Bummer caution: If you’re averse to depressing analysis I suggest you skip the following.
The core message in the Town of Hudson’s strategic plan is this: either the municipality incurs more debt to invest in revenue generating projects or risk being trapped in a death spiral of rising costs. A comparison of Hudson’s 2016 budget projections with the numbers contained in this past fall’s strategic plan suggest the beleaguered burg is stumbling into 2016 with the doomsday prophesy already well established.
The current administration announced its intention of initiating a strategic planning process shortly after taking power but it was going on two years before the results were presented to residents. Despite a lot of happy talk about contiguous trail networks, eco-trolleys and waterfront rests and boardwalks, it’s a sobering read, especially the last few pages. “Our do-nothing financial picture is not a good one,” the SP notes. Real costs, including a cumulative shortfall, are up $2.8 million in the last five years. Downloaded expenses for policing, public transit and regional government increase by 6% a year, twice the annual cost of living hike. At that rate, they’ll top $15 million by 2108. The crux of the problem: small towns like Hudson obtain almost all of their revenues from residential taxes. In Hudson, that figure is more than 95%. The struggling commercial core contributes 3.9%; agriculture and undeveloped land are together responsible for one percent.
Meanwhile, the evaluation on an average Hudson home continues to increase. From $450,000 in 2014 it’s expected to top $468,000 in 2016 and near $484,000 in 2017. The portion of the tax bill representing fixed costs is based on valuation. In other words, the more Hudson homes rise in value, the more their owners pay for the Surêté du Québec, public transit and overlapping layers of regional government. Valuations lag real-market prices, which the SP predicts could drop by 6%. According to the worst-case scenario, downloaded costs could increase by 10% annually, dragging the town deep into the red.
We come to local non-discretionary expenses such as infrastructure maintenance and essential services — roads, drinking water and sewers, waste management and fire protection. Then there’s the cost of servicing long-term debt. In Hudson’s case, the cost of interest and principal on the town’s accumulated debt ($32.5M in the SP, $27.3M in the 2016 budget) will average $511 on a $3,753 tax bill. That’s based on a mix of old debt at 3% and new debt at 4%. The SP’s worst-case scenario: a 6% annual increase. The SP included this ominous note: “The interest costs attached to this debt have been minimized through actions taken by the current administration over the past year, so that there is little flex in reducing the interest and repayment costs associated with this debt.”
The SP emphasizes cost-cutting as the primary tool to return Hudson to fiscal probity but I see no evidence of that in next year’s budget. The most glaring example: general administration. The SP supposed the 2016 cost of administering the municipality to be less than $1.5M. Next year’s budget adopted in mid-December — four months after the strategic plan was presented — earmarks more than $2.25M, a million-dollar jump. How about this past year? $1.44M budgeted, $2.06M spent. If this is how the Town of Hudson proposes to control costs, we may as well begin annexation negotiations with our neighbours while we still have room to negotiate.
My wish for 2016: transparency in the town we live in and pay taxes to. That includes posting every document, every presentation and the minutes of every meeting and discussion — both public and private — on the town website. Many of the figures I cite in this post have come from my own notes and documents still not publicly available. This was supposed to be a cleanup administration determined to lift the rock on the sordid past. I have yet to see evidence the coverup has ended.
8 thoughts on “What transparency?”
Municipalities that invest in projected revenue projects generally fail at them. The responsibility of a municipal government is to manage, build and maintain environment and infrastructure that attracts the types of investment we need.
The center of Hudson is pretty but obviously needs a bunch of work. The current retail and office space has a high vacancy rate. We have failed to attract a senior’s home, which should be the council’s #1 priority because that type of significant investment will generate significant taxes and sewer revenues.
I understand through the Hudson Jungle Drums that the IGA wants and needs to expand to meet current IGA standards, but Hudson won’t allow it because there’s not enough parking in town. That refusal apparently could precipitate a closure or a move to a new location near Mon Village, which would further cripple downtown Hudson and eliminate the walk to a grocery store for countless village seniors as well as those who would come to a new seniors complex.
