October 26th, 2020

City council should think harder about revenues, expenses


By Letter to the Editor on November 21, 2019.

The mayor informed us in a recent Herald column that the latest property tax increase is the lowest in 20 years. >That’s probably true, particularly considering property taxes in Lethbridge have increased at a rate far outstripping population growth and inflation for most of those 20. >But just how laudable an achievement is this?

A considerable amount of what would otherwise be tax-supported spending at city hall is in fact buried in local utility bills. >The operating budget describes these cost-shuffles as “interdepartmental transfers.” For quite some time now, for example, around 40 per cent of the expenses of the mayor’s office (wages, benefits, operating costs, etc.) have been transferred out to other departments (essentially the utilities). >This percentage has been pretty steady but creeping up over the years – a little under 40 per cent eight to 10 years ago, to around 41.2 per cent each of the current budget cycle. >Other departments transfer their expenses out to the utilities also, too many to recount here.

But the more interesting measure is the effect on the utility budgets themselves. >Comparing the 2014 budget to the 2019 budget is instructive, and appalling. >In 2014 “interdepartmental transfers” increased the electric utility budget by 5.6 per cent over what it would have been without the transfers. >In 2019 “interdepartmental transfers” will add 10.9 per cent to the electric budget. >Put another way, the electric utility budget increased 21.1 per cent from 2014 to 2019; in the same time period, the “interdepartmental transfers” to the electric budget increased a whopping 126 per cent. >Surely a councillor might ask a question or two about this state of affairs, but to my knowledge not one ever has.

This method of revenue generation is hardly unique to Lethbridge, though with these numbers one might think the City has more than mastered the concept. >But the Alberta Urban Municipalities Association and the City of Edmonton have repeatedly pointed out that raising municipal operating revenue through the device of utility rates is effectively regressive taxation. >So rather than address what looks like a spending problem, our council prefers to hit the poorest among us hardest, all the while saying (and believing?) that rates and fees for electricity, water, sewer, garbage and the like represent the unavoidable costs of those services.

These are policy choices, albeit ones councils present and past never appear to debate. >Rather than patting themselves on the back for what only >appears to be a relatively modest tax increase, perhaps they should be thinking harder about revenues and expenses.

Brett Babki

Director, Lethbridge Transparency Council

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snowman

Brett; you are correct but taxpayers do not follow City finance documents as you state they are not aware of for example $80 million borrowings on Leisure Centre with debt payments 3$million 2018 and $5 million thereafter for twenty-year term which is added to operating budget and property tax. The twenty year term exceeds City borrowing bylaw terms of 15 years on large projects.
The landfill debt on royalty buyout $6milion 2003 to 2023 4 years left on a payout, property tax.
I am pleased you are director, go get them.

biff

amazing how few responses this insightful and sharp letter is getting. bb provides us with intelligent and accurate insight into an angle as to how we are regularly thieved by admin and our puppet council, but no show of support or care. pathetic.