The great debate – What costs should we share?

On Monday night Council had a good debate about the Barrie marina and cost-recovery.  What that speaks to is a much broader question – who should pay for what services, and to what degree should we all pay for them through public funding (versus “fee for service”).

I made a speech about this and took the time to write down my thoughts because this is one of the central questions for government at all times, but particularly now.   Here’s what I’ve prepared, it’s basically an extended version of what I had to say on Monday night.


There was an item for discussion at General Committee last week regarding a proposed auction of boat slips.  “Items for discussion” are well named – they are essentially private member’s bills at the local level, and may or may not go ahead.  This one has certainly generated a lot of discussion, most of it focussed on the idea of auctioning slips to determine market value. 

I don’t support the idea to auction three marina slips.  To be fair, the intent was to use an auction as a pilot project to determine market price for boat slips – but for an auction to truly reflect market value, it would need to be unconstrained.  With hundreds of people on our waiting list for a slip, and only three slips for auction, the result would no doubt be a highly inflated price.  It would not be any more reflective of market value than the current policy. 

I also don’t really feel that “market value” should be the basis on which the City sets its fee levels.  Market values are almost always inclusive of profit.  The City is precluded by legislation from making a profit on providing services. 

But I do support the intent of this motion.  The intent is to move the marina closer to full cost recovery, where revenues offset the full costs of providing the facility.

We’re actually not far off that today.  The marina generates an operating surplus every year, which is transferred to a reserve fund for marina improvements.  The problem is that even with that fund, the capital replacement costs are not fully funded – for example, the breakwall that protects the Marina is not covered, nor is replacement of the marina building itself.   At the very least, we need to assess these costs and make it clear how much of the marina’s costs are funded by operating revenues, and how much is funded or will be funded by the tax base.

This has raised a broader issue though of what services the City should provide, and whether we should provide these at a subsidized rate or a full market rate.  Almost all city services are “subsidized”, to one extent or another.  Streetlighting and police services are two examples of services that are 100% subsidized, in part because it’s not really practical to charge user fees for these services.  Others, such as transit, garbage collection, and recreation programs are a blend of subsidy from the tax base and user fees – from fares, bag tags, and program fees, respectively.

Some of these services are also provided by the private sector.  It has been said around this table that if it’s in the yellow pages, we shouldn’t do it.  While I admire the clarity of that position, I don’t really agree with it.

There are some services that Barrie provides that are also provided by the private sector, but we choose to do this because there’s a broader benefit to more people using the service.  But, we should only do this where there’s a very good reason.  The principle is there must be a greater public benefit if we are going to provide a competing service.

Fitness facilities are one example.   There are private gyms.  We also provide gyms at rec centres.  We do this so that there is a low-cost alternative that allows more people to keep fit.  This makes sense because it helps us stay healthier as a society.  And if were’ looking at the dollars only – the healthier we are as a society, the less our costs are elsewhere in the health care system.  So arguably the money spent subsidizing fitness facilities saves taxpayer money spent on health care.

Transit is another example.  Transit is part of providing transportation choice in almost any city around the world.  We do it in part so that people who cannot drive can get to work, to medical appointments, and so forth without having to pay a much higher price for a taxi.   We also do it to provide another transportation choice, one that has the considerable public benefit of keeping cars of the road and reducing pollution.

Council is tonight endorsing a plan for an overhauled transit system that will provide more people with more access, to jobs, to services such as the hospital and Georgian College, and help us get around more easily.  It will bring in more fare revenue, but the costs will be more than the revenue, so this service will continue to need a subsidy.

So back to the Marina.  What is the greater public benefit?

Is there an economic development benefit, a tourism benefit?  Not really, our marina has only a few transient boat slips for tourists.  No doubt if we had more, there would be more tourist boaters staying in Barrie, using our downtown shops, restaurants, and services – then there could be an argument for a broader public benefit.  But that is not the case with the current marina model.  Is there a public health benefit?  Not really.  There could be an argument that there’s an “accessibility” benefit – that people who can’t afford a private marina are able to afford our subsidized rates, so it allows more people to get into boating or sailing.  That’s probably true, at least for a few, but I believe we’re in an era now where providing accessibility through subsidy of a service like this, absent any other benefit, may be a luxury we cannot afford.

So with the marina and other services, we do need to move to a system that is more directly based on user-pay.  We ask our taxpayers for enough already out of the tax base.  User pay is well established for services where we are trying to encourage conservation – such as garbage collection and water – but also because it is fundamentally more fair and transparent.   This is why Council has made decisions related to garbage collection, recreation programs, and other services, to move to more of a user pay model.  As mentioned, there are some non-essential services that we may not be able to afford subsidizing anymore.

But in making these decisions we should not forget our principles, and simply privatize anything that’s in the yellow pages.  Because against the “user pay” principle needs to balanced the principles of access and public benefit.  Providing lower cost access to fitness facilities and kids sports programs, for example, should continue, in my opinion, because there are broader public benefits.

I like the fact that Barrie has a marina.  I don’t know how we could be “Ontario’s premier waterfront community” without one.  I would even like to see it expanded, particularly so we can have more transient slips.  Then we are creating a facility that has a broader public benefit.

Most of all, though, given the fiscal climate we are in, we need to have a open and frank discussion with our residents regarding what services we provide and at what level of subsidy.  This needs to be a debate that has the benefit of good information about current and future costs, and extensive consultation with the people who use the services and those who pay for them.