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October 30, 2017 5:33 pm

Core Review Comparisons Valid?

Wednesday, July 10, 2013 @ 4:10 AM
Prince George, B.C.- When KPMG launched its Core Services Review, it selected 5 municipalities in B.C. and four winter cities in other provinces as the basis of comparison with services provided by Prince George.
 
The 5  B.C. communities that were to be used for comparison   are:
·        Kamloops,
·        Kelowna,
·        Chilliwack,
·        North Vancouver and
·        Nanaimo
In the 120 page report delivered to Council this week, and on which Council based its decisions,   the peer communities changed depending on the issue.
 
So, lets look at some of the cases put forth for boosting fees:
 
When it comes to on street pay parking for downtown, the report cites examples from Kamloops, Vernon and Penticton, which all charge a dollar an hour for parking. Kamloops is the only peer community in that comparison.   Chilliwack   offers 2 hours free parking and keeps track of violators with a hand held licence plate recognition  tool.  Nanaimo also offers two hours of free parking in its downtown improvement area. Kelowna’s rate is 25cents for half an hour, 50 cents an hour. North Vancouver’s rates for on street parking were not available at publication time.
 
Dog licensing. The current practice in Prince George is a fee of $32 for a spayed or neutered dog. That fee was reduced to $24 dollars if paid   “early”. In the report’s comparison of other communities to support the elimination of the discount, it cites comparisons with two communities not in the original comparison list, namely Penticton, which charges $31 dollars for a spayed or neutered dog, and West Vancouver which charges $25 for the same licence. 
At the discounted rate of $24 dollars, the Prince George fee was in line with Nanaimo ($25), Kelowna ($20) Kamloops ($25)   and the not mentioned North Vancouver ($26.50) but well ahead of Chilliwack which, through the Fraser Valley Regional District, charges $15 dollars.   With the discount   discontinued, the rate of $32 for a licence for a spayed or neutered dog in Prince George , is the highest among peer communities.
 
Business licences for secondary suites, according to the report, the communities of Vancouver, Kelowna, Vernon and Burnaby each charge a business license for  such suites and the fees range from $27.50 to $92.00. Three of the four communities cited are not on the list of comparable communities. Kamloops does not have such a licence fee nor does Nanaimo or Chilliwack. North Vancouver does, it is $18.50 per suite.
 
Aquatic Fees: While Council was being asked to boost aquatic fees, the case for comparison included facilities in Richmond, Langley, Coquitlam, Saanich and Delta, none of which were   among the original peer communities as selected for the Core Review.
The  current Prince George rate for an adult “drop in” swim is $5.70.
 
Here are the figures for adult drop in swims at the communities listed in the report and the peer communities  in bold as named in the KPMG Core Services Review.
·        Richmond “Watermania” pool is listed, with a rate of $6.25 per adult. 
·        Langley      $4.69
·        Kamloops ( Canada Games Place) $6.50
·        Coquitlam City Centre     $5.71
·        Saanich (Commonwealth) $6.25
·        Nanaimo (Aquatic Centre) $6.50
·        Delta (Sungod RC) $6.25
·        Kelowna (Parkinson RC$6.25
 
Peer communities not included, are Chilliwack, which has a 3rd party operating two pools and the cost is $5.50 per adult, and North Vancouver which charges an estimated $5.60 per adult ( notice on their website indicated the posted price did not include gst and would be increasing by 3%)
 
There are several other examples of communities used for comparison which were not on the comparison list created for the Core Review, which brings into question the basis on which comparison communities were selected for the 120 page report presented to Council.  Other ideas used communities such as Delta, Surrey, Burnaby, Richmond  and Vernon for comparison.

Comments

I think for PG using Cranbrook, Port Albernie, and Campbell River would be good comparison communities as they are substantial cities that have very similar industries that make up their economies and thus would be more appropriate in measuring comparisons. All are pulp mill based forestry towns.

City populations Canada 2011 census

Prince George – 71,974
=========================
North Vancouver – 48,416
Chilliwack – 77,936
Kamloops – 80,376
Nanaimo – 83,810
Kelowna – 117,312
================================
Port Alberni – 17,743
Cranbrook – 19,319
Campbell River – 31,186

I can understand the choice of the first group as comparables for starters, then go on basis of conditions found. Of course very few will be equivalent for winter conditions and remoteness to services such as asphalt paving.

For the life of me I do not understand the second group suggested by eagleone. The order of magnitude of the population served is just not the same. There are mill towns in the group chosen with the larger populations if that is the rationale used, as it appears to be.

As far as the article above goes, it is bang on.

The report should list the reasons why the peer cities were chosen.

Each time they bring in another city, they should list the reasons why they did it.

If they did not do that, then it is not the type of professional work that I am used to.

What about our two sister cities? I mean if they are sisters they would be the most alike!

I don’t recall any parking meters in downtown Kamloops is this something new?

