business

It is time that the Corporation of the City of Greater Sudbury was run like a business.

by
Robert Kirwan
Publisher
Valley East Today

City Council made a decision at the end of March 2006 that on the surface appeared to be a good public relations move, but it was not a decision you would have seen in the world of business..

Apparently, the City received $3.6 million more than expected from provincial grants.

Of that total, a sum of $600,000 was already used to shore up the snow removal budget, leaving $3 million to be allocated to various budget envelopes.

This meant that they had several options:

	They could use the money to pay for some of the projects that were put on the shelf during budget deliberations. As you may recall, some good projects were delayed because of the lack of funds;
	They could triple the money by allocating it to an infrastructure funding program in which all three levels of government contribute equally to finance improvements to roads and projects, such as water and sewer services. This means that if they put $3 million in that fund, the provincial and federal governments would also contribute $3 million each and we would generate a total of $6 million more to improve our roads and sewer services;
	They could use the money to reduce the tax increase that has already been announced by 2%.
	They could do a combination of the above.

With very little debate on the matter, Council opted for placing $1.5 million in the capital reserves envelope to fund future road work. This will thus be turned into $4.5 million once the funding is received from the other two levels of government.

The other $1.5 million will be used to reduce the tax increase by 1%, dropping it from 5.2% to 4.2%. This means that the average home owner will receive a savings of $18 to $27 for the year.

COUNCIL IS PLAYING POLITICS INSTEAD OF RUNNING A BUSINESS

The additional $3.6 million was an unexpected gain in provincial funding. It may not be there next year. Therefore, all Council has done is defer raising taxes until the spring of 2007, when a new Council will be in place. That new Council will then have to raise the taxes to recover the one-time reduction, and still likely be faced with additional increases to fund projects like road improvement - a road improvement budget that could have been increased by an additional $4.5 million if Council had put the entire $3 million into the infrastructure funding program.

This means that Council merely gave home owners the $18 to hold on to for a year. Next year it will want it back and then some.

Council could have, and should have used the money to earn an additional $3 million for road improvements. This is money that will eventually have to be paid by taxpayers anyway if we are going to see improvements in the condition of our roads. The road situation is the top priority among the vast majority of ratepayers, and yet the Council choose to turn away $3 million in money that was there for the taking.

THIS IS NOT THE WAY TO RUN A BUSINESS

Council is the Board of Directors of the Corporation of the City of Greater Sudbury.

If Council had invested the $1.5 million it used to reduce taxes (a temporary reduction for one year only since it will be taken back next spring), Council could have turned the money into an additional reserve of $4.5 million for road repairs.

This means that Council was faced with the opportunity to take the entire $3 million and turn it into $9 million for road repairs and do a lot of good for the community.

Instead, Council turned it into $4.5 million for road repairs and gave $1.5 million back to the taxpayers to send them the message that "Council is sympathetic to their desire to reduce taxes". The cost to our city of allowing Council to "feel good about themselves" and "pat themselves on the back" is $3 million. That is some pat on the back.

NOT A GOOD SIGN FOR WARD 6 - HANMER & VAL THERESE

Furthermore, the $4.5 million that is now in the new infrastructure funding program is coincidentally the amount of money Council will be looking for to finish off the funding for the Rock Tunnel Sewer Project. That decision on that will be forthcoming in May 2006. Now that there is an additional $4.5 million in the reserves, there may not be a need to force developers to pay for the shortfall. The money can be taken out of the reserves.

Decisions like this are an indication that the Corporation is not being run like a business.

And yet, it is a business.

Decisions must be based on what will be good for the long-term future of the City of Greater Sudbury. We cannot afford to throw away $3 million. I am not counting the $1.5 million that was given back to the taxpayers, however, rest assured that you will have to pay it back, so I wouldn't be in too much of a hurry to spend it.