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Observations of the 2020-2022 budget

I have now read the draft budget for the town of Cochrane for 10 years now. Here’s what I was able to pick out of the 155 page document listed on the town website for the 2020-2022 budget .

First the concerns and/or questions:
- As predicted the amount of debt from the Spray Lake Sawmills Family Sports Centre expansion continues to impact our town finances. The interest is now at $169,763 per year. This seems like ‘salt in the wound’ when you consider that a considerable amount of cost over-runs could have been avoided if the timing of the completion of this project wasn’t manipulated for political gain and easily foreseen additional expenses, like having to put in plumbing for a possible restaurant, were missed. The need for additional operating capital of $500,000 also suggests that revenue problems could persist.
- There is the ongoing issue of the compensation for four executive positions totalling $904,980. That’s a lot of money for salaries in a town of only 29,277 people but other senior management positions seem high as well. I would also still like to know how much each person makes to enable me to make a comparison for similar positions in Calgary. Sunshine list anyone?
- It was apparent that this budget is primarily based on large capital projects. My concern here is this- with the capital funding in place and our maximum dept level rising without the ‘drop off’ in debt that was previously projected, our ability to respond to unforeseen circumstances such as grants/lower growth/cost overruns is compromised.
- It continues to be obvious that the majority of our taxation revenue base still relies heavily on offsite levies and residential taxes. The issue here is that the growth of our taxation base remains tied to population growth and we still do not have a reasonable balance between residential vs. commercial taxation.
- I was concerned to see that provincial restraint is already affecting our ability to protect the vulnerable, in this case the cancellations of the Elder Abuse Awareness Program.
- It appeared that new positions seemed to suggest that new personal are essentially free as they would be covered by additional revenue/offset by reductions. So you have additional revenue, but are using this for new spending. That’s still spending. When you have a new position that is ‘offset’ by a reduction in services, it is still a reduction in services. I’m not saying that these new positions aren’t needed but I questioned if the apparent ‘spin’ used to justify these positions was needed.
- I also saw a number of new hiring but almost all of them seemed to be in a management/supervisory role. I wonder if the new positions will mean a ‘management heavy’ administration.
- I also saw $24 million in “new debt”. Likely this figure will rise if any of the large capital projects go over budget.
- According to the budget our debt servicing costs now total $1,258,239, and growing, per year. We also pay $70,000 in banking fees. Those seem like big numbers to me.
- All of the estimations were based on ‘assumptions’ that the town cannot control. To a certain degree this is unavoidable for this type of budget; however, I was concerned that one of the assumptions was that the Municipal Sustainability Initiative (MSI) capital grant would continue at 2018 levels. With our governments current focus on ‘austerity’ and a now demonstrated willingness to retract from past/present/future funding commitments, I don’t know if this assumption is realistic.

I also saw a number of spending items/projects estimations that seemed high to me. I am not against these projects and I do not pretend to be an expert in all these areas so please take this into consideration. The projects in question include:
-$19 million for a new protective services building.
-$60,000 to stain the exterior of the RancheHouse.
-$150,000 for what appears to be for cleaning the storm pond.
-$500,000 for an ssset management system. The ‘system’ appears focused primarily on centralizing accounting practices.
-$515,000 for four different master/design/strategic plans. Why our existing town staff can’t do this work?

On a more positive note, I did see that our estimated growth projections are now at a more realistic and sustainable 3 per cent and I didn’t see any obvious egregious spending that I have seen in past budgets
- Dan Cunin

 




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