On Budgets and Moving Forward

I don't blog a lot and certainly not on any kind of regular schedule, but after a couple of days deliberating the City’s Operational Budget, here I am at the keyboard, with a lot on my mind.

On Monday, we will continue deliberations and the final vote will take place on December 15th. While there are a couple of motions to be debated, there aren’t a lot of suggested changes at this point.

As most people are aware, there are many fiscal challenges in our province and in our city. The primary issues with this year’s municipal budget include:

1.       A decrease in the unconditional grant from the province of $3,219,293. Since 2010 the grant has gone from $11,593,117 to $5,296,251 a year, a decrease of $6,296,866 in 6 years. However, this wouldn’t be so bad if the formula was fair. The way this grant is calculated today, Moncton is penalized for being successful.  We are in a “pool” with Saint John and Fredericton…there is a pot of money that is divided among the three of us. Since Moncton is doing well, we get less money. I don’t have a huge issue with this, since, as we all know transfer payments are a Canadian tradition. However, I do have a problem with the fact that when this formula was presented, there was another component to it. This other component involved non-residential tax compensation and the formula was supposed to return to municipalities the business tax that they generate. Some have estimated that this would be in the $12 million range for Moncton this year.  In my mind, this would be fair. As it stands now, we are being penalized for being successful.

2.       Declining assessments. This is an issue because we had budgeted for more growth (revenue) than we are actually experiencing (subdivision development hasn’t maintained the growth rate that was projected). While this isn’t necessarily all doom and gloom (I’m a big believer in smart growth, not necessarily all growth), it does affect our financial situation. As well, other sources of revenue are down.

3.       There are a lot of unknowns. We don’t know how much more the provincial grants will decrease, we don’t know what the final tally will be for the June 4^th event, we are entering CUPE negotiations, and we have a lot of upcoming major capital requirements, including the DT Centre, a $42 million police facility, the NW Centre, a new fire station, infrastructure requirements, etc.

4.       Snow.

So, what should we do? There are lots of options. We could raise taxes, we could cut our budget further (however, at this time it seems pretty bare bones, and there isn’t a tremendous amount of flexibility when you consider that Fire, Police, fiscal services and wages and benefits amount to 77.7% of the total budget of $144,567,233 or $112,328,740…leaving $32,238,493 to do everything else that the city needs to do. As well, 19 jobs will be eliminated in the next two years, primarily through attrition), we could withdraw from reserves and/or we could have a salary slippage adjustment (basically a hiring slowdown, not filling empty positions immediately).

Because there are so many unknowns, our CFO is recommending that we not raise taxes (there have been no tax increases in the last 6 years and the tax rate has increased by $.06 since 2000) but that we acknowledge that we have a structural deficit (we are consistently spending more than we are bringing in), that we immediately start on a 3-year projected budget in April 2015 (at this time we should know some of the unknowns mentioned above) and develop options from our long-term plan for balancing our budgets from 2016 onwards.

In order to accomplish what our CFO is recommending, we are going to have to have some very open and frank discussions. Council will definitely need to hone our priorities (currently we have 16 operating priorities and 5 capital project priorities, which in my opinion, is WAY too many).  Is it possible? I believe it is, but it is going to be tough. We are going to have to have a deep look at the way that we do business. We need to embrace innovation in all of our businesses (all 82 of them) and empower staff to be much more entrepreneurial. (I’m thinking here about our Urban Planning department and the money that they raised this year to do an important community plan, or Parks and Rec who accessed corporate money for more trees.) We also need to focus on sectors where we bring in revenue…Codiac Transit will probably never break even, but if we acknowledge the importance of public transportation, we need to find ways to increase the revenues and decrease the subsidy (for example, only .4% of Codiac’s budget (they have a projected deficit of $7.4 million) is for promotion…if their goal is to increase ridership and revenues, then a much more aggressive and comprehensive approach is necessary, IMHO…I’m thinking of the low hanging fruit like hospitals where employees pay $25 a month to park and a bus pass costs $62…busses pass by both hospitals every 15-30 minutes all day, every day). Another item that is hard to analyze is the fact that 250 City employees will be eligible for retirement in the next 5 years. Additionally, perhaps we need to look much more closely at the 82 businesses…perhaps there are areas of business that the City shouldn’t be involved in at all.

