Tuesday, February 05, 2008

Richter Report - Feb 5, 2008 – Response To Langley Advance Feb 1/08 Editorial (Submitted to Langley Advance Feb 2/08)

February 2, 2008

Dear Langley Advance Editor:

After reading your editorial of February 1, 2008 “Pick targets in tax hike fight” and Matthew Claxton’s article “Tax increase likely to pass vote” in the same issue (p.5), it was very apparent that some further clarification is needed.

This Mayor and Council has turned the annual budget into a game called “What Would You Cut?”. (Mark Burnett of TV’s Survivor fame could probably make a killing with this one).

The rules of the game are very simple. Put nine laymen in a room. Give them a 200+ page binder of detailed financial information and 2 hours to decide if they will support a 7+% tax increase. If they don’t like this number, then they have to go through the 200 pages of detailed financial information and identify what specific line items they would cut out.

This is where the backgrounds of the players make the game so much fun. A retired principal, an ex-journalist, an ex-city planner, a bus driver, a high school counsellor (to name a few) are so much more skilled at deciding which line items to take out of a 200+ page budget binder than are the senior managers who put the budget together and work with it on a fulltime basis. (Note: Based on 2006 actual Township expenditure numbers, the 9 laymen collectively made $268,000 per year while the 9 senior managers who put the budget together made $1,125,000).

In reading your editorial and article, I’m not quite sure what part of my argument you missed. If you have a financial advisor and you are paying them a premium to manage your money, do you go to a meeting with them and tell them what to do line by line? Likewise, does a jury tell the lawyers what the law is? If this were the case, why would we need financial managers or lawyers?

Council, like any government, is there to provide oversight. It’s not their job to say cut this line item or that one – that’s why they pay an Administrator $191,000 per year. It’s Council’s job to say: “a 7% tax increase is too high. Cost of Living or 2% is reasonable. Now you go figure out how you’re going to do it.”

Every introductory business course I’m aware of teaches that the Board of any organization sets policy and the Board hires a CEO to implement that policy. How the policy is implemented is the CEO’s jurisdiction, not the Board’s.

Council is a Board. They need to set a policy of tax restraint. It is not their job to tell the CEO/Administrator how to achieve that restraint but it is their job to ensure that the Administrator does achieve restraint.

Playing the “What Would You Cut?” game is a political and financial cop-out that works to the bureaucracy’s benefit not the taxpayers’. And if you don’t believe this, witness the escalating tax increases that Langley Township has suffered over the past nine years (0%, 3.5%, 0%, 1%, 3.75%, 3.2%, 4.95%, 4.92% and now 5.95%) while this mayor has been in office and allowed his councils to play this silly and expensive game.

You asked what items I would cut from the budget. My answer is that I have made many suggestions (none of which were seconded or passed) starting with getting an efficiency expert in to look over the budget. The Township has a $100 million per year budget. Even a 5% savings on this budget would be $5 Million per year or an 8.3% tax increase.

We could stop buying land high (Bedford House) and selling land low (Dickson Pit).

We could stop construction overruns (like the Grandstand) by putting tight construction controls in place or by waiting to build major projects after 2010.

We could start asking the Township’s front line staff where we could save money because they live this budget on a daily basis, and we could give them some sort of incentive for being innovative in saving money while best meeting customer needs. We could start this by asking the line staff: “What’s required, what’s efficient, what’s overkill, and what’s best practice?”.

I think assuming that everything the Township currently does is necessary and therefore should continue being funded is a wrong assumption, and it’s that assumption that has put us in the financial situation we’re currently in.

Yours truly,
Kim Richter
(604) 856-9788.
Kim Richter is a 3 term Langley Township Councillor was a management consultant and presently is a Professor of Business Management at Kwantlen Polytechnic University. Kim also hosts Langley Free Press and is the LFP Publisher. View her full bio and read all her LFP postings at this link. Editor-LFP

No comments:

Post a Comment