Thursday, 11 February 2016

MEMO TO BOB HALLETT (AND TO THE MAYOR OF ST. JOHN'S)

A letter written to the Editor of the Telegram on January 9th, by downtown St. John’s business owner, Bob Hallett, was more than a thoughtful message about a group frequently taken for granted.

It was a reminder that commerce, however small, is serious business; that fiscal prudence, in an economy in which government is the largest player, is at great risk especially when there is, according City Councillor, Art Puddester, “a vacuum of leadership”.

At the provincial level this is an all too familiar theme. In recent years, fiscal drunkenness has reduced the travails of entrepreneurship to the mantra: “I believe in Newfoundland and Labrador”. Except, in the real world, this is the empty bravado of ‘cheerleaders’. And it doesn’t pay the bills.

Bob Hallett spoke of many challenges, stating “…we persist — because we love this city, and the old downtown, and we believe in it”.


Mr. Hallett’s missive was, perhaps, less an epistle, than a lament. He was inspired to protest as a result of continuing tax increases on City residents and on businesses. Lately, the City went so far as to levy the part of the tax applied to business “occupancy” on “unoccupied” property, too.

Hallett’s letter was preceded by complaints in media interviews by downtown travel business owner, Peg Norman. It seems they have inspired others to fight City Hall, too. 

Hallett’s worries are genuine even if they are a bit late and incomplete.

He states the City has “an optimistic and expansionist fiscal agenda…divorced from economic reality”.  That’s essentially true. Recent tax increases reflect the temporary acceleration of an economy “white hot”; buoyed by excess spending and a mega-project environment, already winding down.

In this town and across the province, just about everyone adopted the belief that $100/barrel oil would be around forever. Not one Mayor….not one Councillor, and not just in St. John’s, possessed the good sense to call for a reality check.

As City and Town Halls and the Premier, too, are now discovering, unbridled fiscal exuberance is unsustainable. At the provincial level higher rates of taxation are unavoidable; they will likely be necessary to stave off insolvency. Lathered onto municipal taxation all business, especially small ones, they will be hurt. 

Politicians at the municipal level, ostensibly those closest to the body politic, should have been the first to realize that not just small business but people generally, especially the elderly, pensioners, and others on fixed incomes, never did keep pace with the promise of high oil or all the hoopla. Yet, Mayor Dennis O’Keefe felt emboldened to flippantly tell the media that an octogenarian, living off Mount Scio Road, whose assessment had increased by an unacceptably high 119%, could appeal if he didn’t like his assessment!

The Mayor exhibited the judgement of the remote and indifferent. 

The plaintiff Mount Scio resident represented a clarion call for understanding, as much as a wider demand for relief. It was an opportunity tailor-made for savvy politicians, for leadership, and for compassion.  The question is: how deep is the malaise at City Hall such an attitude exposes?  

Hallett notes Councillor Breen’s interest in “strong fiscal management of the city’s finances” but wonders how the claim manifests. The Mayor conducts, by his own admission, a lengthy private negotiation with Galway on some pretext of being proactive, as other land owners are shut out of the process. Then the transaction is cancelled, as if to confirm it was not a public necessity, in the first place.

Where are the mechanisms of oversight? How vast is the pretense to prudence?

The leadership void is clearly large at City Hall; except municipal minds are not limited to local councils.  

Hallett and his group are essentially responding to a tax “Invoice” already received. There are more on the way. They include not just higher provincial taxes but a doubling of power costs, too. That is why Hallett's group have to demand that the City (and the Province) wring every cent of value out of the most necessary people and programs. They can't afford any excess.

Mr. Hallett is warned, too, that the treatment of downtown business is the same as it was decades ago; my own relationship with downtown business having spanned 27 years. Any utterance from City Hall suggestive of affection for business people, who love the downtown, or who want to lighten their burdens is, I suggest, is accidental and unintentional. You did say, sir, you feel “neglected and abused”. 

I was especially alarmed by Hollett’s comment: “…in the midst of a crushing recession, we face a tax increase….a little over 14 per cent…many downtown businesses are looking at increases of over 20 per cent...business owners grow more and more concerned for their very survival.”

Bob: you need to know the recession hasn’t started!

It’s bad enough that the City’s expenditures are forecast to grow over the next two years; a $1.2 billion infrastructure program is laid on, too. The latter is needed to be sure but Council should not feel it has the right, carte blanche, just to raise levies without having publicly demonstrated it has put City Hall through a fiscal wringer, first.

