Borrowing and going into debt is like cocaine for municipal politicians. It provides a short-term high—usually a new shiny building—with consequences in the future, often after the term of office of those who built it.
Here is a bit of “Borrowing 101” for municipalities. This is not an opinion, nor is this passing any judgment. It is simply how it works.
The first principle to understand: the world is run by those who show up. This is especially true for politicians sitting in council chambers. Councillors who show up get a vote and those who do not show up do not get a vote.
People who show up to speak in chambers also get to influence the votes and those who do not show up, do not influence the votes.
There are three groups who show up to influence voting and advocate to councillors, individually and as groups. They are:
- Administrative departments supported by the CAO;
- Special interest groups coordinated by one leader;
- Those who are opposed to spending money period.
Let’s examine these briefly.
The administrative departments always show up — it’s their job. They advocate for an expenditure of a new swimming pool, new grader, new fire hall or new IT system. They have easy access to council all year long. Budget setting by municipalities in Alberta is required to be performed annually and as such, the system has automatic administration lobby time baked into its annual schedule.
Administration presents a bunch of business cases (ideas to improve or make changes), and council cherry-picks their favourites, and they get approved. At times not enough money is in savings to do such a project and borrowing plans can begin.
In the second example, a special interest group comes forward at a time of their choosing and lobby and email and meet and use every tactic known in society to advocate. Firefighting unions, pickleball associations, library advocates and swim clubs all pick and choose throughout the year when and where and how to advance their case.
A councillor takes on the cause and helps them along and convinces other council members to go along with the idea and it gets approved. At times not enough money is in savings to do such a project and the borrowing plans begin. Councillors whisper to these groups “show up in council chambers”, and lo and behold, it is “game on”. Borrowing plans begin. In councils of seven, four beats three.
In the third case, the “anti-group” can be powerful, especially when led by credible leaders. It may also be a weak group led by people who are against all spending of any sort. These individuals may even be dubbed the disrespectful name of “CAVE people” who are better known as “Citizens Against Virtually Everything”. With some councils in Alberta, this group wins out and borrowing plans never need to begin. Again four beats three.
Borrowing by small cities in Alberta between 2017 and 2021 increased by 13 per cent. The opposition to borrowing is always low. No one shows up to oppose borrowing. There is a threshold when the “anti-group” is loud enough that the borrowing is shelved, but not often.
Lobby, for or against, and you may get what you wish for. The world is run by those who show up.
And that is how it really works.
