Friendly Update, City Hall: When A Record Road Repair Investment Is A Budget Cut

Click me for more city hall stories…CORRECTION: Everything I wrote below is WRONG WRONG WRONG. I explain and apologize here.

Phew! Good thing I’m in Malta and not in Regina otherwise I might have felt compelled to cover the city’s 2015 budget. It was passed last Monday and I wasn’t there to watch. I don’t even remember what I was doing instead but I can assure you, it was a lot more fun than sitting in Henry Baker Hall for five hours.

So, sorry, Regina. No live-tweeting a read-through of the budget this year. No getting cranky about property taxes.

Oh sure, I downloaded the city budget. Force of habit. But I’m not going to read it. Not going to think about it. Not going to write about it.

But if I was going to… I’d probably start by taking a look at a claim that’s being repeated in a lot of the budget coverage: This year’s record investment in road repairs. The inadequacy of the road renewal budget is something we’ve been writing about for years so it’s something I like to keep an eye on. And, from what I’m reading, it sounds like city hall is taking a historic step towards remedying this enduring problem.

See! Here it is, mentioned on page two of the city’s 2015 Budget Highlights document:

budget2015roadrecord

Sorry. Got a little excited there. Left my notes in place.

Of course, if I was covering the 2015 city budget and not sitting outside drinking a Cisk beer on a clear Maltese night, I might read that line in the Highlights document and think, “$18 million on road repair is a record? Gosh, that doesn’t sound quite right.” And then I might go through my collection of old budgets.

Good thing I deleted all my Prairie Dog files before I came here!

Oh shit! Look at that! Seems I forgot to kill the “Old Regina Budgets” folder. Wonder what the 2014 Budget Highlights document says?

budget2014roadrecord

Would you look at that. Seems they’re claiming 2015’s road repair investment of $18 million is a record even though 2014’s investment was $1.7 million larger.

What could be going on here? Even the creators of infographics as hilariously bad as this one couldn’t screw up their list of budget hot facts this badly, could they?

Well, if you’d read the budget documents — which, I told you, I totally wouldn’t do — you’d find that no, technically they didn’t. There’s more to the road renewal budget than that line would indicate.

Here. Have another look at the 2015 Budget Highlights document (with updated notes by me):

budget2015newroadrecord

So if you add the line announcing a record investment in road repairs to the preceding line announcing an investment in local roads you find this year’s highlighted road renewal budget is $19.8 million.

And that beats last year’s road renewal budget by a whopping $100 THOUSAND dollars!!

Gosh. That’s like beating the world record for running backwards by a hundredth of a second.

But, hey, can I really be sarcastic about a feat like this? I haven’t beaten any records lately (unless there’s one for cans of Cisk consumed while reading a Regina municipal budget). Meanwhile, the city is actually and truly beating the record for investment in road renewal this year. And as we all know, beating a record is a Very Impressive Thing.

Except when it’s not.

See, if you, unlike me, had started reading the Budget Summary, you might have noticed this line from page 28…

municipalpriceindex2015

Hunh. Seems the inflation rate that the city is facing this year is 3.34%. Wonder how that $100 THOUSAND increase to the road renewal budget stacks up against that? Time for more maths.

Seems going from $19.7 million in 2014 to $19.8 million in 2015 is a 0.5% budget increase.

And that means 2015’s record investment in road renewal is effectively a 2.7% DECREASE to the road renewal budget.

Suddenly, that record-breaking investment is looking less impressive. Of course, that’s how new records often work. Here’s a little graph to illustrate…

budget2015changegraph

With the exception of 2010, every year’s investment in road renewal (the green line) has been a “record investment.” Yipee.

However, the increase to the road renewal budget (the blue line) has been all over the place. And generally, it’s been trending downward-ish since 2008. That was when the road renewal budget received a record boost of $3 million. (Based on the numbers I have, that is.)

And, it’s also worth noting that, since 2007, the road renewal budget has grown, on average, by $1.1 million. This year’s $100 thousand increase falls WAAAAAAAYYYYY short of that. And even last year’s big increase of $1.6 million doesn’t look so outstanding in context. Sure, the boost was quite a bit above the average, but that just offsets years like 2009 and 2012 that saw bumps that were well below the average, or years like 2010 where the budget actually dropped in non-inflation-adjusted numbers.

