Sunday, March 9, 2014

Setting the Budget and the Perils of Lifestyle Inflation

This upcoming week will feature budget meetings - first, the opportunity for public input on Monday after our regular meeting, then the formal budget review on Thursday and Friday.  As I've said many times before, this is the most important work that we do as a council - the budget should reflect our priorities, and recognize the need to weight our expenditures in favour of need rather than want, and for those things that benefit all residents rather than those things that benefit only a few.

We also need to guard against what might be considered as decisions that are going to result in lifestyle inflation.  That's the term that is used to describe how quickly people get used to having more than they used to have, and start to consider such things as necessities, rather than nice-to-have options.  We've all succumbed to this - as an example, when I was growing up, most families only had one vehicle.  Somehow, people managed to arrange their lives around this - carpooling, walking, taking the bus.  In the small town that I grew up in, kids walked to school.  Kids from surrounding farms took the school bus.  A few kids in higher grades might have their own vehicle, but they were in the minority.  Compare that to today, when very few kids walk to school, high school parking lots are crammed with cars and trucks, and the entry way to the school is full of parents dropping off their kids.  And most families have at least one vehicle per licensed driver, often more.

There's a dozen reasons why we rationalize that this is a necessity, but it's more that we're used to the convenience, and would rather consider it a need, rather than a want.  I'm as guilty as anyone - our family has three functioning cars, even though both Andrea and Guthrie walk (or in Guthrie's case, run) to work, and I should choose the walking to work option more often than I actually do.

So how does this become something to consider when we're reviewing the budget?  Well, first, we need to be very careful when we add services without charging a user fee for those services, because such services quickly become engrained in some people's expectations.  As an example, the city picks up grass clippings from residents, at a cost of more than $100,000 per year.  This is one of our more inefficient expenditures, as there's no set pick-up schedule, and not every home uses this service, so it seems that trucks just cruise the back alleys, looking for those elusive plastic bags, which then have to be cut open so that the contents can be composted.

When I suggested last year that this is a service that could be eliminated, others on council objected, fearing that they would get phone calls from people who were upset at this service being removed.  I think that a feasible option would be to have this as a subscription service - if you want this convenience, be prepared to pay for it.  That would provide a real sense of how many people see this as a need only if it's "free" (because, of course, we're all paying through our taxes) - they might change their minds if the actual cost is charged only to those who use the service.

The situation is similar for every one of our city recreational facilities.  We like to have the best, we underestimate what it will cost and overestimate what the actual usage by paying customers will be, so end up adding a half million here and a half million there to our operational costs.  The Art Hauser Centre, the Rawlinson Centre, the soccer centre, the waterslides - all heavily subsidized by taxpayers.  But imagine the outcry if, for example, we decided to shut down the waterslides.  Built when such things were the flavour of the month, with the initial cost a fund-raising project of a well-meaning organization, then given to the city, it's a white elephant used for three months of the year, with ongoing maintenance, repair and liability issues.  There's a reason why you don't see outdoor waterslides around - they don't pay for themselves and are a nightmare to maintain.

Even the golf course, which claims to cover its costs, doesn't include the cost of water usage to maintain the greens, and council has yet to decide that all costs should be covered by the minority of residents that actually benefit from having such a facility.

We have to scrutinize every request to spend new money.  Even harder is changing services, either by increasing user fees to reduce the cost to all tax-payers, or by stopping services or closing facilities.  But these are the hard decisions that need to be made.  Saying yes to budget requests is the easy path to follow - you're saying yes to this or that interest group, and hoping that the resulting good feelings will overshadow the inevitable crankiness that happens when taxes go up to pay for all of this agreeableness.  But the costs that are incurred will last long past the initial elation at having yet another wonderful facility, when future citizens wonder what on earth we were thinking.

"A budget tells us what we can't afford, but it doesn't keep us from buying it." - William Feather

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