(originally published in the Fourth and One Fifth February 2014 issue)
A year-end newspaper article quoted our Mayor Thompson as saying “Councillors can be proud we have developed our strategic financial plan and identified the municipality is in good shape”. This puzzled me, as I had a different interpretation of the events of the past year.
The Strategic Financial Plan (SFP) was created by a consultant in late 2012 and called for reducing the infrastructure funding gap. This would enable us to fund the replacement or refurbishment our aging roads, sidewalks and facilities as required in a sustainable fashion. This is a huge challenge as in 2012 this deficit exceeded $3.6 million dollars annually. (All facts from the Port Hope website).
Liz Araujo, the former Finance Director mentioned “It represents the first step in developing an approach to address anticipated financial pressures and the infrastructure funding deficit”. Just the first step mind you.
While the plan is a good one, the reality is that things did not go well last year.
The 2013 budget took us in exactly the opposite direction of the strategic financial plan by reducing contributions to capital by about 12% (from 2.4 million in 2012 to about 2.1 million in 2013), while using up 27% of available reserves. Council made the gap bigger!
But it got worse when in February there was a council motion to “adopt the policy statements of the Strategic Financial Plan and direct staff to include them in a … by-law update to be presented to Council by September 2013.” This gave staff six months to get it done. After over 10 months the bylaw has not been prepared and even the chair of the finance committee seemed surprised that anyone would ask about it. Clearly implementing the plan is not a priority. So we have a plan that was adopted but not implemented.
One of the top policy statements in the adopted plan was that “Capital Reserves will be used to fund the replacement or refurbishment of existing assets”. Yet when it came to funding the Jack Burger Centre revitalization, about two thirds of the cost would be borrowed money. Mayor Thompson was quoted “In keeping with our Strategic Financial Plan, we have developed a funding model that balances the use of existing funds with appropriate long-term financing”.
Clearly the plan, and council’s words and actions are not in sync. This points out another gap that needs to be addressed. Council has created a credibility gap by claiming success while actually making the situation worse. The funding gap is larger, the accumulated funding deficit is greater and we are now in an election year when traditionally good financial management takes second place to getting re-elected.
I would urge council to at least partially implement the plan by increasing contributions to the capital program and to address the credibility gap by tackling and describing the implementation challenges in an open and honest manner. Please be more generous with the truth.
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