By David F. Rooney
City Council began its financial planning process last week with a warning from Finance Director Graham Inglis that the challenges facing Revelstoke are likely to continue for the foreseeable future.
The challenges he described to them are significant.
“Building permit revenue is substantially lower than forecast — less than half,” he told Council when it sat as a Committee of the Whole last Tuesday.
“DCC revenue is also substantially less than forecast. This is dependent on new development which has fallen off but there are still DCC-funded capital projects coming forward for which there is likely to be little or no funding available.”
He noted that the interest the City has been earning on its investments are “half of what was projected and future projections have been cut substantially. Although there was hope that the Community Charter would provide municipalities with additional mechanisms to raise revenues apart from property taxes, this has not been the case and property taxes remain the only real way in which municipalities can generate revenue to pay for services other than some fees and charges.”
Resistance to property tax increases by heavy industry “is a province-wide issue and we have experienced it to some degree here in Revelstoke,” when Downie Timber objected vigorously to its tax increases.
Inglis noted that “Council has been sensitive and responsive to this issue but it does create extra pressure on the other classes. Just what is a fair apportionment of the taxation burden between classes is subjective and a decision that must be made by each Council in each municipality.”
Revenues are projected to grow, modestly, to $15.08 million in 2010 from $14.5 million this year. But expenditures —necessary expenditures — will grow, too. The City is supposed to have a small surplus of just under $62,000 this year. That will be swallowed up in 2010 when Revelstoke is projected to be burdened by a $450,900 deficit.
Inglis pointed to snow removal as a case in point.
“Everyone will be aware of the annual challenge faced by the city in keeping up with the costs of snow removal,” he said. “These never seem to go down and now, as they push the $1 million mark annually, have become a substantial cost burden.
Every second that ticks by our infrastructure gets a little older. We have sewer and water pipes that are way past their useful lives and are on borrowed time. We know this because this year the city, along with all other municipalities, has had to prepare an inventory of all its assets, including the long skinny stuff in the ground, detailing when it was built, what it cost and how much life is left.”
There are solutions, but some of them will be unpalatable: a five per cent property tax increase across the board, keeping the lid on employment costs, reviewing telephone service and finding ways to better upload some costs to more senior levels of government. There may be other steps the municipal government can take and those will be investigated thoroughly as City staff and Council embark on planning the next budget.