Property evaluations fluctuate and so does the mil rate required to support the town expenditures based on overall evaluation. We need to look at the growth in expenditures offset by the new evaluations added to the role. If expenses grow by 8%, we better have added 8% in new evaluations, or taxes on existing properties rises automatically.
I cut the current administration some slack due to the mess they volunteered to wade into. But now well into this mandate they must take some clear actions towards a better future. Transparency is critical. Resolve the legal battles expeditiously and get moving forward.
According to the current administration’s own strategic plan, Hudson needs 100-200 additional doors every year to generate the tax revenues needed to keep taxes at their current level and maintain infrastructure. I don’t see that happening. Economists tell us Canada is heading into a five-year cycle of rising interest rates and stagnating housing prices. Growth has become an imperative.
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That parking requirement bylaw needs some flex. I have seen it stretched and tweaked before to accommodate businesses so the Town needs to get imaginative about this parking thing and help. Too many times is the initial answer to any project : “no,no,and no”. The project slated for opposite Cunningham’s fell through over a parking issue and now there’s an empty lot generating nothing.
Hudson hasn’t added a total of 200 taxable doors in the past 5 years, so this is a very ambitious target in a stagnating housing market. One might even think it could be called delusional, except actually calling it that could get you on Hudson’s “To Sue” list, so I’m not saying it’s actually that but very ambitious.
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Hudson’s new DG says the town has spent $200,000 on legal so far this year.
Peter and Jim , I’m already on the “To Sue” list so I’ll wade in on this cost cutting initiative our present administration has attached some importance to. I guess it’s an item by item kind of task and I do wonder where they will start. If I was to point an initial finger it might be to look at exactly what we are getting for our urban planning buck. 2014 – $371K , 2015- $399K , 2016 – $425K. We have 2 full time urban planners on staff whose time is taken up as bylaw enforcement officers for the most part as far as I can see. Septic installations , tree cutting permits, and shoreline vigilance are the major preoccupations. I spent 15 years on TPAC and attended over 200 mtgs. and never once did I have a feeling of any long term planning mgt. Ad hoc crisis management seemed due course. Some Questions : Why are private citizens negotiating with the MRC/CMM to remove TOD status from our train station? Why has the Parkinson Trail languished in some office drawer for 6 years? Why are we always having to ask for extensions to our Master Plan submissions? Haven’t we known of the requirement for some time? I was told when I asked at a 2009 TPAC meeting why the densities on the submission for Lower Maple Court were so high : because these would be the new requirements of the coming PMAD and our Master Plan would have to reflect this new reality I was told. 6 years ago. No plan yet. Now this could all be a lack of direction from assorted administrations but you do pay professionals in your employ to forward initiatives that at least will start the discussions. SO , yah, I think the now approaching 500K we pay for urban “planning” might be a start of the cost vetting. We never had an urban planning department until 1999 so let’s start looking at how things have improved.
I have been told with authority that my reference to the IGA rumours currently (heard just last week from multiple sources) are obsolete and very outdated, and that the parking issue couldn’t be further from the truth. I mentioned that issue without personal knowledge of the facts and because it is a currently circulating rumour in Hudson, and Hudson without a significant grocery chain would stumble badly.
In absence of facts and a good local paper actively covering all areas of governance, the Hudson Jungle Drums create “facts” which travel far and wide. A clear example of need for transparency. TPAC minutes should be posted on the Town of Hudson Website.
Parking in Hudson is an issue. The new studio opening in the old pharmacy at Main and Yacht Club technically needed 10 spots, owns 7 and if there weren’t public spaces and some flexibility and mathematics they would not be eligible for a permit.
Years ago, Hudson once purchased land for parking, then allocated half of it to the Treehouse Daycare and reduced the available planned parking spaces. The land across from Cunninghams will be difficult to re-develop economically without sufficient public spaces.
I’ve long questioned the Urban Planning budget, but it is Council’s responsibility to set the timelines and get the plan done and updated regularly. We certainly have more than the the necessary staff to accomplish it.
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Here’s a possible solution. Why doesn’t the town demolish the old medi-centre and create a public parking lot? Would solve a parking problem for the owner of the lot across Cunningham’s. There are also a couple of private residences north of the lot which might sell in the future and the new owners might want to open a business there and needing more parking.