As if to confirm “mad” is the new normal, the City wants to spend two years digging up Water Street, making it impossible for customers to access business premises, like Bob Hallett's and others. And, Jonathan Galgay assures all of us minimal disruption as if normalcy is found in a gravel pit.

The truth is the Mayor has let down his side; in place of giving leadership at a time when the entire City region is challenged by both a rapidly unfolding fiscal and economic debacle, he lets the junior Councillor take the lead.

In place of displaying, not just empathy, but a sense of urgency to get the City’s costs and taxes under control, he is content to pursue a fiscal program that, as Bob Hollett states, is blind to economic reality.

The “…bureaucracy…is extremely strong…and we have a council that’s extremely weak”, says Art Puddister. At least one Councillor has a clue to the problem.  

Finally, Bob, I have a couple of suggestions which you might discuss with your group:

1.      Don’t go within 100 yards of the Board of Trade. Too many of them are cheerleaders of excess. Did you note you were the one who had to wake them up? Your group can do quite well, on your own. Challenge City Hall until it agrees to revamp this year’s Budget, and revise its forecast expenditures. Don’t listen to any Councillor who tells you it can’t be done this year. The public are on your side.

2.      There’s a lot going on in Confederation Building. It’s going to hurt you and everyone else; the Premier’s dithering means it will take longer to resolve. People think it’s a “problem”. It’s isn’t.  It’s a “crisis”. Get ready by getting your overheads down, including city taxes. And be warned: new ways of being challenged will discover you!

3.      With regard to the proposed Water Street “big dig”….tell City Hall to shove it. That shove, Bob; not shovel. Anyone who suggests business can operate in the midst of chaos, piles of rock, dust, and debris, unkempt boardwalks, fumes, and poor access, for months at a time, does not know retail. The City dug up Water Street West, a few years ago. Bob, I remember. I watched it in slow motion. It was horrible. And costly to the small businesses located there. Some disappeared. Don’t let them do it to you!

What is the solution?  Tell the City when something breaks, to fix it. And leave again. If you don’t insist on this course, get ready to close shop. It’s that simple!

When it comes to doing business in the Downtown, especially retail, Bob Hallett is right when he says: “…we persist — because we love this city, and the old downtown, and we believe in it.”

If motivated people like him fail, the downtown will surely die.

The whole City will be the poorer for it.

A good beginning, when Council meets on Sunday, will be to start with the leadership.

7 comments:

  1. Nice piece!
    Just a quick note. Water Street Big Dig is/was planned as a 5-year program, that *may* extend to 7, executed annually from June-Sept.

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    1. You are correct but retail cannot endure being functionally closed for even for four months; for downtown that is prime season. That said, in retail fixed costs are so high and margins so slim, even a snow day is abhorred. The idea of a business becoming substantially inaccessible for months is unthinkable; it will cause many to fail.

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  2. The problem is not just the mayor, or the council. It is the city staff. they are bloated, overpaid, underworked, and just basically forget what their job is--to serve the public. They need a cultural change at City hall.

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  3. Council is just symptomatic of the whole toxic dump of politicians serving this vast wasteland, spending like drunken sailors, clueless as to any kind of forecasting and outsourcing basic intellectual functions. All now huddled in their thick quilts of privilege and pensions.
    Xo
    WWW

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  4. After examination of all the alternative courses that have been put beforeus from time to time and of variants that have suggested themselves to us, wehave no hesitation in saying that, in the circumstances now prevailing inNewfoundland, the proposal that a system of "Government by Commission"should be established for a limited period of years affords the best hope ofenabling the Island to make a speedy and effective recovery from its presentdifficulties. We proceed, therefore, to outline the plan which has been speciallydevised to meet the present emergency and which is based on the understandingthat, as soon as the Island's difficulties are overcome and Newfoundland is againself-supporting, responsible government, on request from the people of
    Newfoundland, would be restored.

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  5. Funny... it would be worth to see a poll of Newfoundlanders to see if we would actually prefer to have a commission of government. I personally have concluded that Newfoundlanders (and I am one) are incapable of governing ourselves. The community is too small, and the politics too personal. It results in a insular form of government, that breeds nepotism. We have our political leaders who reward the party faithfull, with patronage becoming the most effective form of supression.

    We need good managers, who can come into Newfoundland with no favours to be repaid, and really have a global view. They would run this province like the small municipality we really are.

    I see no other road out of this financial quagmire we are in. The void of leadership has on on the road to self destruction.

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    1. You are dead on correct... and don't worry we will be getting a de facto commission of Government soon enough.

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