy.

This council has long stated that the primary responsibility for providing “deep affordability” rests with the two senior levels of government. Nevertheless, through adroit use of the city’s re-energized Housing Affordability Fund, the city is set to do its part in this crucial area. Especially noteworthy is our support of the Talitha Koum housing project.

To be clear, though, housing affordability has always been an issue for lower-income individuals and families. On the other hand, the now fully-emerged crisis that is upon us now is a more contemporary phenomenon – the large gap between what middle-income earners can afford and what the market demands they pay.

Consumers have had to adjust their expectations. Many looking for a single-family home have had to set their sights on a townhouses or condo. Those who might, in a more affordable market, be looking to buy a condo now might, instead, look to rent. And so it goes.

The single most important thing the city can do to assist those in the market is to facilitate the construction of new housing, whether it’s for sale or for rent.

That has certainly been a main focus of mine over the five years I have spent on council, and I am pleased to say that, in most cases, it is a focus that is shared by the majority of council. Whether it’s approving townhouse developments on Burke Mountain, Condo Towers in the city Centre, rental projects in Burquitlam, or subdivision of lands in Maillardville, this is a good thing.

Yes, amelioration of adverse community impacts must always remain a concern, but I believe our paramount responsibility in the face of an unprecedented crisis is – and must continue to be -- to keep a clear focus on making good land-use decisions that lead to the creation of more places that people, young or old, poor or rich, single or married, can call home.

Budget breathing room for taxpayers

By a vote of 8-1 (with the lone dissenter being the usual opponent), Council gave the first three readings to a series of budget bylaws last night. Here are the notes for the speech I delivered in support of the 2014 budget.

I will oppose this budget. Actually, let me change the tensing of that sentence. I would oppose this budget:

• If it didn’t continue lowering the average tax-rate increase.
• If it didn’t continue lowering the residential tax-rate increase.
• If it didn’t continue the one-point tax shift that makes commercial tax-rate increases even lower.
• If it didn’t provide for major new public-safety initiatives.
• If it didn’t respond to taxpayers’ requests for transportation improvements
• And if it didn’t carry with it a major commitment to continually examine city services, to see what should be added and – significantly – what should be stopped.

And so, what does Budget 2014 deliver?

Spirit Square, Coquitlam (Photo by Terry O'Neill)

First, and importantly, it calls for an average tax rate increase of 2.42% -- almost a full half-a-point lower than last year’s increase, which was lower than the year before’s, and which in turn was lower than the year before that. Indeed, since the high-water mark of an average 7.11% increase in 2009, the average tax-rate increase has been on a straight line down. And that’s good.

Hand-in-hand with that, both the residential rate and the commercial rate increases are lower as well, compared to last year. And, because of our continuing commitment to a one-point tax shift, the commercial rate increase will be only 1.8%. This is good news too.

And what about those public-safety initiatives? Four new firefighters and two new RCMP officers represent a pretty major commitment, and so I think we’ve met that standard.

As for transportation improvements, which our annual Ipsos Reid survey continues to ranks very high our citizens’ wish list, this budget commits significant funds to road rehabilitation and road enhancement in every part of Coquitlam.

And what about future decisions? I was very pleased when I heard, as part of our budget deliberations, that our management team was launching a new initiative to identify services and programs that are no longer needed, with the aim of eliminating them….. thus allowing the property-tax-payer to keep a few more dollars in his or her pocketbook or for the city to add new services. The initiative is called the Stop-Doing List, and if there’s one initiative that should never be put on that list, it’s the Stop-Doing List itself!

And so: I had six criteria for the budget, and all six were met.

This doesn’t mean the budget is perfect, from my point of view. The record of our lengthy deliberations shows that I opposed some spending measures that the majority approved. But while the budget is not perfect, it is certainly good enough. And it’s even better when you factor in the major decrease in utilities fees which the mayor mentioned. In fact, it means the average homeowner will pay only $15 more on his or her combined property-tax/utilities bill this coming year. 

But on the strength of its diminishing tax-rate increase alone, a rate which gives us the second-lowest tax increase in more than two decades (the lowest, in 2005, being 2.27%) it is definitely good enough. On the single issue of tax increases -- the one everyone watches, the one that makes the headlines --  it’s certainly better than the budget of 1994 (4.8% average increase), '95 (4.8%), '96 (3.45%), '97 (5.36%), '98 (4.5%), '99 (4.5%), 2000 (5.78%), 2001 (4.9%), 2002 (2.77%), 2003 (4.1%) and, well, you get the picture.

If there is any hesitation among my colleagues over whether to support this budget, let me suggest: Don’t let the perfect be the enemy of the good. --meaning that insisting on perfection often results in no improvement at all. If a majority of us voted against this budget, not only would all the hard work we’ve done be put in jeopardy, but the landmark low levels of tax-rate-rise that we’ve achieved might also be threatened.

There’s also something called “the Pareto Principle” or 80–20 rule, which observes that it commonly takes 20% of your effort to complete 80% of a task, while to complete the last 20% of a task—that part of it which it takes to achieve a perfect outcome-- takes 80% of the effort. Considering this, along with the fact that achieving absolute perfection is impossible, leads us to the law of diminishing returns, in which it becomes clear that the closer one gets to achieving perfection, the increasingly inefficient your work becomes.

And so, what does it mean for the budget tonight? As I said before, it’s a good one, but not perfect. But, remember, not only is achieving “perfection” is impossible, but the longer we work trying to achieve perfect, the harder and more inefficient that work becomes, and the greater the chance that we’ll become stalled and achieve nothing at all.

Something is certainly better than nothing.

