While Pelham Town Council Zoom meetings do not exactly make for riveting television, viewers watching closely last Monday evening, Dec. 7, would have seen a motion by Councillor Hildebrandt, supported by Councillors Haun and Stewart, to defer consideration of the Town’s 2021 capital budget, and the 2021 water budget, until an unspecified date in January. All right, it’s not a cliffhanger moment from The Crown or The Big Bang Theory, but stick with me.
The rationale offered by Hildebrandt was that he wanted to know how much COVID-related funding the Town would be receiving from the provincial and federal governments. At issue is a potential $260,000, which, if the Town doesn’t receive it, would lead to an additional 1.7% tax increase.
Remember that Pelham has three budgets: capital (long-term, big-ticket items), operating (day-to-day expenses), and water/wastewater (as it sounds).
Already anticipating this COVID funding uncertainty, council had previously decided not to pass the operating budget until 2021. No harm, no foul.
The capital and water rate budgets, on the other hand, were proceeding as planned, because they are separate—their increases, or lack of, do not connect to the operating budget.
The Town attempts to pass the capital budget as soon as possible, in order to be early at the table with contractors eager to bid on big-ticket items. It’s widely understood that contractors try to ensure that they have at least a minimum amount of work for the following year. Farther into the new year, prices to municipalities rise as construction companies become less available and their equipment is already tied up. So: smart municipalities pass their capital budgets early and get those tenders out fast for bids.
Knowing this, council had agreed to a timeline. Yet Hildebrandt’s motion sought to undo the mutual understanding that existed between the two factions that we have seen council divide itself into—call them the Pragmatics (Mayor Junkin, Councillors Wink and Olson), vs. the Dogmatics (Councillors Haun, Hildebrandt, and Stewart).
The difference? Pragmatics see the larger picture, approaching issues sensibly, with the practical goal of achieving what’s reasonably possible given the cards they’ve been dealt. Dogmatics, on the other hand, rigidly adhere to beliefs that don’t necessarily match what’s factually true—often saying they “feel” rather than “think”— usually to the detriment of consensus and productive outcomes. (In short, if you want to get things done—on council, on a condo board, in a scout troop— Pragmatics are your better option.)
As if changing budget horses midstream wasn’t enough of a problem, the motion morphed during the debate and was headed towards council actually defeating its own capital and water budgets, which, to be clear, had previously been unanimously supported.
Unfortunately, at least three members clearly do not understand the function of the budgets which they are charged with passing on behalf of their community.
This would have created a procedural problem under parliamentary rules. If council passes a motion, then turns around and defeats it, a so-called “super majority” of councillors is then required to reinstate the original motion. It’s messy, time-consuming, and usually a sign of political dysfunction.
Asked by the Voice if he had ever seen an agreed budget defeated by a municipal council, CAO David Cribbs responded that he was “happy that the issue had been resolved without having to go to that extreme.”
In fact, the shocked reactions of the CAO, the Treasurer and the Clerk when Hildebrandt made his motion were testimony to their being caught flat-footed by the move. Cribbs explained to council that the water budget wasn’t connected to taxation whatsoever, and reminded councillors that they had endorsed a four-year plan to bring our rates in line with other municipalities (the Town has the lowest water rates in Niagara, a mixed blessing) to, among other things, ensure a basic level of investment in water safety. Our mains aren’t getting any younger, and some maintenance projects have been repeatedly deferred.
After much debate, the portion of the motion related to the water budget was withdrawn.
While the average resident can be forgiven for not knowing or caring about the Byzantine world of accounting, the members of council who are now working on their third budget since taking office really should understand the difference between capital spending, the water budget (which isn’t a tax at all, but rather a fee for service) and the operating budget.
This was part of their new councillor training, and this council has already passed budgets for 2019 and 2020, so it can no longer argue that it is inexperienced. Unfortunately, at least three members clearly do not understand the function of the budgets which they are charged with passing on behalf of their community.
As Councillor Wink attempted to explain, and as the Treasurer confirmed, the capital budget—derived of a combination of grants from upper government, gas tax, development charge financing and long-term debt—does not impact property taxes, except in the very long-term.
Therefore, this budget too should have been passed, having been considered by council at a special-purpose meeting, having been reviewed by the Finance and Audit Committee, and also having been the subject of a public review and consultation meeting. Council has had possession of the draft capital budget for roughly two months and made a number of changes to it, both adding and removing items. The budget now reflects the preferences and priorities of council, so deferring its passage has only managed to cost the Town the opportunity to obtain favourable pricing on its tenders from contractors.
How do we wrap our heads around this? Be careful—whiplash ahead.
The Dogmatics want yet again to defer making a difficult decision, and seem not to appreciate the advice of the Finance and Audit Committee—which has the benefit of two members of the public, both Certified Professional Accountants—nor are they willing to heed the advice of the Town Treasurer, who is also a CPA, nor heed the advice of retired bank manager and financial professional John Wink, nor heed the advice of the retired accountant Wayne Olson. There is much not-heeding happening, and for no sensible reason.
When such a combination of professionals takes a consistent view on how the Town’s budgeting works, it is incredible, even indefensible, that Hildebrandt, Haun, and Stewart, the three councillors with the least financial experience and acumen, would bring a motion to defeat an agreed-upon process, and create chaos for the administration in this year, of all years. ◆
