Abracadabra, hocus pocus, the originally $113 million then $25 million budget deficit (if not more, as reported in last Saturday's column) has magically vanished. That's right, we now have word out of city hall that staff have drafted a budget document within the confines of the direction set by council.

Of course you will recall that council instructed staff to draft a budget that did not affect service levels, did not raise taxes and captures amalgamation savings of $22.5 million.

Come February 13th we will all be able to have a gander at this piece of financial wizardry. But in fairness to city manager Bruce Thom and his team, it won't be an airtight document. It will be based on a variety of revenue and planning assumptions. And then councillors will start dissecting the document to cut here or add their pet project of budget line item there.

And when it comes to no tax hikes, well let's just say keeping this promise all depends on how one defines a tax.

Do you believe that OC Transpo fares are a tax? If you do, get ready for a tax hike because fares will surely go up. Even though council delayed this decision early this month, it is sure to come back to the debate table. Non-transpo riding property taxpayers already subsidize this service so making transit riders pay a little more is really not a bad thing. Especially when one considers the impact of increased fuel costs, wear and tear on the fleet and the need for capital replacements.

Moving along, do you think increasing water charges constitute a tax hike? Several reports estimate that water bills for an average house could jump by $70 this year. Granted, some of this hike is a function of post-Walkerton changes, but not all of it.

Do you want to park downtown on the street or in a city lot? Well get out your credit card, because this will probably cost more as well. Of course it's not a tax increase, rather it's a fee adjustment. Yeah right!

And you can rest assured that rates for community programs, arena time, and a host of other city "services" will probably have recommendations to be hiked this year.

This is what staff has been asked to do. Present a balanced budget and the assumptions and ways to get there. Unfortunately staff have not be tasked to present a budget which identifies core and non-core city services. This would require real leadership and vision and save for a few councillors, this is sorely lacking on council.

So let's, just for a moment, try to do this and identify some targets for alternate service delivery (ASD).

How about recreation centres and services? Surely a private company or community agency could deliver programs if not maintenance and service is properly equipped?

What about transit? Wouldn't it be ideal to set some service standards in suburban areas and let private companies innovate on route structures and schedules? And their performance could be benchmarked against the public side of the shop. We could go further and offer a small fee to the private company and have any bonus they earn be a function of passenger satisfaction and increased ridership. Even better, increases in farebox revenues could be split between the contractor and city.

Such an arrangement could represent the ultimate win-win where the profit motive and public service motive coincide and intersect.

Now before anyone accuses yours truly of going on a union-busting binge, all services identified for outsourcing or ASD must allow in-house teams to compete for their jobs. Indeed when the NCC went through this exercise a few years back, in six of the eight service categories, in-house teams or consortiums won by putting together a superior package offering better value for dollar.

And this does make a lot of sense. These folks have the technical expertise, history and determination to do the job right. Often it's merely the current management structure or collective agreements that hinder them from performing better. Putting many city services to the competitive test would be positive for the city's bottom line and along with a zero-based budgeting exercise (as identified last week), we could really get big bang for our property tax buck.

But then again, staff has not been given this direction and there doesn't seem to be any sort of collective will on council to move in this direction - pardon the awkward pun - anytime soon.

So there you have it dear ratepayer, this year's budget exercise will be one of angst, bickering and our elected ward bosses trading back and forth at city hall. But if you're looking for financial vision, look again.

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A small correction is in order. In a previous column I noted that Edmonton city council raised property taxes by 16% over four year's during Bruce Thom's tenure as CAO. The media sources that this information was taken from only told part of the story.

In actual fact taxes went up 7% over two years as a result of a readjustment in tax rates, businesses were paying a ton and recouping a lot of money from re-assessment victories while some residential areas were undervalued.

This combined with other changes instituted under Thom's leadership resulted in Edmonton receiving fabulous bond ratings from the Canadian Bond Rating Service during his tenure in Edmonton. This columnist regrets any impression that may have been left that Mr. Thom couldn't rein in a free-spending council, that was not the intent of the column. And the CBRS rating attests to the sound management in Edmonton at the time.