Another very important conversation that MUST take place is with our provincial government. We need to meet with our new MLAs and let them know how difficult the cuts have been for us, and that by penalizing Moncton, our province’s economic generator, we are inadvertently making our whole province suffer. We also need to speak with them about giving us the tools we need to be successful. We need to talk about:

·         the hotel levy

·         arbitration settlements

·         Tax Incremental Financing (TIFs)

·         the inequities of the tax formula

·         permissive legislation for by-law enforcement (i.e., the re-vamping of the Municipalities Act)

·         their MID commitment (it is set to expire in 2015), etc.

We have an excellent opportunity before us to create some important and lasting change in our province. It is time for the province and the municipalities to work much closer and more collaboratively…after all, the entire population of NB makes us the 49^th largest city in North America!

I believe that we also need to engage citizens in these conversations. Government can’t do it alone. We need everyone to step up and get involved. There are a lot of people who care deeply about the future of our city. All citizens need to be involved in helping to make the changes that are needed. (You will notice that I wrote “citizens” and not “tax payers”…because I believe that citizens are much more than just tax payers.)

And, for the elephant in the room, our DT Centre. If you’ve read my other postings, you will know that I’m a supporter. You may ask how I can support this during trying times like this? Well, I think that it is during times like this that bold and audacious ideas are necessary. When I think about Moncton’s past, particularly the closing of CN, Eatons, or the renovation of the Capitol Theatre (20 years ago when Main Street was a wasteland), I think of a community that has so much spunk, determination and ability to overcome. This is just another example of our city’s ability to not let the tough times get us down. We have planned, we have budgeted, we have engaged…we have proactively created a vision of what our future could look like. A vision of our DT where people live, work and play…where there are lots of residential opportunities for young innovators who don’t want cars, who want to walk to work, who want to live where they play. For empty-nesters who would like to downsize, get rid of their car, be able to walk to a concert, and grab dinner on the way, browsing shop windows as they walk to the Centre.

Highfield Square is gone and we own the land (all $12.5 million of it). City Council approved the land purchase (unanimously) and has been putting money aside for years, much like anyone would save for a home. Who goes out and just buys a house without saving for it? This project has been discussed for at least a decade, albeit much more seriously in the last 3 years and many councillors included their support for it in their election platforms.

Will the DT Centre be the cure for everything that ails our DT? Absolutely not. However, it is an important piece of the puzzle. Moncton has been seen as a visionary leader in Atlantic Canada and I think that we need to continue in this direction. Doing nothing, is not an option. Putting a focus like this in our DT sends a clear and vital message that urban sprawl can’t continue. It also speaks to the many developers who have invested in our DT, but are waiting. Waiting to see if Moncton can do it, if we can continue to create our own success. Sometimes someone has to take the risk and get the ball rolling. The waiting game needs to be over. Premier Gallant needs to put aside partisan politics, see this project as the economic stimulator that it will be (the province will get $6 million of their $24 million investment back on the construction alone). I spoke with MP Robert Goguen the other day and he said that the Federal government is ready to go, but they need the province to confirm their support.   

Being a leader is about making tough decisions that look to the future, decisions that not everyone will agree with. I know that when I think about the DT centre, I think about my kids and their friends. They don’t have much of a relationship with our DT because they don’t see the appeal. However, having the opportunity to attend a game or a concert, a Cirque de Soleil performance or a Broadway Musical (Jersey Boys is playing for 6 nights at the London Budweiser Centre), they will be in our DT, experiencing all that it has to offer. They will take the bus, wander around, meet up with friends, enjoy their outing, grab a snack…and be proud of their city. Yes, they may go away for school, but there needs to be something to draw them back. For many of the Millennials today, they can work anywhere. Geography isn’t as important as it used to be, which makes quality of life investments like a state-of-the-art sports and entertainment centre vital to the equation of keeping our youth here. (And, to the naysayers who believe that a centre like this should be financed completely by the private sector, all I can say is that I would like to see some examples.)

Yes, we are living in trying financial times. However, I like to look at our situation through the lens of abundance and hope rather than scarcity and fear. New Brunswick has so much that is good and wonderful and hopeful. We have so many opportunities before us. Yes, there are some very difficult decisions that will need to be made and we are going to have to think about things in new and innovative ways, but I believe that we can do it and create a great future for our kids in our city.

I would love to hear your thoughts about all of this, particularly ideas for cutting costs at City Hall, creating efficiencies in the services that the city provides, possible ideas for innovation or outsourcing…or ideas like this: http://www.theglobeandmail.com/news/toronto/a-thinner-blue-line/article21978969/.

