Your Municipal Finances; what is the truth in the Township of Langley? Poor Budgeting, Dramatic Spending and Tax Increases……

Posted: May 17, 2013 in Uncategorized

If you ran your personal life or business this way you would be bankrupt in a heart-beat! One of the major surprises I was confronted with was the Township budgeting process and practice. It was obviously a product of years of senior staff control, leading Council around by the nose. On being elected I introduced a NEW “Mayor’s Standing Committee of Finance”, permitted under the Community Charter. From the outset Council was opposed. Here is the complete story about what really happens with your tax dollars and Council’s complete lack of due diligence in getting value for money!

In keeping with the objective of this BLOG, I am dealing with the finance issue, not to rehash the past or re-fight the last election but to use the past and my personal experience in the Mayor’s office to inform and educate the electorate about the facts. Hopefully this information will be helpful when looking at candidates in the 2014 Municipal Election.

Am I qualified to criticize or offer advice for change? I have had considerable business experience, both in the corporate world and in owning my own large lower mainland supermarket doing in the neighborhood of $7 million per year. With close to a million dollar payroll, certification with three unions, 38 employees operating on (at the time) a 1.75% net bottom line, I know what it takes to be fiscally responsible. It is that or you see your life savings flushed down the toilet! I have also had the privilege of serving on Delta Council concentrating heavily on financial issues, Metro Vancouver Finance Committee, Metro Vancouver Director and an Alternate Director of the Municipal Finance Authority. So, in short I had the experience to take it on but nobody could have prepared me for what I was about to find out in the Township of Langley.

Why the need for change, a look back is in order. It is important to put everything into perspective, given my criticism of the budgeting process as well as tax and spending increases in the Township of Langley. A big part of my platform that I ran on was a commitment for a 0% tax increase for three years, coupled with the establishment of a “Property Endowment Trust and Trust Fund”. (I covered this in my previous BLOG Post so will skip the detail here) I made it very clear that one could not happen without the other. Obviously, with that promise made (and I did not make that promise lightly) we had to bring change to the culture within the Township of Langley Municipal Hall and I was well aware that would not be easy.

Tax and Spending History:

The reasons for my criticism are real not imagined!

Tax Increases –

  • 2002 to 2008   + 26%                 6 years
  • 2002 to 2011   + 40.49%           9 years
  • 2002 to 2013   + 46.29%           11 years

A compound tax increase of over 46% in 11 years!

  • How many residents had a 46% increase in pay over this period of time?
  • B.C.’s Cost of Living since 2002 was only       +17.9%              (Stats Canada / B.C.)
  • Spending Increases – Over 3 times the cost of living!

So why would I so strongly criticize our Council of the day and introduce a 0% Tax Increase over three years coupled the Property Endowment Trust and Trust Fund, both in the 2008 election that we won and the 2011 election that we lost? Was it based on a sound principle and plan or a pie in the sky political promise?

Contrary to what members of Council might suggest it was based on a sound foundation of proven experience endorsed by a professional at the Center of Vancouver’s very successful and very active program of today and over the past 25 + years. Despite the success in a number of other municipalities and cities, a response from Councilor Ferguson says it all – in a work shop session in response to a detailed presentation stated “This is Langley it won’t work out here – we are different!” That says it all, unfortunately it speaks to the culture, complete lack of work ethic and ignorance is bliss attitude that exists in our municipality from our elected leaders.

Despite the opposition, I set up the Mayor’s Standing Committee of Finance. The Committee consisted of three members of Council – Mayor Green, Councilors Ferguson and Richter plus three members of our community – a Federal Govt. Auditor (retired), a lawyer and the Senior Managing Partner (CA) of a National Accounting Firm (just retired). It was my intent to have this committee meet and work with Council while they were going through the budget process, all in an effort to assist within the established Council Priorities Committee. They would only be an advisory service to Council, that was the plan. All decisions obviously are and would always be in the hands of the elected Council.