Of course, despite all this, some people will look at the 2015 Budget Highlight document and tell me, “So what? Sure, the road renewal budget may technically be going down if you consider details like ‘inflation.’ The important thing is the city is DEDICATING an annual one per cent mill rate increase to renewing residential roads. THAT’S big news.”

Yeah, that one per cent mill rate for local roads sure sounds like new money, doesn’t it? And the fact that council has promised to ear mark that one per cent for five years, sure makes it sound like the road maintenance department is finally getting that long-term guarantee of additional funding like they asked for at last year’s budget meeting, eh?

It sure sounds like all that… Except that’s not the whole story.

Technically, this year’s $1.8 million for local roads is an extension of a program that was started last year when council voted to devote $1.7 million — a one per cent mill rate hike — towards fixing local roads. So while it looks like they’re adding $1.8 million to the annual local road renewal budget, they’re really only increasing the budget by that magic $100 THOUSAND.

And we already know how impressive that looks when it’s compared to the inflation rate.

Plus, the main budget for road maintenance — most of which will go towards taking care of feeder roads and other priority streets — is only going to be $18 million. That’s $100 THOUSAND less than the “record” road renewal budget for 2013. And that’s not accounting for inflation.

So, while council is making a big deal of how they’re prioritizing local road renewal — and how, brave heroes that they are, they’re willing raise property taxes to do it — they’re doing so by holding the core maintenance budget at below 2013 levels.

And meanwhile, in other city council news, they’ve also put the Local Improvement Program on ice. That was the program by which the city fixed sidewalks by charging property owners for the work. Whether you think that system was fair or not, at the end of the day, getting rid of it means that for the time being road maintenance is going to be even more starved for cash.

Call me crazy, but from where I’m sitting — which, did I mention is in Malta? — this is not how you make a landmark commitment to road renewal. And this is not how you make record investments in solving the infrastructure gap.

But it is a good example of how you can shuffle numbers around to make it look like you are. And I’m thinking that despite all this talk about taking potholes seriously, we’re not going to see a huge improvement in our streets and sidewalks any time soon.

Well, good thing I’m in Malta this year and TOTALLY NOT covering the 2015 budget. This is the kind of stuff that could make a guy all cranky.

Have a happy holiday, Regina. I’ll drink a Cisk for you.

Author: Paul Dechene

Paul Dechene is 5'10'' tall and he was born in a place. He's not there now. He's sitting in front of his computer writing his bio for this blog. He has a song stuck in his head. It's "Girl From Ipanema", thanks for asking. You can follow Paul on Twitter at @pauldechene and get live updates during city council meetings and other city events at @PDcityhall.

4 thoughts on “Friendly Update, City Hall: When A Record Road Repair Investment Is A Budget Cut”

  1. I always thought the 1% per year was supposed to be cumulative over the 5 years meaning that we would see a minimum 1% increase (of taxation revenue) over the previous year’s investment. After 5 years that would have seen the annual roadway budget increase by about $10M. Guess that is not the way it ‘works’…

    Not being a math wiz, can you Paul (or someone you are related to) calculate the value of our current roadway budget in terms of buying power, or relationship to the Municipal Price Index since say 2008? Seems like we are actually investing less (as a percentage of overall revenues?) each year, not more as some seem to be trying to spin it…

    Please have a Cisk for me.

  2. On your graph I misread “budget change” as “budget cyanide”. Can’t decide which version I prefer. #yqrcc #drinksthekoolaid

  3. That’s a really good question, Cranky. So I tried to do the maths. On my own, even!

    So, if you assume a 3.3% Municipal Price Index for every year (which I suspect you probably can’t but this is just a back of the napkin kinda calculation) then the actual budget for road repairs since 2007 is 38% better off than if it had just been indexed to inflation (the MPI, that is). If you take it from 2008, then the budget is doing 12.5% better than the inflation rate.

    Just based on the state the roads and sidewalks though it’s pretty obvious that the road renewal budget started out grotesquely inadequate so just beating inflation by 12% or 38% over 7 years isn’t cutting it.

    Also, I suspect just looking at the MPI still doesn’t tell the whole story. Population growth and road network expansion are other pressures on the budget.

    Also, and this can’t be stressed enough: I could’ve done the math completely wrong. My math support network isn’t around right now to check over my numbers.

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