Thanks for reading! I look forward to hearing from you.

Innovate or Evaporate -- GovMaker 2014

 

 

Today I attended the second day of the first annual GovMaker Conference in Fredericton, presented by The New Brunswick Social Policy Research Network (NBSPRN). The goal of the conference (organized in partnership with GNB and Toronto-based MaRS Solutions lab) was to connect innovators from government with open government champions outside of government…hackers, academics and other creative types…all with the goal of shaping the future of governance in NB.

Open data = structured data that is machine readable, freely shared, used and built on without restrictions

The benefits of open data:

1. creating jobs using open data and its commercial potential
2. improved service efficiency through linked data
3. new knowledge from combined data sources

Deputy Premier Stephen Horseman gave a great introduction, citing the new provincial government’s commitment to innovation. He talked about the idea of “innovate or evaporate” and how we can’t keep doing the same thing and expect different results (definition of insanity). He also talked about his government's commitment to “smarter government” which includes seeking solutions from the outside.

René Boudreau, ED at the NB Research and Innovation Council gave a bit of a synopsis of yesterday’s topics and spoke about the solutions that we are all looking for for our province and how they aren’t necessarily within government or corporations, but in the shared spaces. Apparently yesterday privacy was a big topic (ironically, as I was driving home tonight I heard about a security breach at Revenue Canada – I’m sure this is the kind of thing that makes people suspicious of open data, but really, to me it sounds as though we need to have much better privacy protocols in place…very little information at Revenue Canada should be made public…that is not the kind of information that open data is about). René also talked about how to be digitally literate and creating spaces where people play. And finally, he talked about not forcing people to use a particular system and how government should not waste money creating big, perfect systems…never rely on “pie in the sky” solutions. Gaining strong political will and creating a legal infrastructure are vital.

 

And then, the highlight of the day for me: Beth Noveck. Beth was the United States deputy chief technology officer for open government and led President Obama's Open Government Initiative, but she now directs The Governance Lab which strives to improve people’s lives by changing how we govern (and she speaks impeccable French (even though her bilingual 4-year-old refuses to speak French with her…I can relate to that!) – Jody Carr was there and told her that he loved her and thought she should be a honorary New Brunswicker!).

 Beth spoke of the Obama social media campaign and how powerful it was…and then how it all stopped on January 21, 2009…because of Windows 2000 and over zealous security that blocked all social media (and didn’t allow ANY open source software in the White House). She talked about the free speech concerns and the concerns around “forward leaning” – tipping bureaucrats’ and politicians’ hats on new policies – this was seen as provocative (basically, even though everyone talked about wanting to consult the public, this was not allowed – the public was only consulted when everything was finished. Suddenly, after this amazing social media campaign that helped get Obama elected, they went back to George W. Bush’s idea of open government (a YouTube video of the White House Christmas tree seen from the vantage point of Barney, the White House dog!).

 She talked about the fact that basically within the US government there is no meaningful transparency – it is still the “professionals” who work behind closed doors and public consultation only takes place after everything is basically done…the idea of “conversational bureaucracy” doesn’t exist.

 Beth then switched to English only (I loved that she spoke both languages – the repetition helped me a lot because she is a FAST talker!) and spoke about the idea that everyone is an expert at something and that government doesn’t have all the answers and needs citizen expertise (there have been one million volunteers on open street map since 2004 also see https://www.zooniverse.org/ ).

 Here are Beth’s 7 steps to change:

1. Vision – Change needs to be embraced at the highest level. This can be a lofty articulation (i.e., the U.K. has just said that all citizens will have electronic medical records in 2 years – no one knows how this will come about, but without a vision of what can be, nothing happens).


2. Transform the vision – This involves the legal frameworks, the policies the standards for open data. Laws that make it easier for government and corporations to work together. The idea, from a procurement perspective (one of the bigger hurdles) of writing an RFP to find the most innovative suppliers, not necessarily the one with the lowest price. This is also where the specific directions for implementation of the vision come in.


3. Platforms – All the information in open data must be findable. (She told the story that the IRS allows citizens to e-file their income tax, but then the forms are printed out, re-scanned, and then put on a CD…honestly!). She spoke about the need for tools to visualize (i.e., maps showing flood risks, where workplace safety issues are high, overfishing). As well, the idea of “liquid feedback” for government to work with citizens in new ways (not really sure what this means…anyone?). This is also where the focus on which data sets to incorporate comes in.


