May 15 is a notable date on the municipal calendar: every year on this date, according to our community charter, our council must adopt a plan outlining the coming five years of municipal revenues and expenditures. We are currently in a period of public comment on this plan, as a draft was presented to council in late January. The municipality’s website offers a clear perspective in a series of responses to Frequently Asked Questions, as well as a copy of the plan itself. To get some further perspectives, I asked a number of islanders who have been involved in municipal politics and keep an eye on budgets and reports what stood out to them in this year’s 5-year plan.
Gordon Ganong, former chair of the Economic Development Committee offered kudos to council both for sticking to its promise to not increase taxes by more than 2.5%, and for allocating significant funds to road maintenance on the island.
For the average homeowner on Bowen, someone whose home is now valued at $960,000, the 2.5% increase will require them to hand over an extra $52 to the municipality this year. The municipality will collect a total of $4,51,466, an increase of $141,422 from taxes collected last year.
Ganong’s big concern is the size of future capital expenditures looming in the future. He points to the total expenditures for the three big new projects as a major problem: the new fire hall comes with a price tag of $2 million, a community centre is slated to cost $9,765,000 and a water treatment facility, is expected to cost $5.5 million. Major government grants are expected to cover significant portions of these, but Ganong believes the municipality will still be short $6 million.
“We’ll find ourselves starved of funds for other important projects, like the medical clinic and Snug Cove House,” says Ganong. “The island’s wealth donors are going to be relied upon for all of these projects, and that will ultimately suck money out of our local economy.”
He adds that debt has been a problem ever since the Municipality purchased community lands 11 years ago, and according to this latest financial plan, that debt does not seem to be going anywhere.
Developer and former councillor Wolfgang Duntz disagrees with Ganong on the appropriateness of the tax increase, because he also sees a shortage of funds in Bowen’s future.
“It’s an entirely political decision to keep the tax increase to 2.5%,” says Duntz. “Looking at our current infrastructure, that will just not give the municipality enough money to maintain it. Our road network is large compared to the size of our population. Also roads, hydro lines and trees do not mix well together - as the trees grown into the ditches, water-flow gets blocked and then when we get a frost the roads get really ruined.”
He says that if the municipality is planning to spend an average of $500,000 per year on road work (this is an estimate, as road work would come under public works and infrastructure which has a budget of more than $700,000 every year) that will not cover the costs of road maintenance.
Duntz also questions the funds allocated to trails, as the budget for trail improvements over the next five years totals $250,000.
“I’ve heard people complaining about a lack of trails but I’ve never heard people complain they are not maintained,” says Duntz. “Besides, how do we get any revenue out of them? We should be pouring money into the community lands to develop the things this we need, like housing, and then we could collect rent or maybe have some kind of public-private partnership to deal with them and make some money.”
He also adds his belief that the projected cost of the community centre is exorbitant.
“Five million would be generous,” he says.
Peter Frinton, also a former councillor, says the annual creation of a Five Year Financial plan is essentially a “bogus exercise.”
“Things always seem to be deferred to a future year,” he says. “This makes it look like we have more money now than we actually do. If you really want to see where the money goes and where it’s coming in you need to be looking at the annual reports. A simple but telling statistic is year over year actual revenue, plus the flip of that, expenditures. They rarely show the same fluctuations as the Five Year Plans. You will find the more you ask the more confusing it becomes.”
The Municipality will be holding an open house on Monday, February 27 to receive comments on this years draft Five Year Financial Plan.
