2021 Budget update

The issue of cost recovery was raised a few times in the November 30th budget discussion. This is an important issue for Council to consider. The issue came up in discussion of building permit fees. From the presentation of this department’s budget, it appears that building permit fees have been set to recover the direct costs of providing building permit services. It is encouraging to see that general tax dollars are not being used to subsidise the direct costs of building permit services.

One of the other major areas where cost recovery is of critical importance is for County-owned utility services. In assessing the 2021 operating budget, it would be very useful to know what the utility fee revenues from County-owned utility services are relative to the operating costs of these services, excluding general administrative overhead allocation. In the same way that building permit fees should be set to cover the direct costs of providing this service, one would hope that utility fees would meet the same standard. To the extent that details can be provided to confirm whether or not this is achieved in the budget, it would be very useful.

Another point that we would like to raise is that many of the cost saving initiatives in the 2021 budget appear to be the equivalent of deferred maintenance, pushing expenditures into future years. In evaluating the reasonableness of this, it would be very useful to understand potential incremental costs from such deferred expenditures. To the extent that the decisions only push an expenditure of, for example, $100, to next year where it will still cost $100, this may well be a reasonable stopgap measure. However, many deferred maintenance decisions result in the deterioration of the underlying asset and thereby cost far more than the deferred $100 in the future. Information on those potential higher future costs appears to have been omitted in the budget presentation. As a result, the prudence of some of these decisions has not been substantiated.