Welcome back my friends. I made cookies but then I ate them all reading this budget. Before we begin you should probably refer to my 2019 Operational and Capital Budget and 2020 Part 1 –Operations , Part 2 ABCs and Part 3 – Capital. As each year’s budget builds off the previous year’s; reviewing what I saw then was something that I did before reading this year’s budget. I am not repeating the same items year over year. When I get into specific items below, the numbers in brackets below are the PDF pages numbers that you can find the specific issue on, this number is likely different than actual document page.
The Bigger Picture
Before we dig into some specifics. As inflation is the talk of the town, I was curious what the operational budget would look like under a few scenarios.
The blue line was the approved operating budget for the City of Windsor from 2007 to this years proposed budget. The City’s overall operational budget has grown by $112 Million between 2007 and 2022 proposed budget. This represents $7.48 Million per year on average. Now not all of this comes from the levy as provincial transfers, users fees etc. do impact operational decisions. Certain capital elements (Aquatic Centre or City Hall) can change operational funding levels. You can track the hold the line years with the operating budget reaching a low in 2013 of just $713 Million before beginning to track upwards.
The orange line, adjusts for inflation, in the following year based on the approved pervious year. In other words, if the operational budget was adjusted to the next year to match inflation based. This is a bit of a wonky way of tracking year of year what would have an inflationary increase on last year looked like. You can see in 2014-2019, the operational budget actually grew faster than inflation.
The grey line tracks an inflationary increase every year from the 2007 operation base in other words as the costs went up, budget went up equal to inflation. It would see the City’s operational budget break $1 Billion for the first time this year and is about $131 Million more than the proposed budget for this year.
Although $131 Million sounds like a lot, over 15 years it represents less than a 2% levy increase (albeit, just for operations and doesn’t account for any fees) each year. As you read this through this post and hopefully the broader budget documents, a concept that you might want to think about is opportunity cost. It is true that by holding the levy and line (a debatable term), taxpayers saved and rightly so, but there are compounding benefits for investing, even if to match inflation were missed out on. Some will say that no dollar spent is a good dollar spent by government, that is ideological dogma that has been academically disproven in a number of different spaces. I am not advocating for unlimited spending, but I do think having a vision and planning for the future makes sense. I don’t think this budget does much of that.
Operational – Not Recommended
I have largely ignored the mundane items like hiring a clerk at the fire department or not changing the cell phone plans. I will note there are a number large items like closing pools, libraries and not burring unclaimed bodies are so ridiculous that it makes that 10% cut process a laughable exercise. At this point administration is almost daring council to do something politically suicidical in order to keep up the façade. Instead I focused in this section on potential revenue generation that is be left on the table.
Addition of an Active Transportation Position- Active Transportation Engineer (5) – What I take from this is the plan was developed and approved in 2019. Staff has prioritized this 1 of 2 positions related to that plan. The notes state this is position would “the Active Transportation Engineer position will allow Administration to take full advantage of funding opportunities from senior levels of government and to help complete the overall active transportation networks sooner in the City of Windsor.” In other words, capital funding is being left on the table by not funding this position as existing staffing don’t have time to do the work. (NOTE This was a FRIDAY NIGHT ADDITION)
Data Analytics Staffing (9) – “EXPECTED OUTCOME: Automated processes could be used to create an analytics dashboard to empower Finance and departmental managers through self-service access to information to analyze budget-to-actual variances, perform trend analysis, and to identify opportunities for streamlining costs. More timely and relevant access to financial data is expected to create management efficiency.” – City would save money, time and resources by doing this but not I guess. A least, 2.5 FTE of effort would be saved for $360k per year, allow staff time to be better utilized.
Addition of an Additional Planner III – Economic Development Position (15) – A position to literally implement Windsor Works (for what that is worth). Arguably this position would speed up development processes helping create additional revenue in the long term by having new business locate, operate and pay tax in Windsor.
To Replenish the CIP Reserve Fund 226 (16) – At the end of this year there it is projected that will be about $600k left in this account with two new CIPs coming online next year. What is likely to happen is a mid-year report during an election campaign requiring a replenishment of this account. If development is expected to be rapid and utilized in these CIP areas, why aren’t you being proactive? Where that money comes from is the question, or you could replenish it now out of the levy and ensure the account replenished in the future.
Establishment of Dedicated Funding for External Investigations of Workplace Complaints (40) – I had a friend reach out with a formal complaint about harassment from a City Staff person over social media this past year. I recognize that this is for “workplace” complaints but she never heard back, maybe this is why.
Creation of a Transit Reserve (109) – Although not necessary generating revenue, seeding a reserve fund to replace transit vehicles at the end of their lifecycle kind of makes sense.
Operational – Recommended
The Recommended budget is in my opinion somewhat mundane.
Vacant Home Tax (21) – A brand new tax on vacant houses is expected to raise approximately $100,000 next year. Council still has to determine a rate of this tax but given the lack of slack in our local housing market I am curious if it would actually make the $100,000 total.
Finance Department Hiring (30-42) – There are about a half a dozen financial positions that require being filled this year. Financial analysts, clerks, and payroll staff, the positions read like an administration that is so starved for resources it’s about to stop functioning. Although a lot of the explanation is put towards growth, I would also point out that almost all these roles, despite being needed on a permanent basis are being paid for out of the budget stabilization fund on a one time basis totaling $470,099 rather than the municipal levy.
