I read with interest the letter by Chris Terris in today’s Penticton Herald, on the event centre referendum approval of costs of $56.16 million while actual costs added on another $23.24 million. Lack of council accountability affects the sustainability of affordable taxes in the community. If it doesn’t work, throwing money at it isn’t in the best interests of most taxpayers.
Public-private partnerships can take the onus off the taxpayer to provide facilities, while still providing the community with those amenities. Chilliwack is a good example. They built a $25-million, 5,500-seat arena using only $6 million in taxpayer funds. Contrast this with Abbotsford’s 7,000-seat arena built with taxpayer funds at a cost of more than $55-million. That over-budget project failed to have the risks properly transferred to the private sector as in the case of a properly set up P3. Abbotsford’s council has voted in a 16 per cent tax increase to cover the overrun cost.
Then, of course, we have the super-duper Penticton model passed by referendum for just under $60 million; which immediately became $80 million tax dollars and still counting.
Penticton can have it all if we go about it the right way. But we will certainly never have it when we pass a referendum to spend under $60-million and council takes it up another $23 million.
Binding provincial legislation is needed in B.C. The Ontario Municipal Act has been amended to allow municipalities to create new positions; auditor general and ombudsman, for example, to enhance local accountability.
However, many municipalities ignored this legislation as it is not binding. Provincial legislation must be enacted to ensure accountability, uniformity and innovation in the business processes used by municipalities.
Contracts have to be performance-based with penalties for failure and incentives for success. Risk must be transferred to the private sector. Business has an effective way of dealing with risk. They can’t dip into the public purse so they can keep failing.
A recent study by the Frontier Centre for Public Policy found significant deficiencies in the accounting practices of Canadian municipalities. This obscuring of transparency undermines the ability of the taxpayer to understand whether their tax dollars are being spent wisely. Canada is behind international standards with its lack of mandatory and basic accounting for infrastructure assets. The federal and provincial governments need to address these issues; which affect every municipality in this province.
Taxpayer-friendly laws that allow municipalities to do more outsourcing are needed. The pension liability in the municipal sector is growing and unsustainable reaching crisis proportions in the next ten years. Greater outsourcing would help to mitigate this liability. Retirement age needs to be increased from 55 to 60 or even 65. When the expected age lifespan was 70, retirement at 65 made sense. Not so today, with 30 years of retirement ahead.
According to a recent article on municipalities by Bruce Hollands in the Canadian Taxpayers the following is needed:
1. Make provincial and federal funding to municipalities contingent upon more outsourcing, improved accounting practices, competitive tendering procedures, greater use of P3s, group purchasing, etc., within a provincial and national framework.
2. Establish an independent procurement auditor responsible for the municipal sector in each province to enforce competitive procurement practices and handle complaints from suppliers. The municipal authority to exclude products and services from tenders must be abrogated.
3. Create an independent certification body in each province to determine which products and services meet municipal sector requirements. This will encourage the development of standardized products and services and drive down the price of municipal goods and services.
4. Reduce inter-provincial trade barriers and increase the number of suppliers available to municipalities by rolling out the Alberta-British Columbia Trade, Investment, and Labour Mobility Agreement (TILMA) across Canada.
Billions of dollars are pouring into municipalities in GST rebates; gas tax rebates and for infrastructure renewal from federal and provincial coffers without adequate oversight, controls and transparency. Reforms by the provincial government are on their back burner. Many of the people in provincial government today were formerly on council or were mayors and have no wish to change a system they were comfortable with.
That is not good enough.
I will be voting no to all future referendum requests for tax dollars unless they carry the caveat of transparency, accountability and responsibility with a ceiling on expenditure.