City of Powell River officials faced an embarrassing situation last week when it was finally confirmed that some information in a service review conducted by the Helios Group was inaccurate.
The report stated the city was not in a financially sustainable situation, if it continues on its current course. The review found there is not currently enough surplus from operations to adequately fund infrastructure renewal or replenish reserves. It stated that in the last three years, operating expenses grew by 22 per cent, while revenues increased by only six per cent.
After being questioned about what the 22 per cent increase was based on, the consultant reviewed the information and determined his findings were inaccurate. In an email to city officials, he indicated that operating expenses increased by 13.2 per cent, while operating revenues grew by 8.6 per cent. He also confirmed there had been an error in calculating the average salary for five senior management positions.
Initially, the report stated the gap between operating revenue and expenses has been gradually shrinking over the past decade from a high level of between $3 and $4 million in the early 2000s to a current crunch of over $2 million in 2009 and just under $1 million in 2010.
After reviewing the financial information, the consultant indicated the identified gap between operating revenue and operating expense is no longer shrinking year-over-year. It grew steadily from $1.5 million in 2004 to a high of $5.2 million in 2008 and 2009 and dropped to $3.6 million in 2010.
While the new information casts a more favourable light on the city’s financial position, it’s embarrassing that senior staff didn’t follow up on council’s direction to make sure the report was accurate before it was released to the public.
Five months passed between the time council received the report in October 2011 until it was released in early March this year. Part of the delay was due to the fact council gave the report to management to ensure it was accurate, the public was told, not to massage the document or its findings. Because the report was released with inaccurate information, we have to wonder what exactly was management doing? Why did no one pursue what the 22 per cent increase was based on?
Obviously, the inaccuracies should have been corrected before the review was released to the public. The fact they weren’t provides ammunition to those who don’t want to see any change at city hall. The report has raised valid issues in its analysis of the city’s organizational structure and its key findings and recommendations shouldn’t be ignored.
