By David F. Rooney
With an approval deadline of May 14, City Council is whittling away at the 2013-2017 Financial Plan and likely will continue to cut here and trim there before they approve it .
Mayor David Raven and Revelstoke’s six councillors reviewed a revised version of the budget .
This new version of the financial plan envisions, with a 3.5% tax increase (2% is actual tax increase, 1.5% is aimed directly at building up the city’s reserves) this year, revenues of $22.32 million, expenses of $20.93 million with a surplus of $1.39 million. That’s an improvement over the first draft of the budget which had foreseen, with a 5.18% average tax increase, revenues of $22.79 million, expenses worth $20.73 million and a $2.04 million surplus. That simple reduction in property tax increases reduced the City’s revenues by $309,000 which translates into reduced expenditures. Click here to see more detail on the changes.
While that’s an improvement over the first draft, some councillors wanted it go a little further.
“I’m still a little uneasy,” said Councillor Chris Johnston, adding that the municipal government needs to learn how to be frugal.
“If you give a guy a paycheque he’ll spend it all. If you give the City money they’ll spend it all. We need to live within our means.”
And that may be easier said than done.
“Over the past 20 years, federal government expenditures in constant dollars per capita have been declining, while their revenues have been increasing,” Finance Director Graham Inglis said in the draft plan. “Provincial /territorial government expenditures have been increasing at almost the same rate as their revenues. However, both federal and provincial government revenues fell in 2009. Municipal government expenditures have been increasing at a faster rate than their revenues over the past 20 years.”
“It is important to appreciate that the city is subject to a variety of different cost pressures:
- Demands for new or improved services.
- Development growth.
- Downloading from senior governments.”
The only pressure he did not mention was demographic change. Revelstoke’s population, based on Canadian Census reports, has been in a gradual decline. The number of people living in Revelstoke according to the 2011 census was just 6,772. That’s down from 6,869 in 2006. We like to think (and often say) we have about 7,500 people living here but the census doesn’t bear that out.
Inglis said one method of determining fiscal impact assumes that there is a direct correlation between growth in the number of parcels and new construction value, and operating costs.
“Based on this approach, the following table indicates the rate at which the city’s costs should have increased over the last three years compared to budgeted increases:
Inglis said the table shows that, over the last three years, the budgeted increase in operating costs was less than what could have been expected as the result of development growth. Although in the last two years the budget, excluding non‐TCAs, shows a higher rate of increase than would be expected under this methodology. He’s not entirely sure why this occurs but suggested the introduction of the residential recycling service in 2012 is an obvious example of “budget creep.”
“Nevertheless, there is always opportunity for cost reduction but this inevitably requires some difficult decisions on the part of Council,” Inglis said. “For example, in April 2012, Golden City Council announced that it would be eliminating its transit service. ‘We had to take a hard look at under‐performing services in fairness to the taxpayer and in this case make a possibly unpopular but logical decision,’ Golden Mayor Christina Benty said at the time.
“It is the responsibility of management to follow Council’s direction in the provision of services to our citizens in the most efficient and cost-effective way possible. There are frequent decision points arising during the delivery of services that provide opportunities for staff to control costs. Ultimately though, in order to achieve significant cost reductions, decisions will have to be made on whether certain services continue to be delivered. This could mean the elimination of a service in its entirety or a reduction to a level that is acceptable.”
Raven said the City actually services a larger population than people think because during the peak visitation months there are between 5,000 to 8.000 tourists in town. Reducing services would have an impact on the tourists whose expenditures are an important component of the local economy as well as on full-time residents.
But Councillor Tony Scarcella said Revelstoke should “be looking at other resort communities to determine what appropriate levels of service should be.
He also said the new cuts contained in the budget don’t go far enough and he insisted on the paring away of an addition $160,000 in expenditures.
Council eventually agreed and senior staff will determine how and where to find those cuts.
The 2013-2017 Financial Plan will doubtless be back in front of Council again. It has until May 14 to approve the budget.
Whether this will satisfy those people in the community who advocate steep cuts in municipal spending remains to be seen. During a Council meeting last month Inglis said the City typically received five comments from the public at budget time. Those are comments that are sent directly to the City by the Chamber of Commerce, the Budget Focus Group started three years ago and the comments from taxpayers. This year it received five as well from the Chamber, the Focus Group, two from Thomas Bruchig and one from Annie Purse. The City does not consider editorials, columns and comments posted online — or in print — at The Current or the Times Review as legitimate comments directed to the City. (That includes ideas posted on the Stoke List, such as this one)
If you have particular views about the budget please send them to the Mayor and Council and post them online in The Current and the Times Review. They may not regard them as official comments but they certainly read them and pay attentions to what people in the community think.