For whatever their reason and I can only imagine why, Council decided they would leave the budgeting process to the Standing Committee who would report back to Council with their recommendations in a timely manner. Well it went down-hill from there, thanks to the immature actions and display by Councilors Ward and Ferguson who at one point crashed a working Committee of Finance Meeting with firefighters and the Langley Advance in tow. Another set up, you bet it was! I was accused of everything from deciding budget changes in private and Council being cut out of the process. Nothing could have been further from the truth and they knew it, but the local press, by virtue of their reporting of the incident, bought into it hook, line and sinker. But Council members got the splash in the local press that they were looking for and typical of the local press they presented a one sided view with no attempt at being objective! What an absolute embarrassment to have three private citizens going through that public debacle!

Now, for clarification, there are many municipalities that utilize Standing Committees for this purpose and it is very clear that this is a Mayor’s prerogative. In all of my years in public office I have never seen such an embarrassing display by elected members of Council against an initiative by the Mayor. To achieve anything we had to break away from the entrenched process that was in place. Unfortunately they (Council members) would fight every initiative that I suggested, regardless of the support from the electorate in the 2008 election.

Despite the difficulties the Mayor’s Standing Committee of Finance faced going through this process and to their credit, members of the Standing Committee persevered and were committed to doing the job they signed on for at NO COST to the Municipal Taxpayer.

Our committee put in dozens and dozens of hours, both in committee and at home. We met with every department going line by line from the outset; something that staff was not used of doing. Scrutiny can be a tough thing! Something that staff had obviously never experienced before!

As an example, at the start of our committee process and in discussions with the CAO, our committee member who is a retired CA from a prominent accounting firm stated he would like to see us adopt a 0 based budgeting format, to which our CAO replied, we do, it is modified 0 based budgeting. That comment just reflects senior staff’s unwillingness for change. Most professionals in the business will tell you, there is no such thing – It is either O based or it is not!

So in conclusion what was the result?

Our Mayor’s Standing Committee of Finance presented a well thought out and prepared brief to Council with a number of recommendations. They were not of the slash and burn variety regardless of the comments by some members of Council at the time, quite the contrary. After a presentation of about a half hour to forty minutes in length there was not one question asked of the committee by any member of Council.

An Interesting side-NOTE: It is interesting to note that the local press, Langley Times and the Advance, despite the work done by private citizens, ignored the recommendations and work put forward by them. I wonder why? Unfortunately this inaction is in keeping with their growing reputation of non-objective reporting the local press has within the Langleys! Again WHY, one has to be concerned and wonder why? Could it be concern for the $250,000 in advertising spending done yearly by the TOL split between the two of them? Just asking?

Mayor’s Standing Committee of Finance Report to Council – Content – Sowing the reasons and need for prudence the Committee provided detail on all of the following.

  • Economic Information and Statistics – A selection of concerning economic news both current and near to medium future.
  • A list of 13 Cities/Municipalities showing their tax increase histories.
  • A Summary of actual Spending and Budget comparisons of 10 Cities/Municipalities.
  • Six key Budget Recommendations to Township of Langley Council, including detailed numbers verified by staff as a result of the recommendations. All Sources / All Revenue / All Expenses)
  • Eight General Budget Recommendations to Township of Langley Council on the following categories:
    • Revenue
    • Budgetary Process
    • Salaries / Wages / Benefits
    • Fleet Management
    • Information Technology
    • Fire Fighting

and

  • Seven individual comments and recommendations from the committee.
  • Staff Positions / RE Staff New requests for the period 2009 – 2012.

