This week and next, the corporate services committee and then full council will discuss the city's long-range financial outlook as a set-up to the 2003 budget debate. Councillors will focus on the council subcommittee pay-as-you-go report (discussed in last week's column) and the meatier Long Range Financial Plan (LRFP) document written by city staff.

But first things first. Last week's column incorrectly identified Captial ward councillor Clive Doucet as being one of the naysayers to Councillor Rick Chiarelli's pay-as-you-go report. I confused him with councillor Legendre and regret the error that Mr. Doucet was quick to point out

Now, for readers who were also upset that I was giving a few councillors "too much" credit for their fiscally responsible inclinations, have no fear. Savvy voters know that next year is an election year so late converts to the side of fiscal discipline are to be expected. Voters are also attuned to the fact that council is now discussing pay-as-you-go after they recklessly spent as they went.

And what a spree it was. The staff report points to a $270 million capital funding gap by 2006 and depletion of the city's reserves over the same period if not sooner. So last week's caution about a double-digit tax hike as early as 2004 is not conjecture, it is supported by the city's own doomsday projections.

The LRFP waxes eloquently about the national urban debate now underway, cities being short-changed by senior orders of government and stuck in a constitutional straightjacket, 21st century economic growth paradigms amongst its other policy wonk discussions. These are prescient and known facts.

Yet it leaves the reader with the impression that the city has a problem, sincerely hoping other levels of government will solve. As much as city manager Bruce Thom says we don't want to "drift into a solution", this is the impression left with the reader after reading the executive summary, cycling through the PowerPoint charts or the full LRFP document.

The key question taxpayers should be asking is what happened to the reserves and the so-called savings from amalgamation? Nepean, Gloucester and Cumberland all entered the new city with positive reserves. The old city of Ottawa late in Jackie Holzman's tenure and under Jim Watson started to pay down debt and the region from 1991 to 1997 paid down debt and added close to $100 million to its reserves. Where did all the money go?

As for amalgamation savings and the so-called 10% tax cut, remember that assessment growth helped with this sleight-of-hand rate adjustment. Then we have the fact that more employees work for the city today than the previous 12 regimes and the city budget is now $100 million above the combination of old municipalities. Yikes!

The LRFP points to infrastructure investments by national governments in Europe and the United States as a model for Canada to follow. Fair enough. But European and American cities also have been much more creative in securing private sector partners for transit operations, recreation centres and even water and waste water management.

Which brings us to what Ottawa can do to solve its financial woes. First, it should fast-track public-private partnership (P3) efforts and identify several capital projects for consideration in build-own-operate-and transfer (BOOT) schemes where the private sector assumes capital risk and the city is on the hook for an annual operating stipend until the assets are transferred to the city.

Next, a rigorous program review must be undertaken of all city departments and programs to identify efficiencies and question whether programs are meeting desired objectives. If not, they should be modified, outsourced (either to a private firm or employee takeover group) or scrapped. Indeed, the city should put the majority of its service offerings to the competitive test.

Finally a more comprehensive review of the capital budget should be undertaken. For example, some $30 million has been allocated for smart growth transit initiatives in 2004. What's this for? And let's not forget the $10 million promise come $30 million plus O-train to nowhere with another $33.4 million in budgeted expenditures to 2006 and a further $29.2 million from 2007 to 2011.

These tough measures must be taken to put Ottawa back on a more stable financial footing. Section 224(e) of the Municipal Act notes the role of council is "to maintain the financial integrity of the municipality." By deficit financing the city by raiding the reserves council has in effect breached the Act. This is poor fiscal management, not good government.