As much as council's budget shenanigans have garnered a fair share of ink, one of the most interesting aspects of the 2002 Draft Budget Estimates Overview document given to council last month was city manager Bruce Thom's opening letter to council found right at the beginning of this document. On first read, Mr. Thom's letter appears to be the usual "Dear Council" fare, but with a second look, some key and stark messages are evident when one reads between the lines.

Paragraph 2 reads "this draft budget meets your directions and, if approved as recommended, maintains the 10% tax rate cut for 2001 (which budget included year 1 amalgamation savings of $26.6 million) and includes additional 2002 amalgamation savings of $26.7 million while maintaining service levels for residents."

Note the use of language. City staff has done their job in responding to council's directives. However, Mr. Thom makes it very clear that the tax cut is a "10% tax rate cut" not a 10% property tax cut that many councillors and the mayor like to throw out there in debate and in the general media. While the choice of words may be trivial, the difference between the two is substantive in terms of hundreds of dollars for each assessed property in our city.

Paragraph 3 reads, "… administration has been mindful of the impacts of its recommendations on future years. Care has been taken to identify pressures and challenges facing the City that remain to be solved over time." Translation: yes we've protected the tax rate cut and found amalgamation saving but boys and girls; we've got some big problems on the horizon.

To be fair, the city manager notes "these pressures and challenges result in part from the off-loading of major responsibilities from the federal and provincial governments to municipalities without also passing on the stable, base-line capital and operating funding for these programs, and the restrictions placed on our ability to fund the requirements of growth and the increased demand for service."

Indeed, yours truly does not discount the inequity in revenue generating capacity for Canadian cities vis-à-vis the senior orders of government that has been raised by the Federation of Canadian Municipalities (FCM) and the five big-city mayors. And yes, Mayor Chiarelli has also been articulate, eloquent and effective when speaking to this issue.

But here's the problem. The Mayor and his colleagues who wear the chain of office across the country are one-trick ponies in this regard. Even if Ottawa and provincial governments cede room on gas taxes and fast-track much needed municipal infrastructure programs, this is probably five years away if not more. So where is Plan B for the interim period?

Note that the city manager's letter says that the funding challenges result "in part from the off-loading" blah, blah, and blah. So where does the rest of this funding challenge come from? The answer is found a few paragraphs later.

It reads "reducing expenditures was not enough to meet the fiscal challenges; therefore, other short-term financial strategies were also undertaken in varying degrees in Ottawa area municipalities, and indeed, across the country." Thom goes on to note, "these and other strategies included insufficiently funding infrastructure maintenance, putting off needed infrastructure, the use of one-time revenues for on-going issues, relying on optimistic revenue projections, charging operating costs to capital, conservatively estimating operating costs, and eliminating OMERS pension premiums during the contribution holiday."

Well that's a mouthful. Translation: All Ottawa area municipalities and the RMOC, like cities across the country, engaged in, let's just say, creative, dubious and semi-transparent (read: Opaque) accounting obfuscation practices … including the much ballyhooed debt-free Nepean and the former City of Gloucester (sorry Claudette, I call ‘em like I see ‘em, but perhaps we can debate this point on your radio or TV show).

Many municipalities used their newfound cash from their OMERS (the municipal employees retirement fund) contribution holiday instead of banking it for the rainy days that have now come. Others consistently overestimated revenues and underestimated expenses … hoping assessment growth would mitigate their spendthrift ways. Still other cities in our region hid human resources costs in their capital budgets.

This is all to say and to answer my earlier question: Council has no Plan B because predecessor councils never had a plan B. And the criticism is even more stinging. The letter states, "all of these short-term solutions were inherited by the new City within the tax and rate bases." Translation: The new City is trying to straighten out its books and account for things more honestly. Ouch!

However, the city manager - and by extraction, senior staff - save his/their best shot for last. In the concluding paragraphs of Mr. Thom's letter, the city manager notes that Council's directives were followed but staff "had to continue to draw down the City's reserves."

The letter goes on to state, "… as Council considers this budget and its recommendations, it should be noted that any additional projects will either have to be funded by substitution, or deferred until the 2003 budget is struck. A capital funding gap has been identified when compared to funding sources. Even assuming the City receives the identified partnership funding, this gap totals a minimum of $345 million for the five years to 2006."

In plain speak, this is really a blatant message to council: Get your official plan done, figure out how you plan to manage and fund our growth and for goodness sake, please devise some policy with respect to budget decisions concerning the use and requisite replenishment of our reserves.

Sadly, the 2002 budget will pass but council should embark on a policy and priority exercise immediately afterward so we don't repeat this raid the bank, bust the reserves approach next year in the lead up to the 2003 fall election cycle. Ottawa taxpayers deserve no less and if I can be so bold to finish reading between the lines, on this point, it seems yours truly and the City Manager agree.