NOTE: – Each category above obviously contained a number of recommendations, thoughts and items for consideration by Council. (There was no consideration given)

Revenue Recommendation: One recommendation we put forward was implementing a “Cost of Growth Study” with a view, if substantiated by the study, to subsequently implement a “Community Amenity Contribution” program. This process has been implemented in numerous progressive Cities and Municipalities throughout the province designed to extract voluntary contributions from the development community based on their proposal and costs coming out of the “Cost of Growth Study”. This is not an anti-development stand but is a tool that has been court tested and delivers significant benefits back to the community that otherwise would not be achieved. For the record, UDI (Urban Development Institute) consisting of the development community is opposed to such a plan. Having said that, IF the Cost of Growth Study justified such a program it would have to be substantially less costly than Vancouver, in other words a made in Township plan designed around our needs and costs. It wasn’t about implementing it without study, but is about exploring new opportunities. It seems in the Wild Wild West of Land Deals and Development in the Township of Langley, those gaining significantly are being protected by Council and Staff. WHY? The mismanagement that is going on in the Township is costing taxpayers directly a significant price! I have many concerns about what is really going on in the NEW Carvolth Community Plan. Up to 18 stories – what is being given back to the community in exchange for that license to print money? Who is benefitting? I see Kurt Alberts is representing one of the developers and is supportive. Surprise!

At the conclusion of the presentation of the report to Council they (Council) ignored the Standing Committee’s report recommendations entirely (including a .95% tax increase) and adopted a 5% tax increase within five minutes of receiving the committees report.

It is interesting to note that after going through this extensive process in my first year, recognizing that by their actions Council was not the slightest bit interested in doing the work necessary in the budgeting process, we folded the committee. This was done after a conversation with members of the committee about whether they wanted to continue, and they agreed it would be a waste of time given the complete lack of respect Council had for their work. It is beyond unfortunate!

I was asked by a few members of Council why I didn’t continue with the Mayor’s Standing Committee of Finance? – What can I say “They just don’t get it!” On the other hand I believe they do get it and it is further proof they were only interested in being as obstructionist as possible at the expense of the Taxpayer.

So why should you be concerned about your municipally elected leaders handling your tax dollars!            

A short and quick review of the history of tax increases, spending increases, staff increases and the budget process will only lead you in one direction and to one conclusion – Township of Langley Municipal Hall is out of control, staff are in charge! The Fox is definitely running the Hen House!

In Closing I will repeat my last public comments made while Mayor prior to the final budget vote in 2011. It should be noted and obvious by this time that my comments were not published in any fashion by the local press, but by this time I wasn’t surprised! –

My closing budget comments before the 2011 budget was adopted by Council –

“In response to a number of comments made by Council members in the press with respect to my involvement in the Budget Process – I am not going to get into a war of words with members of Council over the budgeting, spending and taxation process. My position is and has been clear leading up to the last election and through three budget cycles. Nothing that I have seen and heard since has changed my mind of what is possible and what is wrong.”

“Comments made about me publicly by members of Council – I have been a passenger through this process. I can’t budget without a committee or suggesting I am blaming staff. (All of this is patent nonsense and ignores the history of the last 2 ½ years.)”

“Year 1, against the wishes of Council I established a Standing Committee of Finance which included three very qualified Township residents and three members of Council. Council chose to sit that process out.”

“After 5 months of work a comprehensive report was submitted with detailed recommendations attached. Not one question was asked and Council immediately approved a 5% tax increase. Now lets be clear that it is their right, however it also sent a very strong message to myself and taxpayers that it would be business as usual. There were a number of unfortunate incidents through the process.”

“Now lets deal with the issue of somehow – reduced taxation equates to reduced services -. I know it is hard for some at this table to understand, but nothing could be further from the truth. You see, I am not afraid to listen to new ideas, I believe the taxpayer rightfully expects that. We should look at –

  • Service reviews
  • Service Audits
  • Creative service delivery
  • Value for money

I have never suggested or accepted a reduction in protective services.

My comment that it was a staff budget (2011 budget)! This is a fact and is not a criticism of staff, they did their job. They provided Council with a provisional budget on the first of December 2010 for the 2011 year. That budget should have gone through a serious vetting by members of Council through a workshop format in a number of workshops and then with a Council stamp on the budget, go to a public Open House. What is before us today and Council is now prepared to adopt, is a virtual carbon copy of Staff’s Provisional Budget. I rejected it in December and reject it today.”