And this something – this budget which answers the needs of so many of our citizens, from the hopeful new homeowners on Burke Mountain to the actively involved seniors at Dogwood Pavilion, from the commuter looking for better roads to the merchant looking for a lighter tax load – is certainly something worth supporting.

   

Yes, I support the new Coquitlam budget

On Monday night, seven of my council colleagues and I voted in favour of a new budget for the City of Coquitlam. Only one councilor, the perpetually opposed Lou Sekora, voted against it. The budget wasn’t perfect but, all in all, I am satisfied that it is responsible in two important ways: it relieves some of the ever-upward pressure on taxpayers, and it provides for all the important services that our residents need, including new firefighters and police officers.
During the run-up to the election last fall, my main campaign pledge was to cut back on the high rate of property-tax increases. A look at some of the figures over the past five years shows the problem: In 2007, the average tax rate increase was 5.42%; 2008, 5.175; 2009, 7.11%, 2010, 4.96%, 2011, 3.18%.
On Monday, we passed a budget calling for an average tax rate increase of just 3.16%. I would have liked to have seen the figure under 3% and, indeed, worked hard to achieve that figure during our closed-door budget deliberations, but I’m just one voice on council and I couldn’t always persuade the majority of my colleagues to see things my way.
You might also remember that, in late September of last year, I signed the Canadian Federation of Independent Business’s Taxpayer Pledge. Here’s how the three-point pledge reads, with my analysis following each section.
1) Property Tax Fairness – by committing to reduce the gap between what commercial property and residential property owners pay, you would be committing to help create conditions that enable small businesses in your community to thrive.
PROMISE KEPT: While council has been working slowly to lessen the gap, by implementing a 0.75% tax shift annually for the past several years, the pressure from the CFIB and pledgers such as me clearly got through, and council increased the shift this year to 1.0% percent. The result will be that, while the average tax rate increase will be 3.16%, it will be 2.56% for commercial properties, and 3.56% for residential properties. Worth noting is that the business-tax rate reduction will bring the rate to 4.66 times that of the residential rate, as opposed to 4.85 times larger last year. It’s still one of the highest rates in the region, but the actual tax bite is in the middle of the pack because of assessment differentials.
2) Reasonable Spending – by committing to keep operating spending increases reasonable, i.e., at or below the level of population growth and inflation or the rate of growth in disposable income, you are giving yourself the fiscal room to reduce taxes and fees, not increase them.
PROMISE KEPT. Here’s the calculation. The Consumer Price Index for last year registered a 1.9% increase, while Coquitlam’s population grew by 2.1%. Add those two figures together, and you get 4%, which would be the maximum allowed increase in operational spending. So, what is Coquitlam’s operating spending increase for 2012? There are two ways of looking at it. First, if you add up all operational spending, even including spending for which the city is receiving grants or transfers from other levels of government, our spending will increase 3.92%. Second, if you look at only operational spending that is directly supported by the taxes we raise ourselves, our increase will be 2.92%. Either way, we’ve bettered the target.
3) Transparency, Openness and Accountability – by supporting in principle, the creation of a Municipal Auditor General for BC, you are building on and enhancing your already existing systems of financial reporting, and standing to benefit from the best practices identified through performance audits.
PROMISE KEPT. I supported the Local Government Auditor General from the outset, and am pleased that the provincial government has now enacted legislation to bring this position to life.
I am pleased that we have a budget that allowed me to meet the CFIB pledge. But there’s work to be done. For starters, I’d like to see the average annual residential property-tax increase to be more in line with the average or median rise in household income. With this in mind, it appears the 2012 tax increase is about one percentage point too high.
And there’s one more word of caution here, and that’s the unknown impact of the upcoming contract talks with the city’s 1,400-plus CUPE workers. I ended my budget speech last night with a request to CUPE to restrain their contract demands. They’re coming out of a contract that saw CUPE members enjoying very large annual increases (in the 4% range) for several years. CUPE salaries are now considerably higher than those paid to comparable workers in the private sector. Personally, I’d favour a “net zero” contract over three years. This would be prudent and positive.

Surviving our worsening economy

Let’s get right down to business and talk about the most important issue facing Coquitlam: What to do about the unsustainably high rate of city spending, and the high rate of property-tax growth that it causes.

Talk to the average homeowner or business owner, and you quickly learn that this is Issue Number One. And it grows even more important by the day, as the global economy continues to falter.

You might have heard that Finance Minister Jim Flaherty released his fall economic update on Nov. 8. He made it very clear: Our country’s economy is still weak. He warned that the European sovereign-debt-and-banking crisis poses a significant risk to the global economy and will lead to slower growth here. His government will have to adjust. (Euro-Crisis cartoon from www.mw.nl.)

What about here in Coquitlam? Over the past several years, the city has boosted property-tax rates to fund spending that is higher than what we can afford. One result is that public-sector wages soared, even as private-sector ones stagnated.

Given this record, can we trust council to do the right thing, and reduce the rate of spending and tax increases, in response to the ongoing economic slowdown?

Can we at least trust the incumbents, if re-elected, to make fair and balanced decisions at the bargaining table to control our rapidly growing expenses?

I am committed to responsible budgeting. That’s why I signed the CFIB’s Taxpayer Pledge, to support a municipal Auditor General, to cap spending increases, and to lower the job-killing gap between business and homeowner tax rates.

None of this will be easy. We’ll engage the public to help set priorities and make important decisions about protecting valuable services.

There’s a big job ahead. But I’m ready to take it on. My name’s Terry O’Neill and I’d be honoured to receive your vote on November 19th.

This is the text of the opening speech I delivered at the Nov. 8 all-candidates meeting.