More Bad News.......
Yikes! How much more can Ottawa property-owners take ?
We learned this week that there's a cost overrun on refurbishing the Fairmount Avenue cop shop -- small change -- only $450,000.
Big dollars, however, will be involved when the pension plan which covers all municipal employees in Ontario increases mandatory contributions next year. The increases in contributions msde by both employees and employers are required to offset a shortfall of $1.5 in the primary plan run by the Ontario Municipal Employees' Retirement Services, known as OMERS. This shortfall is expected to grow to nearly $5 billion over the next four years. How could this happen ? Have municipal employers (including Ottawa city council) been asleep at the switch ?
The Municipal Employer Pension Centre of Ontario estimates all OMERS employers together would pay $51 annually for a 1% increase. The Ottawa Police Service alone is expecting to pay between $1 and $2 million more in pension contributions next year.
So before Ottawa's new council has had a chance to settle into their seats at city hall, they're faced with a situation which definitely will impact on the 2011 city budget. Puts mayoral candidate Jim Watson's goal of holding property tax increases to no more than a 2.5 % increase in jeopardy.
This can't go on. The next four years are going to be tough ones for the city. For all intents and purposes, the province is bankrupt and the feds have told their senior officials that there's no new money. If there's a federal election and Steven Harper is re-elected with a majority (even a slim one) watch out. Cuts will come -- maybe not as drastic as those imposed by governments in the UK and Europe -- but cutbacks and layoffs in the federal service don't bode well for Ottawa's municipal tax base, not to mention cutbacks and layoffs of provincial employees working in this area, and hospital staff as everyone tries to balance budgets and do more with less.
Citizen Ellie lives in a city ward that's number 2 in terms of being home to the city's older residents. She's starting to hear people who are coming up for retirement talk about how they're planning to move as Ottawa is becoming too expensive. She hears pensioners talk about how tough it is to make ends meet and while they'd like to stay in the homes they've lived in all their lives, it's time to go somewhere else where the cost of living (namely property taxes and municipal service charges) is cheaper. And that doesn't mean downsizing from a house to a condo in the city. It means crossing the river to Gatineau, or heading to small town Ontario.
Meanwhile the union representing city employees is paying for expensive prime time television ads touting how valuable their members' work is --a thinly-veiled tactic designed to scare voters into thinking all those services will disappear if they elect a cost-conscious mayor and council. It would be interesting to know just how many on the city's payroll (including police and fire departments) actually live within the city limits and pay city taxes; how many live in less expensive locations such as Gatineau, Embrun, Rockland, Smith's Falls, Carleton Place etc.; and how this affects attitudes of those who spend our municipal tax dollars.
There's a growing resentment among private sector workers who pay for public sector salaries, benefits and pension plans through their taxes. Private sector workers resent the fact that their public sector counterparts have, so far, escaped all the pain of the recession. Prime Minister Harper recognizes this as does Ontario's Finance Minister Dwight Duncan when they freeze their employees' wages for two years. They know that the louder public servants and their unions whine, cry and wallow in self-pity, the greater the anger among private sector workers. There's no sympathy out there for public sector workers and their unions.
That resentment is filtering down to the municipal level. And it will have an impact on the October 25 election despite all those TV ads sponsored by CUPE.
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