Loss of Contractual Ice Rental Revenue (113) – Windsor Minor Hockey Association pulled out of the City of Windsor Arenas to the tune of almost 210,000. 39 hours of ice time just freed up at arena across the City which is interesting given the previous demand if these hours can be filled or if it means that there is dead space in City arenas. I seem to recall, Addie Knox arena being a focal point of the proposed redevelopment but if there is no anchor tenant, what happens to the ice pad? Given the talk of the need of a new curling rink...
Establishment of Operating Budget for 185 City Hall Square South (167) – Did you know the City bough 186 City Hall South and now they have to maintain it? I didn’t. They now have two tenants as Motor City Credit Union and Legal Aid Ontario currently are in the building and there is no specific plan for redevelopment other than it might become part of a campus downtown? The City just past a work from home trail program this summer, do they need more space?
Property Taxes Resulting From New Assessment Growth (323) – Over $1.8 million in new assessed value. This actually down from $2.5M in 2018, $5.4M in 2019 and $2.8M in 2020. It makes me curious if development in the City slowed down this year, or moved outside the municipal boundaries.
Budget Stabilization Fund
I was also curious how much was being pulled out of the budget stabilization fund. In the 2020 External Audit you can see the Budget Stabilization Fund had $20,296,000 in it. It is likely that over the 2021 year additional funds were added (removed) to the stabilization fund. I don’t recall seeing a formal status of the fund prior to the budget it is likely it was updated but I don’t have the report on hand. This year the recommended operational drew approximately $6,735,000 from that fund. Based on my math, this is almost a 1.5% tax increase not required. For comparison, in 2021 the Recommended Operational Budget only utilized $2,438,216 from the BSR.
What I think is important to think about are that many of these “one-time costs” aren’t actually that in my opinion. Many of them are covering a needed position that are permanent because council won’t make them, backfilling inflationary cost increases and or in-camera items. In-essence they are deferring the cost to a reserve fund hoping that those funds are always going to be there year over year.
I wanted to look at how this year (and future years) were projected compared to last year’s approve budget. So I did…
In total there is a difference of approximately $84 Million between the 2021 approved so we have more money. A big chunk of this is Adie Knox but you can see most areas are spending more over the long term.
Some specific items that caught my eye:
Advanced Analytics and Process Optimization (23) – This is for Windsor Police and includes the works AI driven “Predictive Policing” as an example usage. It doesn’t come until 2026 but there has never been a conversation in our community about whether or not that is a good thing, particularly since police AI has been proven to racially biased in the US.
Confidential Legal Matter (In-Camera) (149) – 1.5M per year for the next decade has been set aside for an in camera matter. If I had guess, the City lost the Spring Garden case this past year, a payout could be coming.
Diversity and Inclusion Initiative (Phases 1 and 2) (167) – I find it weird that a D&I initiative is funded through the capital budget.
Playgrounds Replacement Program (229) – There was an announcement of an RFP for playground replacement but the funding for those replacements are actually spread out over the next 4 years (assuming it isn’t coming from another source). Although the playgrounds were announced to be replaced back in the summer, what isn’t clear to me is if the RFP is to do this work all next two years or over the 4 years that is funded. Are funds being pulled forward?
Kauth’s Expansion Plan (313) – An extension of a private road to service additional properties near cargo lands in Ward 9 for $1.175 million. I have no idea what is going on here.
ICIP-TW Master Plan Implementation- Phase 1 (590) – After $800,000 this year no money is set aside or budgeted for master plan implementation.
This is an election budget, plane and simple. It is designed to do a fair bit by spending little. The use the BSR to fund operational funding allows needed staffing to be put in place without raising taxes. The Friday night before the budget meeting announcement of new money being available to fill some gaps and complaints is certainly interesting brinkmanship. What I find interesting about that is there was no Ministry of Children’s Services Announcement this week (or few previous weeks) on a topic that related to the City of Windsor. In other words the City was waiting on this money for a while and just luckily showed up or it was already in house and was held in reserve as it is a provincial funding source and not a municipal one.
As many of you know, I have podcast where I talk to Mayors, Councillors and other leaders from across SW Ontario. The joy of that podcast is that I get to learn what is happening in other communities. Like how the City of London put $26M towards electrifying their bus fleet in this year budget. A week later the moved forward in partnership with non-profit and private developers to move forward the Mayor’s plan a plan to build 3,000 affordable units in 5 years based. The first 600 new units (400 of which were affordable) were supported on December 7th with final budget approval Dec 21st. City of London does multi-year budgets over multiple weeks of debate at council and committee level.
Guelph passed a 4.21% budget on an 8-5 vote and the Mayor who voted against then after a 10 hour session said this following on Twitter.
The Waterloo Region after intense community pushback saw the police board cut $2 Million from the police budget, reducing the proposed increase from $12.4M to ~$10M. This is an upper tier government I would point out, so each municipality had their own budgets still to come in.
Then we get to Windsor. We have Windsor Works, which is flawed and I don’t know where it is implemented in this budget because many elements are in the not-recommended section. We have a newly released CUI Report (which I am featured in) that is by no means perfect after my first read of it. When you are setting aside $15 M for in camera item yet you can’t set aside any money after this year for a transit master plan that was unanimously adopted, you can see the priorities of council. That being said the same way $20M appeared in Adie Knox, maybe next year Santa might bring us a transit system plan that is funded. To me what it means is there is no vision.
In many ways I feel like we are ship without a rudder, this budget doesn’t do much to change that. Sure there are foundational elements, that will help, but they require of commitment to move forward (whether the IT initiatives or the Homeless hub) over the long term. This council I would argue has struggled to form or articulate a concrete vision for the City that would be a foundation for a commitment. The last minute additions to the budget are the first parts of electoral silly season, but those additions create a path for what I foresee a relatively smooth passage.