Take a hard look at City surpluses

Editor: Thank you for the  recent editorial (The Times, Feb. 23) suggesting that municipal councils should consider the merit of foregoing automatic pay increments issued to themselves on an annual basis. I introduced such an amendment in 2010 and failed to gain support from the mayor or Langley City council majority. Even if adopted, as you suggested, such a measure would be symbolic at best. Council did reduce travel expenses by $6,000 in 2010 but such tokenism did little to influence municipal spending practice. This year, once again, staff has identified a “gap” between revenues and expenditures to justify a tax increase that compounds increases of previous years. There are far more substantive measures that could be taken by City council more willing to reduce the escalation of taxes.One such measure is to look at new approaches to the allocation of year-end surpluses. The City is required to balance its budget. Every year in February, council is presented with a budget that projects a revenue/expenditure gap to justify a tax increase. But every year for the last five, the year-end financial statements have reported generated surpluses. Put simply, the taxpayer was told that a 5.22 per cent increase was needed to balance the budget. At a recent public meeting, staff were asked the question, what percentage of a tax increase would have actually balanced the budget at year end? The answer was 3.66 per cent.So doesn’t that beg two further questions — How has this surplus arisen? and Why isn’t that money from the taxpayers’ pockets returned as a transparent residual benefit in some manner?For consecutive years, revenues have been conservatively underestimated and expenses have been estimated at a level higher than the true costs of delivery of service. The City wouldn’t want to predict wrongly, and experience a deficit. But does one have to generate a whopping $275,000 surplus (2010), just to avoid a budget amendment or year-end belt tightening? With surpluses on the capital side, generated from underspent community grants and contingency enterprise funds, $37 million in casino revenues, and well over $20 million in reserve, how much security is demanded at the expense of leaving some money in the taxpayer’s pocket?So where should the surplus money go? Some would advocate a return to the taxpayer as a rebate or dividend by mail or collected in person at city hall. Another possibility would be to fold this into the following year’s budget and reduce the tax rate. Present practice directs surplus, collected for the delivery of ongoing operational services, to capital projects. Another possibility is a blended approach, whereby some of the surplus would be transferred to capital reserve, some applied as tax relief, and some placed in a transparent budget stabilization contingency.

In a debt-free era, should operating surplus continue to be solely directed to capital projects? I’d like to know how Langley City’s capital spending and pace of infrastructure renewal compare with similar-sized municipal entities in the Metro region. In a year that saw 92 per cent of $6.75 million in casino revenues delivered to capital, isn’t it time to reconsider operational surplus allocation?

It should be clear that there is some choice available. The mayor and other members of City council chose not to second any of four tax reduction amendments proposed for discussion. My choice is to now raise these questions through this letter. Taxpayer will have some clear choices in November’s civic election.Councillor Dave Hall,Langley City