City manager deserves medal for debunking the two per cent budget fallacy

Armchair Mayor
By Mel Rothenburger
December 16, 2016 - 9:06am

KAMLOOPS — Surely, very few people feel as passionately about their community as Kelowna City manager Ron Mattiussi. As he defended his staff’s proposal for a tax increase of 4.4 per cent on Thursday, he broke down and cried.

That’s right. In mid-sentence, he suddenly stopped, attempted to regain his composure, and wept as he carried on.

Knowing city council would strive for what has become a traditional two-per-cent increase, he reviewed the results of past two-per-cent budgets.

A water system “that people in Kazakhstan would laugh at.” Sidewalks that haven’t been built. Sewers, bike paths and roads that have been postponed. So, Kelowna is now “playing catchup.”

Mattiussi begged councillors not to listen to the voodoo economics of those who perpetually demand that public works be cancelled or postponed, and services cut, to keep budget increases to a minimum. He, himself, ignores them, he said.

“What I do listen to is this council, I listen to the public, and to echo your words, we’re trying to build a great city, and that takes money. Some years it takes more than two per cent. Sometimes, it’s less. It takes what it takes, and it takes the kind of city you want built, not the two or three critics.”

The man should get a medal. He has said what City bureaucrats everywhere would like to say but feel they must fall in with the two-per-cent syndrome, the belief that two per cent is the price point beyond which taxpayers will punish mayors and councils.

Two per cent has become a sacred ceiling. It has also become the floor, for City councils have convinced themselves that budgeting consists of taking last year’s number and adding two per cent. Taxpayers have come to expect it, and reluctantly accept it, neglecting or maybe despairing of trying to calculate the compounding effect of all those two per cents.

Meanwhile, with all the years in which two is not enough, infrastructure and services fall behind.

Budgeting for a city is supposed to be about living within your means, yes, but also about making sure there’s enough money to get the job done. As Kelowna’s City manager says, some years it takes more than two per cent, sometimes less.

(Sometimes, frankly, the number should be zero, or even minus. At other times, 4.4 per cent, or five, or six.)

As Mattiussi said, “I will never apologize for that.”

And what did the council do after hearing him out? It went to work cutting his proposed budget, quickly finding $460,000 earmarked for fire protection that it put off until next year, rejecting a request for extra police, and taking $350,000 out of the parks budget.

And still, the provisional budget now sits at just under 4 per cent. City councillors will, no doubt, lose sleep over that, but Mattiussi can sleep soundly knowing he said what needed to be said.