4. Community – Governments can’t re-engineer themselves without citizens. It is vital to bring new tech talent to the inside and to encourage citizens to collaborate with government, not just complaining about government. Openness by itself does nothing.  www.opengov.hub.com


5. Training & Learning – The need to create and breed innovators through all levels of government. The innovation must come from the bottom up, peer to peer. The need for public labs and innovation labs.


6. Evidence – This can’t be forgotten. Measurement is vital, as is collaboration with universities. Have to be able to show measurably better results (as a politician, I sure like this!). Also, she talked about how the FDR set up a new platform (expert networking software) to find people on the inside with the proper expertise to do the necessary research with clinical trials, etc. (I know, this seems self-evident, but apparently not…)


7. Faith – Belief, as much as evidence, is vital. Belief that a better government is possible, one that serves all citizens.
   She then spoke a bit about the fact that there is a lot of frustration at all levels – government, community and corporations, but that participatory bureaucracy is possible. Citizen engagement is easier in a smaller place (like Moncton or NB). Also, the fact that not all citizens will participate on-line is NOT a reason not to engage on-line. There needs to be a cultural shift…we tend to dis-equate citizens and professionals, and yet citizens need to be consulted on what they know (not just on their opinions and feelings). People are smart and we need to give them more ways to engage, so that they can help solve these big problems. (I know I get amazing feedback and ideas from citizens all the time.)
   David Alston was up next (Chief Innovation Officer at Introhive, Startup Advisor and Code Kids Advocate & Alternative Energy backer). David thinks NB’s size is a great advantage (our entire province is the 49^th largest city in North America). Small is good in this business because we can be agile and quick to make decisions. He thinks we should start thinking about citizens as the experts. But, what is the change that is needed? Unless we know where we are going, it is hard…so we need a big, hairy, audacious goal. His audacious goal? Make NB the greatest importer of millennials in the world. He talked a bit about millennials and how they want to do things that they like, they want to make a difference, they are passionate about change and they are digital natives. However, they also believe that they can do everything on their own (50% expect to create their own jobs…they have seen the state of the job market – they are an entrepreneurial-oriented generation) and don’t feel that they need government…they have kind of left government behind. However, they are also very interested in taking their talents and applying them in some way to solving the big problems (but it really doesn’t occur to them to involve government). They are the generation that will lead us out of our problems, but they will need to work with government…rebuilding this bridge is vital. (Personally, I think that lowering the voting age to 16 and having on-line voting is key here.) David spoke about the start-up culture that has a business model that involves breaking it and starting over if it isn’t working and a culture that embraces mistakes (just be transparent about them). It is all about trust and re-building the trust. It is also about empowering citizens to bring their skills to the table.
   One 27-year-old man spoke about growing up, always considering himself to be part of a global community, always concerned about the bigger global problems and less concerned about local problems. He would like NB to focus on solutions for humanity – millennials will react positively to trying to find solutions to things like catastrophic global warming, food security or moving from fossil fuels to renewables.
   I guess one of the big learnings for me today was to see in action the break-down of silos…and how vital that is, bringing many players across many sectors together. We’ve become very good at putting up boundaries “not my problem”. Unfortunately, this is a really bad practice and in some ways may have led to some of our problems getting so “big and hairy”.  It is so important to bring people together to have these conversations…people of different ages, aptitudes, risk tolerances, etc. And, I believe, it can be the informal networks that drive change.
   I think some good connections were made today, but I have to admit that I was a bit disappointed to see the average age (high) of those in attendance and the seeming scarcity of the “hackers and other creative types”. But at the same time, the message was delivered to the government decision-makers, and that’s important too. Bringing people together for this kind of discussion is a vital first step to change. Congratulations to all of the organizers that I know worked extremely hard to pull this off (I think I must have received at least 10 separate invitations...and of course, ice cream at break time, you simply can't go wrong with that!).
   The rest of the day was led by Jerry Koh, Innovation Manager and Foresight for Social Change at MaRS Solutions Lab. We did a number of interesting exercises in groups to generate ideas (but it’s late now and I need to go to sleep!). Let me know if you have specific questions (and any inaccuracies I've made...didn't have much time to do this!). Actually, I should be asking you: what can you do to help move the open government agenda forward in our city and province?
   
   
   Here is a fun video about open government.