Given his strong support of Claude Doughty in the last election, one should not be surprised by Ron House’s letter in the Forester last week. But surely, given his past political service, he should understand the concept of executive responsibility and accountability. The buck stops with the mayor. He and his council must take ultimate responsibility for the financial affairs of the municipality.

I do agree with House when he says, “Research the situation for yourself. Look for the truth.” So let’s do just that with the 2008 budget passed by council last week. All figures I refer to come from the 2008 budget or related town documents.

Let’s start by comparing the 2008 budget with actual expenditures in 2007. The 2008 budget increases net operating expenses for the town by 13 per cent more than was spent in 2007. The operating expenditure has increased by $1,245,000. These figures can be found on Page 3, line 26 of the budget.

Now let’s look at the actual expenditures at the end of 2006, when this council took office and compare them with the operating expenses contained in the 2008 budget. By the end of its second year in office, this council will have increased the town’s net operating expense by an incredible 30.3 per cent!

You might well ask how this can be true when tax increases imposed by this council were 3.8 per cent in 2007 and will be 6.4 per cent this year. The answer is simple but frightening in terms of the overall financial health of Huntsville. Property taxation money has been moved from the capital budget (such as roads) to the operating budget. Money from reserves and other sources of finances have also been used to fund operating expenses. The bottom line is that expenditures have increased dramatically and are being financed in part, by weakening the financial stability and infrastructure of the municipality.

The town’s capital budget is financed by grants and transfers by other governments and from our own property taxes. In 2006, the town of Huntsville invested $2,030,000 from property tax revenue into the capital budget. The 2008 budget has reduced that figure to $1,523,000 (Page 47, line 97), effectively transferring the half-million dollar balance to help cover the current operating expenses of the town.

 The 2008 budget calls for the sale of the MTO building and transfers $187,000 from the sale into the operating budget. That money should have been used to reduce debt or increase reserves. Next year this source of revenue will be gone, the expenses will still be there and taxes must go up to provide this revenue.

The River Mill Park budget (Page 48) identifies $525,000 of 2008 revenue coming from three different reserves. Unbelievably the 2008 budget also recognizes that these funds were already transferred in 2006 and 2007. Doesn’t someone realize that you can’t spend the same funds twice? Either they plan to go back to those reserves for another $525,000 or they’re in for a big surprise at the end of the year.

The story this budget tells is one of dramatically increasing operating expenses. It clearly shows funds being taken from the capital budget and the MTO sale to pay for much of this increase. This budget will improve the town’s reserves from 2007 but they will still be lower than they were in 2006. That, Mr. House, is the truth.

In March, Councillor Zanetti was right when he said the town’s finances were grim. Unfortunately, this budget does nothing to improve them. Combine this budget with the deficit of 2007 and by the end of 2008 the town’s finances will be even worse. If we ignore what’s happening at the town hall, we do so at our own peril. Eventually the taxman comes calling.

Sven Miglin, M.B.A.,
Chair of Finance,
Huntsville town council, 2000-2006