Sunday, April 10, 2016

The Borealis Bailout

The outstanding debt of the Borealis Music Festival came before council on Monday, with a request that we pay it off.  Now, this was not a city function.  It was nominally run by the Tourism Board, although they said at the time that was only a stop-gap measure, as the intent was to set up the festival itself as a non-profit organization.  As far as I know, that has yet to happen, although they certainly demonstrated that they know how not to make a profit.

The city funds the Tourism Board through a grant, similar to how the museum is funded, but it is not a city board, and none of the board employees are city employees.  This was their show from start to finish.

The only funding that the city provided was $15,000 from the special event reserve of $50,000 that is set in every budget.  This money is supposed to go to events of provincial or national scope, and be applied for a year in advance.  The application failed on both counts, but when it came to council a year ago, only two of us voted against it, not just because it didn't meet the criteria, but also because it was obviously not well thought out, and highly over-optimistic.  They were projecting attendance of 15,000 over three days; they had fewer than 700 paying attendees.  In fact, more people attended on free passes than paid to get in.  If I was one of the people who actually paid for my pass, I'd be ticked.

The city also provided $15,000 in in-kind services - trimming trees, that sort of thing - and blocked off a good part of Kinsmen Park for the August long weekend from city residents - you know, the ones who pay for its upkeep.

I voiced my concerns at the time, and was told by one councillor that my questions were ridiculous.  Apparently, we're just supposed to believe whatever we're told, no matter how far-fetched it may appear (and prove to be).

And now most of my colleagues have decided that we should pay the festival's outstanding bills.  Their logic on several counts is faulty.

First, one councillor said that this was just like the tax reduction we provided to Humpty's last month.  Not so.  The tax reduction was in recognition that a city project, which could have been more efficiently managed, made this business inaccessible to the public for almost four months, during their busiest season.  Had we had crews working long days from the start of the project, rather than doing that in the last few weeks when we were afraid of winter coming early, we would likely have been done a month earlier.  The city was responsible for that mismanagement, and as such felt that a small concession was appropriate.  We also put some boundaries in place so that this will only be an option when work continues for more than 100 days.  And if you want to look at magnitude of assistance, the tax reduction was $8,000 - less than one-tenth of the Borealis Bailout.

Another councillor said that it was just like the subsidy we provide to the Rawlinson Centre.  Again, not the same - we own that facility.  Now, I think that it could be run more efficiently, but so far most of the rest of council has not seen the potential value of actually tendering out the contract, rather than just renewing it, or having contract payments based on performance targets.  But it is a city facility, and we are ultimately responsible for paying the bills, just as we are for the soccer centre or the Art Hauser Centre.  I think that for all of these we could improve the funding models, but they are our facilities.

Some at council are trying to make it sound like this isn't really spending tax payers' money, because it comes from what is euphemistically called positive variances, money that was budgeted for other things but hasn't been spent (like snow removal, because it was such an unusual winter).  But it is tax payers' money, and it annoys me when I think of how we pare down potential expenditures during the budget process, only to hand money over to bail this group out, without any conditions attached.  If other councillors don't think that isn't a dangerous precedent, well, they probably believe that you can attract 15,000 people to an ill-defined music festival on the August long weekend.

There was much contrition from some council members, about how the original grant shouldn't have been approved because it didn't meet the criteria.  They knew it at the time, but still did it, and in fact have done it again, granting $25,000 to an arts festival that applied for the money six months ago, for an event next month, that doesn't meet the provincial/national scope either.  Let's hope that it doesn't lose money.

I know that it's hard to say no, but we keep forgetting that it's not our money.  Council has so little control over factors that cost us money - weather can increase your costs for snow plowing or removing damaged trees, dropping oil prices reduce some residents' disposable income to spend in city businesses, causing some to close, and we lose some of our tax base.  But how we spend our money on discretionary things is totally within our control, and I get angry when I see us doing this just to be nice.  And judging by the people that I've talked to, tax payers get angry about this wastefulness too.

"Nothing is easier than spending public money.  It does not appear to belong to anybody.  The temptation is to bestow it on somebody." - Calvin Coolidge

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