Tough Medicine Tastes Terrible But it Works

Frontier Centre, Local Government, Media Appearances, Uncategorized

A funny thing happened this week while I was at my local paint store. The gentleman serving me seemed anxious to tell me something or ask me a question. Once finished with the paint business he asked, “So, what’s new in the world of politics”? Before I could answer he volunteered that he didn’t watch common council sessions, but last week decided to tune in to the televised meeting. Halfway through the meeting he didn’t know whether he wanted to shoot the councillors or himself. (I think he was trying to tell me he was not impressed). This was early in the morning before customers started to trickle in so before I knew it there was a small group of employees engaged in the discussion. Questions like, why has a $20-million police complex become a $100-million urban development without more public involvement? Why is the pension board suing Coun. John Ferguson for questioning the management of the pension fund? Isn’t that part of what we elected him to do? Why is Margaret Totten looking into legal action against the city for discrimination? Isn’t her husband, Terry Totten, the city manager and her boss? Does that indirectly mean that she is suing her husband? As you might expect I don’t have the answer to any of these questions any more that the next man on the street. Councillors, can you enlighten us? The good news is that people in Saint John, in increasing numbers, are paying attention to what is happening at City Hall. The bad news is they don’t like what they see. There is a message here for both City Hall and Common Council. As I final note I will say that the folks I talked to are not prepared to paint all councillors with the same brush.

There are those at City Hall and on common council who feel that I am picking on them through The Silent Majority column. Since we have now entered that Christmas season I will turn down the burner a bit and offer some food for thought.

While in Halifax this week I had an opportunity to attend an AIMS (Atlantic Institute of Market Studies) presentation on the 2007 Local Government Performance Index (The Financial Analysis of 30 Canadian Cities). The guest speaker was Larry Mitchell, a senior CA with more than 30 years experience in accounting, commerce, local government practice and policy. Mitchell was born in Canada but currently lives in New Zealand.

I arrived at the session a bit early and had an opportunity to talk to him both about the transformation in New Zealand, and in particular the challenges municipalities faced during the mid-1980s. I was able to talk to him about some of the challenges we face in Saint John – issues such as infrastructure, outward migration of the population, high tax rates and the high rate of poverty.

He was a CA with a major accounting firm in New Zealand in 1986 when the country was on the verge of bankruptcy. The newly elected Labour Government, realizing the seriousness of the situation, quickly put in place legislation that dictated performance and accounting standards at both the federal and for all municipalities. All municipalities were required to use GAAP (Generally Accepted Accounting Principles).

By using these standards as well as the Local Government Performance Index it became possible to measure, compare and track with reasonable accuracy all elements: revenue, assets, capital expenditures, etc. for all departments. Municipalities knew how they rated in terms of the effectiveness and efficiency of all municipal operations. Councillors had the necessary information and tools to do the job they were elected to do. The order of the day quickly shifted from budget-driven operations to cost-effective operations. Some departments were privatized and some services outsourced.

It was tough medicine, but it worked. In three short years Christchurch, New Zealand was transformed from a financial basket case to a financially stable and growing community.

He suggested that when it comes to Canadian cities we lack the complete information needed to arrive at an accurate rating system. However, based on the limited information that was available, Surrey, BC had the best rating, second was Mississauga, Ont. with Halifax coming in at 25 out of 30 cities.

It is interesting to note that Mississauga’s mayor is a lady somewhere around 85 years old, has been re-elected for the past 20-plus years and is known for her high level of integrity, openness and tough get-the-job-done, no-nonsense attitude.

The analysis was done for Canadian cities with a population of more than 100,000 people so Saint John was not included. If Halifax is 25th on the list you can draw your own conclusions as to where Saint John might be positioned.

I asked him if high economic activity masked underlying municipal problems and his answer was no, and cited examples where communities that were economically challenged rated quite well.

In his opinion, and based on his experience, an accountability framework as well as a Local Government Performance Index is no substitute for good leadership and a council with the courage to prescribe tough medicine when it is required.

Herb Duncan is a Saint John businessman who has followed city issues for 33 years. He can be reached by e-mail at Duncan.herb@telegraphjournal.com. His column appears on Saturday.