City aggressively looking for efficiencies

Post Date: Saturday, July 02, 2011
Mayor Nenshi-7116I write a monthly column in the Calgary Herald. Here's the full text of my July 1st story:

Happy Canada Day! I'll be spending the day in every part of the city (wonder if I can get from Evergreen to Westwinds in 37 minutes?) celebrating our great nation. In particular, I'll be celebrating the volunteers who have organized events in parks and churchyards for their neighbours to enjoy.

And really, that's what it's all about -building a stronger community in whatever way each of us can.

Your city council held this discussion in great detail over the past few months. While the numbers on the indicative tax rates got all the attention (and we'll get back to those in a moment), the backdrop was the creation of a new plan for Calgary for the next three years. The key elements of this plan are:
  • Ensuring every Calgarian lives in a safe community and has the opportunity to succeed;
  • Investing in great communities and a vibrant urban fabric;
  • Moving people and goods throughout the city efficiently and sustainably;
  • Making Calgary the best place in Canada for a business to start and flourish.
In order to do this at a reasonable cost to citizens, we need to work in two further areas:
  • Becoming a more effective and disciplined organization;
  • Changing the rules of the game to ensure better financial capacity (this means continuing to press the provincial and federal governments for tax reform).
Within each of these areas, we have activities that we will focus on. For example, in "moving people and goods," we discuss a new long-term capital and network plan for transportation that focuses our roads spending on choke points in the existing network, improving the customer-service focus of Calgary Transit, investing in commuter cycling infrastructure, and refocusing pedestrian infrastructure spending in places where people actually already walk or will likely walk.

The challenging aspect of this is how we continue to provide the services people need at a cost we can all afford. We just completed a large public discussion process in which Calgarians told us we have to spend every dollar well, but that they also truly value the services the city provides.

(This dichotomy was nicely evidenced on these very pages on Tuesday - the editorial board argued for the city to use deliberative engagement to solve the secondary suite issue, and directly next to their editorial, Licia Corbella, who chairs the editorial board, took the city to task for spending money on . . . deliberative engagement.)

So, where does that leave us?

After what I would characterize as an insightful, values-driven (though very long) debate, council set aside ideology and concluded that Calgarians would be best served by keeping property taxes at inflation plus population growth, or about five per cent per year for the next three years. (For comparison's sake, the average weekly earnings in Alberta increased about 4.7 per cent last year).

This doesn't mean, however, that we will just keep doing the same stuff we've always been doing. Because we only control about half of our revenues hrough the property tax, constraining our taxes to grow at inflation means that our expenses need to grow at half the rate of inflation.

In real terms, that means that council has now directed cuts of about $140 million over the next three years. I am confident that we can do this - there are more efficiencies to be found within the city budget.

If the cuts are too deep, or remove services that council members think are important, council could conceivably reverse them in November. But we have to take leadership in searching for efficiencies throughout the organization.

We won't be able to do this forever; the city cannot hide from inflation. Imagine how increases in the price of gas have impacted your personal budget in the last few years. Now think about how many tanks of gas the city has to fill every day -fire trucks, buses, garbage trucks, police cars. These are costs we can't control.

But I think that there are step-changes in efficiency possible, and I am looking forward to results from our new zero-based budget review process in this threeyear cycle.

The other big issue is debt. I hate debt, and I particularly hate interest payments, since I think of them as wasted money. Of course, sometimes we need to incur debt to build things that we don't have the cash on hand for -it's like taking out a mortgage. But such debt must be accompanied by solid plans to pay it down.

Unfortunately, we have incurred an enormous debt in providing safe drinking water to Calgarians, and bad decisions by past councils meant we have been digging the hole deeper and deeper.

And that is unacceptable. We can't charge less than it costs to provide clean water and expect our children and grandchildren to pay the rest, plus interest.

That's why we had to bite the bullet and increase water rates by about $8 per month next year. It was, I believe, the right thing to do.

In the end, taxes will increase at the rate of inflation, utility rates will help us reduce our debt, and the total amount taken by the city will remain amongst the lowest in Canada.

And we'll provide the services that we all need to have an even better community.

- Mayor Naheed Nenshi