4 ways the 2018 budget might be fake

It was certainly an attention-grabbing sound bite.

"It's a fake budget with fake numbers," Coun. Rick Chiarelli told reporters last month, even before the 2018 draft budget was officially tabled.

Chiarelli was quoted everywhere — which was, of course, the point of such an incendiary and preliminary comment — and came under fire from Mayor Jim Watson for running to the media before even reading the budget.

But that was weeks ago. 

Councillors have now pored over the budget and asked questions at committee meetings. Some of them have doubts about the premise of a number of budget items, contending that the city is projecting to spend or to collect amounts that are unrealistic.

Or, to put it another way, fake.

This won't be the first year the city has engaged in some optimistic budgeting. As reported by the CBC, the city has spent $60 million more than it budgeted over the last four years. However, this appears to be the first time in this term that councillors have decided to be more vocal about the issue. 

Here are at least four areas that need a sober second look either by or on Wednesday, when the council will vote on the 2018 budget.

1. Transit

Like some other cities, Ottawa has seen a decline in the number of people using public transit.

Whether it's construction, unsatisfactory service or the introduction of Uber, fewer people rode OC Transpo this year. In fact, the transit operation is forecasting $8.5 million less in revenue for 2017 than expected.

And yet, for 2018, the city is counting on taking in $11.2 million more than OC Transpo expects to make in 2017.

Where will this money come from?

Coun. Tobi Nussbaum would like to know.

When Nussbaum asked about those figures at transit commission last week, he was told that $4.6 million was coming from a forthcoming 2.5 per cent fare hike.

Another $1.8 million could be raised by the expected 0.5 per cent net increase in ridership in 2018 — and that includes a boost expected from the LRT coming online sometime in the second half of next year.

Those two increases, Nussbaum was told, accounted for $6.4 million — which would still be about $5 million short.

"My question is, 'Where is that $5 million that we're counting on in our draft budget, where is it going to come from?'" said the councillor.

So far, the city hasn't been able to provide either Nussbaum or CBC News an answer.

"I would love to be told there was $5 million coming from a source that I wasn't aware of," said Nussbaum. "But if that doesn't happen, we need to give those numbers real scrutiny."

2. Roads, potholes and snow clearing

In his budget speech, Watson reeled off a number of increases in spending on roads. There would be more for potholes! More for resurfacing! More for snow removal!

But here's what he doesn't say: many of the planned increases in spending for 2018 are only increases when compared to what was budgeted for 2017.

In fact, the $116.9 million in the 2018 budget set aside for "road services" is actually almost $9 million less than what the city expects to spend overall in 2017 — never mind in the three years before that.

Indeed, in 2014, the city spent $121 million on road services.

At least eight councillors have found this budgeting practice problematic. Last Thursday, they publicized a motion they plan to support at council this week to add an additional 0.5 per cent to the planned tax increase of 2 per cent. The increase would raise about $8 million and would be directed to infrastructure.

It's doubtful the motion will pass, but it is significant that more than a third of councillors have said they've heard so many complaints about the condition of the roads that they plan to vote to increase taxes — in an election year.

"We want to put some reality into the budget," said Chiarelli, who supports the motion.

"We have people telling us the roads are crumbling. They're in the worst condition people have seen in decades, and we need to do something."

3. Long-term care homes

This year the city is spending $67 million on its four long-term care homes, almost $2 million more than planned.

Next year, the city plans to spend about $65.8 million — about $1 million less than 2017, despite revelations of disturbing instances of abuse at some of those homes.

The city has had to launch town halls to hear from the homes' clients and their families, as well as appoint a third-party investigator to look into how the homes are run.

The city says costs are being reduced due to "strategies" to decrease sick leave. 

The $1-million difference between this year's spending and the budget for next year isn't huge in the big scheme of things, but considering the problems in this department, it seems unlikely the city will end up spending less.

The line item may also be indicative of the budget's somewhat aspirational nature.

4. Recreational rentals

We may be a hockey-mad country, but that doesn't appear to translate to local arenas.

The fees collected by the city's recreation services — which includes arena fees, but other fees as well — came to $46.6 million in 2017, $4.7 million short of what was budgeted.

Are people going to suddenly start playing more hockey?- Coun. Rick Chiarelli

And yet, for 2018, the city is budgeting $51.35 million for fees and services. There appears to be no reason why taxpayers should expect to magically make more money in this department than this year.

"Are people going to suddenly start playing more hockey?" quipped Chiarelli.

All arena fees are rising by 5.6 per cent for the second year in a row, while most other fees are increasing by two per cent. While fee increases bring in more money from paying customers, they can also keep other budget-conscious customers away.

Staff say their 2017 revenue targets weren't hit because of "unplanned or planned occurrences."

The city also lost money because it was no longer allowed to provide before-and-after-school care to children under six — a restriction that will continue next year.

However, the city did say it expects to make $295,000 from the recently opened community centre component of the ​François Dupuis Recreation Centre.