There are calls for an overhaul of the city’s financial management.
This follows city council’s decision last week to reduce increases over the next two years for water, waste water and drainage fees. The water and waste water fees were set to increase by 8.3% and drainage fees were to increase 19.1%. Instead, council found some service reductions and other efficiencies to reduce the increases to 2.5% and 7.4% respectively.
Marcel Latouche, president and CEO of the Institute for Public Sector Accountability says the utility model at city hall is being “manipulated” to enable city politicians to offer voters those kinds of big breaks leading up to elections. Latouche says a properly run utility program puts money away for future capital needs. “I believe they are taking a excessive amount out of the utilities to go to the general fund. Because these huge transfers could have been used to pay for new facilities.” He maintains there is no other way the city can have a $30-million surplus last year and a $544-million rainy day fund. He adds Calgary produces nothing it can sell on the open market to account for such savings.
The Ward One city councillor is defending the city’s financial management. Ward Sutherland notes the city provides utilities for surrounding communities as well. “There is a $1.2-billion debt right now for waste water and water. And that’s for the infrastructure. We are supplying these services to outside municipalities and we’re not allowed to charge them the proper rate to recover it until this year only. So we’re basically subsidizing.” Sutherland adds that the city is working to hold next year’s property tax increase to 0%. He says cuts are being made in the background without making announcements to say “by the way, we’re drawing back in every single budget.”
In these tough times, Sutherland projects the city can achieve one more year of zeros and has challenged the NDP government to follow Calgary’s lead. In 2018, though, he says negotiations with city unions will make it more difficult to hold the line.