While an incredible amount of attention is given to political leadership at senior levels of government, taxpayers should not overlook what is happening and what may be done in the area of local government. My experience began in Penticton, British Columbia, where in 2008, running as a city councillor for the first time, I was elected with the highest vote count for the city council. The victory celebration was short-lived, however, as Penticton’s finances, like those of many municipalities in Canada, were largely out of control.
Credit should be given to the Canadian Federation of Independent Business (CFIB) for conducting a study on municipal spending. This study showed that our operating expenditures per capita were the highest of any comparatively sized municipality in British Columbia. Alarmingly, between 2000 and 2009, Penticton’s population increased just 5 per cent, yet operating spending increased by 66 per cent. Clearly, reckless spending was a serious problem, and I relied heavily on CFIB’s findings, sharing them with the public at every opportunity.
What was to be done? Conventional public sector thinking is to declare “underfunding” and look to yet another increase in taxes and user fees. These increases inevitably result in a larger scale of operations that includes more staff and collective agreements that are even more generous. In large part, the same thinking created the problems to begin with.
Applying fiscally conservative thinking in a critical manner and asking, “do we have a revenue problem or a spending problem?” was the alternative question and the direction that we, as a newly elected council, pursued. Determining value for money when spending tax dollars was the next step. Asking the bureaucrats within City Hall was clearly not the answer, as they thrived in this fiscally irresponsible culture. Consequently, we brought in the Helios Group to undertake a core-services review. Helios concluded that our operating costs were significantly higher than similarly sized municipalities and had risen more than three times the rate of inflation. Long-term debt had increased by 600 per cent while our population growth had averaged just 1 per cent to 2 per cent each year. These numbers were both alarming and sobering.
Ultimately, we had to make some difficult decisions. The following are only a sample of some of the tough choices we made after studying over 60 recommendations in the Helios report. We eliminated union positions. Annual salaries of more than $75,000 were reduced to $59,000 and management wages were frozen. The annual budget process started from $0 and sought input from all managers. This was particularly beneficial, as it showed in a more consistent and methodical manner which items we could eliminate.
These were not entirely popular decisions. Councillors and the mayor regularly received intimidating and threatening e-mail. In one instance, the mayor, who ran as an MLA in the recent B.C. election, was accosted at a public forum over some of these decisions.
The results? What was originally a proposed 7.8 per cent tax increase in the 2010 budget was reduced to just 1.4 per cent. In 2011, the tax rate was reduced by .05 per cent, a small but symbolic statement that represented an important corporate shift at City Hall as Penticton became the only municipality in British Columbia to reduce property taxes. Although I left council to run for Member of Parliament in the May 2011 election, the 2012 Penticton tax rate was frozen at 0 per cent, as was the rate for 2013.
Despite these clear accomplishments for the City of Penticton, left-leaning critics erroneously suggest that these fiscal achievements occurred at the expense of infrastructure. In reality, over the same period, Penticton was also able to upgrade the water treatment plant and the wastewater treatment plant as well as undertake a large-scale renovation of the community centre swimming pool. Critics overlook these accomplishments, so they can perpetuate the politically motivated position of opposing all spending reductions in the public sector. In my experience, fiscally conservative views and conservatism in general are unwelcome within the public sector. For example, although it took a majority of council members to undertake these difficult decisions, it was the two members who were most publicly identifiable as fiscal conservatives who most often faced the opprobrium of the reforms’ opponents. Ironically, one of my former colleagues who also supported these difficult but necessary decisions was a former provincial NDP candidate and had largely escaped the same level of scrutiny by the media.
Although Penticton’s fiscal turnaround is not well known around the rest of of British Columbia, it is well known within other Okanagan municipalities and Regional Districts. Under pressure from ratepayers, several nearby local governments implemented similar core-service reviews. Unfortunately, some municipalities acquiesced to management and to unionized labour and established terms of reference that expressly prohibited a reduction in potentially superfluous positions. This negates the value of a report and its potential for identifying much-needed savings. Moreover, such actions create an illusion of accountability and erroneously lead local taxpayers to believe that all is well and that there is no waste to be found.
Local government may not receive as much attention as other levels of government do, but if there is no sustained leadership and common sense, local government can quickly get out of control. Despite the sizeable federal and provincial government contributions to public infrastructure, without firm local government leadership, it can be more difficult to build new buildings and attract new businesses and employment. Without municipal candidates ready to serve and to show leadership with ideas on how to keep taxes low and create an environment for economic development, the status quo of fiscal irresponsibility will prevail. That is something we cannot afford.
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MP Dan Albas has been a Penticton resident since 1981. His company Kick City Martial Arts has flourished, training hundreds of men, women and children to bring out their best. For his work on child safety and awareness, Dan was the recipient Penticton’s “2005 Young Entrepreneur of the Year” award.
Dan has served as campaign chair for the United Way of the South Okanagan-Similkameen in 2006-7 and 2010-11, both times surpassing their fundraising goals. As a community leader, Dan was elected to Penticton City Council in the 2008 municipal elections, where as a first time candidate he won with 5656 votes, topping the polls.
On June 28 of 2012 he became one of the first MP’s in recent history to have a Private Members Bill (Bill 311) C-311 become law with the unanimous all party support of both the House of Commons and the Canadian Senate. Bill C-311 “An Act to amend the Importation of intoxicating liquors Act” amended a prohibition era law that prevented the free trade of wine over provincial boarders.
