Dark magic budget

Draft projections would have been wrong in any year in recent memory

Fixing the roads isn’t a sexy election-year promise, but it’s Jim Watson to a tee. Odd, then, that the 2018 city budget the mayor presented Wednesday includes a cut to road maintenance.

“The changing weather patterns have created major challenges in maintaining our roads, pathways and community infrastructure,” Watson said in his budget speech. “The abundance of rain and spring flooding, the extraordinary amount of snow, and the number of freeze-thaw cycles has significantly impacted the quality of our roadways, shoulders, sidewalks and road beds.”

Potholes are opening, sidewalks are crumbling, people are complaining.

“Since January 2017, city staff have filled over 253,000 potholes across Ottawa,” the mayor said. “Even with this level of activity, we have heard consistently that we need to do more.”

The road-maintenance budget covers pothole-filling, line-repainting, snow-clearing, surface-repaving.

It’s a titch under $117 million next year. If the city hits that number, it’ll be the least we’ve spent on roads in at least five years.

This year, the city budgeted $111 million but expects to spend $126 million.

In 2016, it budgeted $114 million but spent $128 million.

In 2015, it budgeted $108 million but spent $121 million.

In 2014, it budgeted $105 million but spent $122 million.

The city changed its standards for snow clearing last year — you might remember councillors’ ditching the possibility of cutting way back on how quickly the city promises to plow residential roads after snowstorms, but they did approve other nips and tucks — and treasurer Marian Simulik said she and the roads department honestly expect $117 million will be enough.

“These last couple of years have been abnormal winters. At least, I hope they’ve been abnormal winters,” Simulik said. “But we don’t go and say, ‘Well, we overspent by $8 million so we have to increase it by $8 million.’ We look at it on an average, what has the actual impact been to the budget.”

But this, in turn, is at odds with Watson’s observation that wetter winters with more frequent bopping up and down past the freezing mark wreak hell on pavement and we need to adapt. Year in, year out, we get the costs of road maintenance wrong.

Another case in the budget is for the city’s four nursing homes, which Watson didn’t mention in his speech.

In the past year personal-support workers have been fired and charged for abusing patients, the provincial health ministry has ordered fixes to everything from how nurses oversee non-nursing staff to how the homes handle residents with dementia, and most recently the city’s hired an investigator to review their operations. City staff admit that residents in its homes get fewer hours of direct daily care than they would in other long-term care centres.

This coming year, their budget is just under $66 million.

For 2017 the city budgeted $64 million but expects to spend $67 million on long-term care.

In 2016, the city budgeted $62 million but spent $67 million.

In 2015, the city budgeted $60 million but spent $64 million.

In 2014, the city budgeted $59 million but spent $62 million.

Nursing homes full of vulnerable people are bad places to have managers always struggling to hit unrealistic budget targets.

Simulik said this year’s projection is more realistic than previous years’, because her department has corrected a faulty assumption. Across the city government, the treasury estimates that about three per cent of jobs will be vacant at any given moment, which means nobody needs to be paid to do them. But long-term care is like the police or paramedics, not the legal department or the library. It’s “a 24/7 operation,” as Simulik put it; if a nurse quits, people get called in to cover those shifts. It doesn’t save any money.

Still, the core fact here is that the city figures its troubled nursing homes will be cheaper to run in 2018 than in 2017.

Other lowball projections could be there but not as obvious. The roads and long-term care budgets stand out because they’re lower than actual spending has been. If we had to cover the gap between next year’s projections and this year’s spending with property taxes, the city would have to raise them by an additional percentage point.

“It’s a fake budget,” College Coun. Rick Chiarelli said, visiting the row of reporters at the back of the council chamber while the budget presentations were still going on. “The numbers are fake and everybody in Ottawa should hope it gets defeated because it’s not sustainable . ... They can’t possibly produce a balanced budget at the end of it.”

He didn’t have specifics. “But you can see the numbers in each area don’t fund the program areas as they existed last year, for the next year.”

Chiarelli’s one of just a couple of politicians who’ve been on city council since amalgamation. He’s been in on multiple longrange financial plans, trying to look beyond a single year’s needs. He has some credibility. Watson bristled. “I think Rick likes to be mischievous and have fun, but this is a serious document and he should take the time to read it properly as opposed to making some flippant comment that you would expect someone of his seniority to know better,” the mayor said. “There’s no numbers where we’re taking one-time money and putting it in there to get us over the election hump.”

City councillors have had their staff use trickery to balance the budget practically every year since amalgamation: grants from the provincial government meant for one purpose used for another, treating unexpected surpluses as money they can count on again, postponing bigticket projects they know are inevitable, booking unspecified “efficiencies” in city operations as if they’ve already been found. They aren’t doing any of that this year.

Openly using unsustainable methods to kick problems into next year is bad. Underestimating the costs of important services is even darker budget magic, with results both more opaque and more worrying.

We can’t say for certain today that the projections are wrong, only that they would have been wrong in any year in recent memory.

If they are wrong, this budget won’t kick problems into the following year — just into late 2018, when the city has to figure out how to close the gaps.

We won’t know for sure until after the next election. Good trick, that.