To the Editor,
Two recent items and the editorial of Jan. 13 (Inefficiencies not city staff’s) convey the impression that the News Bulletin believes there’s nothing wrong with property taxation levels in Nanaimo and nothing wrong with management’s stewardship of city coffers.
Ergo there’s no need for an independent spending review of the kind proposed by Coun. Jim Kipp. The basis of this judgement? According to press reports, city manager Al Kenning reviewed various expenditure areas and found no room for further savings.
Unfortunately, we have no idea what was involved in his review other than the conclusion that all hands are working at full capacity and, as far as tax rates are concerned, our middle of the pack status provincially means we are not out of line.
This assessment should not go unchallenged.
First, city hall has for years put out the same message about taxation levels. But it is meaningless to compare Nanaimo to all other municipalities in the province because many less well off and/or smaller communities have higher tax rates calculated on a lower assessment base – resulting in comparatively lower tax bills despite higher rates of taxation.
As the Federation of Independent Business has shown, comparisons are only meaningful between and among municipalities of similar populations and financial capacities.
Nanaimo has long been one of the tax leaders within the most appropriate comparison group, i.e., the largest 15 municipalities, which is far from comforting news for a community of many low-income earners and seniors living on fixed incomes, not to mention small businesses which are unable to treat property tax as a flow-through cost.
Second, the method by which senior management is paid fairly begs for reform.
What is known as the Hay system is used in Nanaimo and many other Canadian municipalities. Under it, the city’s population size rather than its financial capacity drives payroll decisions. Because of Nanaimo’s population growth, the Hay system virtually guarantees generous and regular salary increases for senior staffers no matter what happens in the local economy or how well they perform.
Flawed though this system may be, several Canadian municipalities responded to the recession by freezing salaries or staff complements or both, something that appears to have escaped city hall’s, as well as the News Bulletin’s notice.
Third, given its track record, we have reason to doubt the city’s capabilities when it comes to financial management.
For example, just about everything claimed by officialdom on behalf of the conference centre project at the time of the referendum proved to be wrong. Indeed, it has been a financial disaster – one that was readily foreseeable because a highly regarded construction risk assessment expert warned at the time that the city would proceed “at its peril.” His advice was ignored rather than taken to heart.
Kipp’s proposal will continue to have a great deal of merit. I congratulate him for putting the idea of a core service review forward and urge him and councillors who supported him to return to this theme in the November election.
Eric Ricker
Nanaimo
What do you think? Give us your comments by fax at 250-753-0788 or by e-mail: editor@nanaimobulletin.com. Be sure to spell out your first and last names.