Not having read the January 9, 2012 issue of McLean’s, Santa was not aware that his chance of being robbed in Winnipeg was 1:342 (more than 3 times the Canadian average), so he paid the price for coming to Winnipeg unprepared.
A variation on the Three Wise Monkeys Theme
I was surprised by the number of emails and phone calls I received after posting the Three Wise Monkeys cartoon yesterday. Winnipegers are quite willing to guess at the “Who Am I” questions. There is a high level of agreement as to who the best candidates are at City Hall for “I see nothing” and “I hear nothing”.
I also ran across another image that attempts to answer the question of what causes poor hearing, eye sight and the inability to speak within bureaucracies. It is very revealing.
On a more serious note (if that is possible), it caused me to ponder the predicament that “I cannot speak” (aka the city employee), is in. The province has whistle blower legislation in the form of The Public Interest Disclosure (Whistle Blower Protection) Act to protect provincial employees who in good faith bring forward instances of wrong doing. The City of Winnipeg has not enacted similar legislation at the municipal level, essentially leaving city employees who wish to expose possible wrong doing, frankly, exposed.
In July of 2006 the CAO of the City of Winnipeg approved the Fraud, Theft or Related Irregularities Standard which applies to all civic employees. This standard was introduced in recognition that fraud, theft and unethical behavior is an issue within municipal administrations. The Standard requires that an employee who becomes aware of any incidents of fraud or a violation of the code of conduct must report such incidents to their manager or supervisor. What is missing of course is protection for employees who do so.
In September of 2010 the City of Winnipeg Audit Department issued the Fraud and Waste Hotline Research Study.
It would appear the impetus for this study was the lack of reporting as required under the City’s Fraud, Theft or Related Irregularities Standard. During the first 3 years after the City introduced the Fraud, Theft or Related Irregularities Standard in 2006, a total of 3 reports were received, 2 in 2007, 1 in 2008 and none in 2009. The audit report notes that: None of the reports were in compliance with the administrative Standard as none of the reports were made to a supervisor or manager as directed by the standard. (p.7)
The report indicates that one of the most common forms of fraud within government and public administration are schemes related to corruption (p.5). The audit report examined the reporting rates in several Canadian cities. Their review showed that between 2007 and 2009 Ottawa averaged 165, Calgary 50 , Edmonton 45, Winnipeg 3. (p.10)
One important difference between Winnipeg and the other cited cities is that the other cities have instituted a Fraud and Waste Hotline which allows city employees to make their reports anonymously to a third party and not directly to their supervisor or manager.
The audit department concluded: Some employees hesitate to report information regarding fraud or waste as they do not want to reveal their identity due to fears about potential retaliation for reporting a peer or manager. (p.7). If employees live in fear of retaliation for reporting a peer or manager, imagine the level of fear that must exist in terms of reporting a statutory or elected official. Another conclusion drawn is that fraud and waste is under reported in Winnipeg: it is likely that a number of possible fraud and waste incidents are going unreported due to the requirements in the City of Winnipeg standard to report to the supervisor with no reference to anonymity. (p.10)
The Audit report recommended that Winnipeg establish a Fraud and Waste Hotline managed by the Audit Department.
According to the City the process to create a Fraud and Waste Hotline is currently underway.
It is not known at this time if the City will also introduce whistle blower legislation at the same time. It is difficult to imagine why they would not. Whistle blower legislation would empower civic employees to be in a position to do the right thing and be protected. The winners would be the taxpayers and all honest employees, managers, supervisors, officials and politicians. The losers would be the dishonest ones. And who can make such a change? That would be the politicians, our city councillors. And if they don’t make the change does that mean we should assume they see themselves as having something to lose? (Did I say that out loud?)
Until such time as the City introduces meaningful legislation to protect honest employees who are prepared to put it on the line, “irregularities” will continue to flourish at City Hall and throughout the civic service. Why? Because they can.
What is Tax Increment Financing (TIF)
Let’s look at it this way. There is a piece of property that is generating minimal tax revenue. If that property were developed and turned into, say, a shopping mall, the newly developed property would yield significant tax revenues. The upfront costs of the development are high and require borrowing. In order to pay back the borrowed money, the ‘tax increment’ (that being the difference between the amount of taxes collected prior to and after the development takes place) is designated to pay back the loan incurred to fund the development.
A simplistic depiction might look like this:
- Current taxes collected on the property $100
- Development costs $100,000
- Post development taxes $10,000
- Tax increment $10,000 – 100 = $9900
- For the first 10-15 years post development the city would use the tax increment ($9900) to pay back the development loan
- Once the loan is paid off, the taxes generated from the development would return to the city’s general revenue stream
History of Tax Increment Financing (TIF)
Although relatively new in Canada and especially Manitoba, TIF has been used in the United States for almost 60 years. In Manitoba the government introduced a bill in 2008 which led to the enactment of the Community Revitalization Tax Increment Financing Act in 2009.
In a 2008 news release when the legislation was announced, the government indicated:
“Our priorities for TIF include support for the further development of Winnipeg’s inland port, rapid transit system, as well as affordable housing in downtown Winnipeg”.
The government further stated:
“Money collected from a community revitalization property would then be invested only in the same designated area”.
The press release concluded by saying:
“Tax increment financing is used in several American cities to support revitalization and renewal initiatives. In Manitoba these levies would be used to support economic development, community revitalization such as housing, social and cultural development and heritage preservation”.
The minister of the day also stated:
“It is our intent to consult with and report on the use of tax increment financing to ensure full accountability and support for our priorities”.
The Community Revitalization Tax Increment Financing Act was passed in 2009.
General Assessment of Tax Increment Financing
In the United States TIF has been widely used as a tool to spur economic development in depressed areas. The general conclusion seems to be that if properly used, TIF can be a valuable tool.
There have been some general criticisms about TIF schemes. They include:
- designation of areas as TIF designated areas that would have been developed in any event even without designation;
- favouritism and special advantage for developers who are politically well-connected; and
- tax payers bearing the cost of additional public services needed to service the newly developed property.
As an early attempt at TIF, the Stadium Project, does not seem to fall in line with the stated goals and priorities announced in 2008 prior to the introduction of the legislation.
The tax increment ‘generated’ in the downtown area is being ‘spent’ in the south end of the city- not to develop an inland port, not to support rapid transit, not to create housing in the downtown. No, instead its being used to build a new stadium at the University of Manitoba.