Budget mumbo-jumbo made easy

Wed, January 24, 2007

By IAN GILLESPIE, FREE PRESS COLUMNIST


As city councillors and controllers continue to wrestle with the 2007 budget, I've been perusing my copy of the city's "financial report card" handed out at the mayor's state-of-the-city address last week.

And unlike the mayor's rather tedious speech, it's an eye-opener.

This eight-page pamphlet is jam-packed with facts and figures about London's finances, including debt levels, property taxes, financial reserves and more.

I realize, however, this stuff can be complicated. That's where I can help. As an actual journalist -- You want proof? OK. That's my picture, right there. No, no, there -- I can untangle the technicalities and translate the mumbo-jumbo into simple, everyday language for my readers here and around the globe (well, here anyway).

So here we go. In each instance below, the first paragraph contains, verbatim, the details of the report card. The subsequent section is my new and improved translation.

According to the financial report card for 2006, London has seven main strategies:

- "Promote Affordable and Competitive Property Taxes: In order to remain competitive, London needs to provide goods and services at affordable rates and bring stability to the property tax base."

Translation: We need to stop stiffing people blind. Or at least, we need to be less obvious about stiffing them. If we don't, more and more people are going to move to Woodstock. And if they move to Woodstock, we can't squeeze taxes from them.

- "Reduce Debt Levels and Costs: Authorization of further debt should be controlled until debt levels/debt service costs stabilize and life-cycle maintenance projects are funded on a pay-as-you-go basis."

Translation: We really should stop spending money like there's no tomorrow. Because it turns out, there IS a tomorrow. And sometimes it's expensive.

- "Promote Pay-As-You Financing: To fund life-cycle maintenance projects (such as paving roads or replacing roofs on buildings), the corporation should move to pay-as-you-go financing by increasing the capital levy rather than issuing debt."

Translation: Things keep falling apart. But rather than replace an entire roof or repave a whole road, we think it's better to take it shingle by shingle, pothole by pothole. It's much simpler that way.

- "Contain Costs: Vital to creating the capacity required to accommodate growth, cost containment initiatives have been implemented across the corporation to close the gap between the cost to provide services and the ability to fund them."

Translation: We're really, really, really going to try not to spend a whole whack of money on crazy ideas that sound good, but then end up costing us a whole whack of money. Honest. Cross-our-hearts and hope-to-die.

- "Ensure Adequacy of Reserves and Reserve Funds: Adequate reserves and reserve funds are required to help ensure London can continue to afford to pay for both predetermined and unexpected expenses."

Translation: We put all our spare change into an old coffee can labelled "reserve funds." And whenever we need extra cash, we dip into the can. But only in emergencies. And just to make sure we only use the coffee can for emergencies, we taped the lid. Oh, and we hid the can in the mayor's desk. (Left side, middle drawer.)

- "Invest Strategically: Focusing resources ensures that property tax dollars are spent for the maximum benefit for all citizens."

Translation: Maybe that whole hot-tub thing was a bad idea. Same with the karaoke machine. Sorry. And we're not going to "invest" our money under Gord Hume's mattress any more. It's not that we don't trust him. (We do.) But our financial advisers say we can get a better rate-of-return (whatever that is) elsewhere.

- "Manage Assets: It is essential that there be an on-going review of the City's assets to ensure unproductive assets are identified and sold (using the proceeds to reduce debt)."

Translation: Somebody should keep track of all the old stuff we have around here and try to sell it. You know, like a garage sale. Old rotary phones, for instance. And snow plows. Oh, and maybe we can get a few bucks for board of control.