I have skipped some of my closing comments in the above in closing debate on the 2011 budget, but the above gives you an idea, in my view about where we are going wrong. As I have repeated before –

The Definition of Insanity is doing the same thing over and over again….

 expecting a different result!

Budgets will grow, taxes and spending will increase with a continuing lack of oversight.

The only time things will change is when you elect a NEW Council!

Rick Green

__________________________________________________________________

I am working on a few posts at present that I believe are of significant concern to Township of Langley Residents. Check in daily!

Protect your Democratic Rights – Protect your NEIGHBORS Democratic Rights – stay informed, stay involved and VOTE!!!

 

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Comments
  1. Mike MacDonald says:

    This council, the committees they listen too, staff all still insist that development is a revenue! Development is a line item on their “fudget” as revenue.

    The minimal fees developers pay for paving Langleys prime resources while leaving tax payers to cover the real costs of growth are a joke; its a net loss not a revenue.

    But blindly they follow advice of developers, chasing development fees like a drug they are addicted too.

    Truth is the higher the density the higher the profits for the developer BUT the higher the COST to the taxpayer for BOTH capital infrastructure AND operating costs.

    They ?ignore? what they know!!! Councilor Richter tells them that dense-residential development is a COST, Doug Mcfee tells them its a COST, God knows I tell them, they ban people that tell them too often what they don’t want to hear…

    …and the fact taxes rise 3 times the Cost of living in Langley PROVES its a cost. It certainly proves this council is clueless.

    Isn’t it obvious if high density development was a “revenue” then Langley would be rich? IT IS A NET LOSS…so taxes go up and up to cover the costs – as developers walk with WINDFALL profits.

    At every angle council caters to developers for this miss-belief that hap-hazard development is a revenue (did I mention its a net loss?)

    They are fighting TO pave farmland, having ridicules density reviews, ignoring OCP, ignoring resident stakeholders, allowing developers to do important audits themselves….ignoring resident stakeholders, ignoring resident stakeholders, ignoring resident stakeholders…

    …its a joke, but its not funny.

    DISGUSTING!

    The legal suite fees/taxes they are now choking on the homeowners and renters.

    After years of Coleman-isms like “Affordable housing” (sayings being abused to CRAM houses with suites onto small land) they suddenly admit its all a NET LOSS and put fees on the people! Again! Developers profit BUT taxpayers pay.

    Years after the developers have walked with fortunes from the OVER DENSITY DEVELOPMENT they stick the fees on owners and renters. Its a big circle; they vote for higher and higher density saying its good revenue for the people but then they raise taxes and add fees to cover the costs – after the developers get rich.

    This isn’t even getting into the environmental issues, transportation issues and even social issues of OVER development – development on farmland, spot development or development in areas where there are aquifer/water concerns.

    ie The Wall/University district is a sham! bad in all the regards mentioned here – but again council will cater to developers!! Ignoring any environmental concerns, ignoring any long term plans all for spot development on VIABLE farmland! Even fighting metro-Vancouver long term plans…just a frenzy for development at any costs – costs that the taxpayers and society will pay!

    I’m not a “tree huger” – I’m a realistic person with both technical/engineering degrees and economic education/experience – I’m one who needs balance between economy and environment.

    Economy and environment.
    – The path council is on is not good for either; Council is destroying economy and environment.

    Paving farms, ignoring environmental concerns, and skyrocketing taxes/fess
    – Undeniable PROOF they are destroying economy AND environment.

    We need development, we need economy, we need society, we need the environment.
    Unless some long term reliable plans start in Langley, all we will have is development!

    Langley the next Surrey – and that’s an insult to Surrey at this point.

    • Mike, well said – I can’t add a thing!!! The only thing I would say which is the saddest comment of all, the taxpayers of the Township of Langley are being conned left, right and center, but they don’t know it is happening!

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