Before I begin I want to give an especial thank you to Lou Guerriero who has been most responsive to queries and gaining understanding of the budget.  As he will tell you I was looking at the budget in detail.  But in the end that approach of looking at the micro level misses the key point you as council need to address.  So I stood back and looked at our context, the present situation and the future.  And here is what I found.  Here is what truly alarms me. 

Gravenhurst is not a wealthy community.  Approx 1/3 of the permanent population are over 55 and this is the only age range in which growth is forecast.   Of the 8420 adult population, 3575 or 42.5% are not in the labour force.  Approx 1/3 of adults rely on pensions and are on fixed incomes 

We have the lowest labour force growth in Muskoka and are the lowest income community in Muskoka with the exception of Georgian Bay Twp.      41% of the labour force works in tourism and services sector an area of low wages.   This is a sector which according to Statistics Canada data re tourism statistics has been shrinking and we are seeing business failures.     39% of income in the town is not employment related – i.e. government support programs, pensions and savings are the sources of income.  Average incomes in this town are 19k for females, 28 k for males the composite average being 24,000 dollars a year.  Average household income is 46,000 dollars.  Put these figures in the context of food cost inflation, gas prices etc.  How can these people carry fast increasing municipal taxation? 

Personally I am lucky, I have a modest pension for my many decades in the labour force.  It went up 1.8% this year.   Many other seniors I spoke to have increases in the 0 to 1.8 to 2% range.  None of us see 3 5 or even 7%.    No one I encountered spoke of higher raises.  And of course you all know what is happening to our investments.   Their direction is net negative. These conditions affect the capacity of the town taxpayers to carry the resulting levy.       

The Budget and the Strategic Plan 

You have been urged to consider the budget in the context of the town strategic plan.  And in that plan you state you want to entice people to live and invest in Gravenhurst.  I too want this.  You have acknowledged that decreasing financial resources are a reality.  I commend this insight.  And you said that it is not enough to maintain the status quo.  I say Right on! 

So then I look at the budget.   I see a status quo budget, but one with an operating expenditure which is 6% higher than last year’s budget and 9.2% higher than last years actual expenditure.  This will raise the tax levy by close to 7%.   This on top of the 26.4% over the last 4 years.  In other words a one third increase in the local tax levy in a 5 year time frame.  This in a period of low inflation.  Does this budget meet any of the above conditions you yourselves subscribed to? 

The Budget itself 

Having re-looked at the budget I realized that concentrating on the micro level misses the point.  You need to look at the whole picture and take charge of the situation. 

-          The largest item in the budget, close to 50% of expenditure, is salaries and wages.  And the increase in this line is 11.2% over last years budget and 12.7% over last years actual expenditures.   Obviously this huge increase in the largest line item in the budget has immense impact on the bottom line.  This is the elephant in the room and must be looked at if you are to get control.  This is in the long run much more important than worrying about arches,generators or washrooms.           

Reserves have been reduced by 4.462 million or over 34% in 3 years -          Can the town sustain this base cost increase and reserve depletion year after year?  I think not. 

The Future

oLook at the expenditure categories and you see that the third largest category is already debt repayment.  This budget proposes to increase the debenture load on the town and to pay it back with a  2.5% increase in the operating costs every year.   over 40 years a total of approx. 9.5 million.   This will move this debt repayment item up to 2d place.  Yet we are already depleting our reserves to carry the operations budget.    When do we hit the wall financially?  What then.   

I suggest that you are positioned to start to deal with this if you act this year.  But you must decide to act as to delay will put you even further behind and create more problems.   

I suggest that you revisit your strategic plan and concentrate on 2 items,  

    Implement the commitment to get an “economic development strategy” as priority one and  

Implement your stated goal to “review the efficiency and effectiveness of the provision of service…”  To this end the town should undertake an efficiency and effectiveness review of all town operations, there is a cost involved but it would be money well spent.    

Take a hard look at all the operations and capital proposals.  Ask not what we want to do but rather what can be postponed.  Ask yourselves “ Do we need a new truck this year or can it be postponed one more year?”   “Do we need   ….”   Stop forgoing revenue with fee waivers and exceptions.   Postpone the hiring of new staff.  Get a handle on the best way to deliver the services, there is always a better way of doing business.  Invest in an external and hardnosed review of the business practices of the town and the use of staff resources.  Direct the consultants to find savings.    Implement the findings and then, but only then, start using the savings.   Adopt a business approach to running the town.  You as Council need to take charge.  You cannot continue on the road of business as usual. 

If you don’t take action now I truly fear for what lies down the road.   Unless there is a dramatic change in external conditions and significant industrial and commercial development in the short term we will be in big trouble.        Ask yourselves if you want to bet the future on these things which are out of your control happening in the short term. 

Once again I want to thank you for your attention, to thank you Lou for the work you are doing and to tell you that as councillors it is time to take the actions I believe you are capable of.  The taxpayers of the town will thank you

Lola Bratty 

Jan 13, 2008 

Lou Guerriero

Chair, Corporate Services

Gravenhurst council 

Dear Lou 

I am writing this as a personal and open letter following my reading of the council materials yesterday.     I am most disappointed that your report does not accurately reflect the input given to you by me and other citizens on January 4^th.

At that meeting we gave you a simple message – there are benefits to good consultation processes but you must be serious about consultation.  Ross Ashforth gave you written input and Brian and Hank and Laurie and I gave you verbal input.   

What we said is that the consultation on the budget (capital, operating and reserves components) must take place at a time in the budget cycle that there is sufficient information for informed input.  We all left the meeting assuming that there would be a public meeting on the next to final budget draft and that it would occur in mid-March.   The input process should be informal and similar to a dialogue whereby the public can give ideas and thoughts and Council can listen.  It should not be treated as a formal Council meeting with those formal procedures.  No one has problems confusing a council member in a listening mode and a Council in a decision making mode.    We also said that the consultation materials must be clear, simple, present real alternatives and the implications for decisions to be made at a future time.   They must be ready with sufficient lead times that people can read, understand and think about them.   The materials must also be complete.  For example, with a municipal budget we need to know the costs of running the “programs” of each department, the fixed costs, the costs of new initiatives and their alternatives and the anticipated impact on the reserves.      Interestingly these are the same pieces of information that the councillors themselves must have to make good decisions! 

I appreciate that you want to have some kind of input to your decision making.  But merely telling the public what new initiatives are to be undertaken and providing no analysis does not cut it for budget consultation.  It undermines your credibility as someone who wants to be seen as genuinely listening to the electorate.  I anticipate that the strategy you have undertaken will not get good public response, although I had hoped for otherwise.  I have copied the rest of council in the interests of clarity regarding the input of myself and other citizens.   

Sincerely  

Lola Bratty