Letter to the editor 1, May 3, 2018
Open letter to Hudson Mayor Jamie Nicholls
Dear Mayor Nicholls,
I have not received an answer to my letter to you dated April 14 that also appeared in The Journal.
I have therefore decided to forward an email that I sent to Councillor Chloe Hutchison to further highlight my concern about the direction you are taking our town.
The financial needs of this town can best be described in the form of cash. In my view the town will need to spend at least $2 million a year on capital to start to catch up on deferred spending on infrastructure beginning with roads.
How this is accounted for can be confusing but the fact is capital spending must be funded from either the annual revenue cash surplus (revenue minus operating expense) or borrowing which will need to be paid back from an annual revenue cash surplus over time. Property tax represents approximately 85 per cent of revenue.
Without raising property tax the only way to create a revenue surplus is to reduce the annual operating budget.
So you can understand why I was so encouraged with Mayor Nicholls’ campaign focus on operating expenses. You can also understand how disappointed I was with a budget increase of eight per cent. Cash is king so if you spend it on operating expenses you will not have it for capital programs which must be paid either from yearly revenue surpluses or through borrowing which in turn will need to be serviced (interest paid) and repaid.
I have a great deal of experience on reducing and controlling operating expenses in businesses with similar expenses to those of the Town of Hudson. I believe there is a great deal of opportunity to reduce Hudson’s operating expenses but there needs to be an alignment of the council and the administration to achieve this. Reducing operating cost is hard because of its impact on people.
In my view, if you and your colleagues don’t quickly reduce operating expenses, you will leave your term with the town in a state of near financial collapse.
As for my interest in helping you by providing advice to two of your committees, I hope the lack of response from the mayor and council isn’t linked to my differing views from them on various subjects.
Your leadership is required to focus the organization on operating expense and cost control. I would appreciate an answer to this and the earlier letter.