The most important figure I look for in the town operating budget is the change in net cost of operations. According to the executive summary, the increase in 2013 over 2012 is 5.7 per cent. The town has been averaging five per cent increases for years.
What rescues the tax rate from going up by that much is, of course, the expanding assessment base as the town grows. But, the rise in net cost of operations shouldn’t always have to match Cochrane’s growth. There have to be economies of scale within the town administration. Why would we need more people in corporate services, for example? How much does a growing population impact this aspect of Town operations?
And, the average 1.49 per cent tax hike for Cochrane residents ignores the various fee hikes the town introduces most years.
Because the biggest expenditure in the operating budget is personnel, let’s examine that. It represents 42 per cent of costs. The new council should question whether wage rates should follow long-time policy of being at or above median rates. The budget makers of every municipality look to other municipalities for comparisons. Then chase each other in an ever-upward spiral. Town employees are not only well paid; they have outstanding benefits packages.
The jump in overall workforce costs in 2013 is 4.3 per cent. That may include new positions, but the Canadian pay hike average is 3.1 per cent – with much of that upward push driven by governments. Cost of living increase for town employees is 1.7 per cent. That’s 50 per cent above the Canadian average (according to the town’s own figures). Why?
The other factor driving pay awards higher is the so-called grid system that’s so entrenched within the town. Almost everyone is on a grid and almost everyone seems to move up the grid every year.
That is why many departments have hikes in personnel costs of around 5.5 per cent, without additional staff. That is too generous, especially when you consider the Cadillac benefits plan in place. I specifically question why personnel costs for the Executive Leadership Team have jumped 6.5 per cent. That screams out for explanation.
The 11.4 per cent jump of personnel costs in the Planning Department is another anomaly that needs explaining. The budget document refers to them as “market adjustments for eligible staff” or “grid step increases.” What criteria are used to justify these sorts of increases almost every year?
This budget critique is concerned with only one aspect of the operating budget. What about the massive capital budget bulking up like a wrestler on steroids? And, a vital factor that hasn’t been discussed much is the ongoing operating costs arising from new capital projects.
One example: We’re going to be asked to pay $8 million for a new RCMP station.
Also in the budget is the estimate for $300,000 more in operating costs for the building in 2015.
What about all the other projects that will also boost operating costs. If you’re having trouble paying your taxes this year, it’s going to get worse.
Please, council members, don’t be afraid to question administration spending assumptions.
I’ve only scratched the surface of areas you should be looking at.