City of Powell River was in the top 10 of municipalities in BC that kept operating spending in line with inflation and population growth in the last decade, according to a new report by CFIB (Canadian Federation of Independent Business).
The city was ranked 146 out of 153 municipalities, the eighth best in not increasing operating spending above inflation and population growth. The CFIB ranks a municipality’s spending as unsustainable when it grows at or above the rate of inflation and population growth.
As well, Powell River was the only municipality in the Vancouver, Coast and Mountains region that was able to keep operating spending to inflation and population levels during the past decade.
From 2000 to 2011, Powell River’s real operating spending per capita growth decreased 16 per cent. In 2011, the city spent $1,489 per person, a three per cent decrease from 2010.
Still, the city’s 2011 operating spending per capita is higher than both the regional average, $1,416, and the provincial average, $945.
Mayor Dave Formosa said Powell River’s ranking in the report doesn’t surprise him. City staff, from top management to part-time workers, feel the frustration of trying to maintain assets on limited budgets, he added. “We’re a spread out city with a small population,” he said. “We’re not densely put together, so it’s expensive to keep our community in a way that we’re used to.”
The city has been cutting “to the bone” for years, Formosa added, yet it’s hard to explain that to taxpayers who feel the city should be reducing its spending even more. “People have been leaving and retiring, yet we haven’t been replacing or backfilling, unless they were absolutely key,” he said. “Even when they are, we are spreading it thin amongst our staff and making them do more.”
Previous councils took steps to reduce spending, as the current council has, Formosa said. “When you have these types of results, it comes at a cost,” he said. “When the rest of the world is out there expanding, we’ve been doing the prudent thing, living within our means.”
His solution is to create own-source revenue, Formosa said. “I think we understand that there is a time when we need to find more revenue or/and change the way we do things and what we do, in order to be the sustainable community that we are all striving so hard to be.”
Across the province, the study found that the average increase in operating spending per capita was 32 per cent to $945 per person, which represents $5.4 billion in excess spending. The CFIB said this increase is beyond what should be considered sustainable and fiscally responsible.
The CFIB said it is not too late for municipalities to adopt spending practices that are sustainable and fiscally responsible, and it recommends:
• limiting municipal operating spending increases to the rate of population growth and inflation;
• identifying and reviewing core services to ensure effective fiscal management;
• aligning public sector compensation with the private sector (the CFIB said there is currently a 35.1 per cent gap between the two sectors);
• increasing transparency of municipal financial information; and
• supporting the mandate of and abiding by the recommendations of the province’s municipal auditor general.
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