Go to Google Earth, zero in on Victoria St. then go to street view of Victoria street and you will see the parking meters.

Kelowna has a kiosk system. As long as one does not have to put a dispensed ticket in the window of the car, that would be preferable, especially if the first 52 minutes is free…… ;-)

could it be that the peer communities in the core review didn’t yield any useful information so the folks at city hall dismissed it and have returned to business as usual?

They are back comparing communities that they have always used in seeing where the city is at with user fees?

Just another example of what a useless waste of time and taxpayers money the core review was.

In the final core review report there is very little true comparison of relevant benchmarks such as debt per capita, operational costs per capita, etc. In fact the comparison that is highlighted the most in the report is the number of elected officials and how much they get paid. LOL. btw, the comparison shows that our mayor and council are among the highest paid with, at least according to the report, the least amount of committee work.

Interesting to note that none of teh Regional Districts issues business licenses – it would be to expenses for them to adminster, so they don’t even bother.

Let us hope that the City does not start to enforce business licenses other than checking the yellow pages against their data base.

There should be an app for that … $14 … can be done a smart phone. ;-)

The cities I use have a substantial tax base from major industry like PG, but unlike PG are well run cities with substantially lower residential property tax rates and operating cost ratios.

I don’t buy the remoteness argument for paving costs. We have a refinery here in PG and they don’t. We have scale if its planned properly. What we have is inept leadership that will pay the ‘going rate’ what ever the paving companies set it at.

The only valid argument for removal for comparisons is snow removal costs. The rest is all about wants and what we are willing to pay a premium for those wants… each can be easily broken down to a per capita cost ratio.

“We have a refinery here in PG and they don’t”

And the refinery produces what product?

from the Husky site:

“Husky is Western Canada’s largest manufacturer of asphalt, which is produced from heavy oil at Husky’s Lloydminster asphalt refinery. ….. the high-quality asphalt is sold to customers across North America, with performance-grade products shipped to destinations as far as New York and Texas.”

“each can be easily broken down to a per capita cost ratio.”

They can be, but it will end up differently in different places. Breaking down numbers is easy. Figuring out how to break them down to get intelligent results is another thing. We saw that loud and clear in the KPMG report. There was not much intelligence in much of the number crunching.

I would like to know if they provided a detailed appendix of the methodology and rationale they used. Good professional reports will do that.

Let us look at the Mackenzie swimming pool. The operating cost is the same whether it serves 3,000 or 6,000 people. But if half the town leaves and people do not pay their taxes, then there is a big problem.

Or with PG, the operating cost of a large pool added to the small pool we had originally when I cam to town, and the outdoor pool we had before that …. the total cost went up by probably around 3 fold with the addition to Four seasons and then the addition of the aquatic centre.

Without many/any additional people moving to town over that time the per capital cost of swimming in indoor facilities in PG comparatively skyrocketed over previous decades.

One has to look at each service individually. Generalization simply does not work. The library would be another service we provide at a high level. Tennis courts is another one.

The parking meter discussion is closed so I am posting this here.

Downtown Bellingham is considerably more vibrant than the PG downtown. They do many things to preserve that and improve on it.

They do have parking meters. For a City which is more the size of Nanaimo or Kamloops, here is an image of the downtown parking meters.

http://bellinghamregister.com/media/Parking_Meter.jpg

Enforced between 9am and 5pm Monday to Friday. So, evenings and weekends, when the shoppers and entertainment seekers are out in full force, there is free parking.

Otherwise 25 cents for 20 minutes (time to go to a retailer or other business and pick something up quickly) and 75cents/hour.

Today when I needed to use the loading zone at the Oxford building, there was a private car parked in it. When I had finished my commercial business I left and found the ‘Meter maid” sitting on a concrete planter at 3rd and Brunswick talking on her cell phone. Interesting. I wonder who supervises the meter maids?

There are no meters ….. so what is the meter maid metering?

Okay, I had some time today to satisfy my own curiosity and do some comparable analysis.

I looked at the cities eagleone mentioned and added Kamloops and Nanaimo.

I used the 2012 Annual reports with the main financial tables in each plus broke that down to a per person rate based on 2011 Census data for each city, not census agglomeration.

Tangible capital assets (infrastructure) sorted in order of total value with highest first.

The numbers are population, total physical assets, per person value of asset

Kamloops85,678$1,039,895,834$12,137
PG71,974$604,931,000$8,405
Nanaimo83,810$586,111,331$6,993
Campbell R31,186$217,851,631$6,986
Cranbrook19,319$188,456,881$9,755
Port Alberni17,743$90,749,398$5,115
=====================================

Net financial assets .. numbers are total net money owing after debt is offset against financial assets (negative is a net debt) and then that shown as a per capita

PG-$79,128,000-$1,099
Cranbrook-$14,718,788-$762
Kamloops-$16,298,198-$190
Nanaimo$56,969,702$680
Campbell R$23,055,985$739
Port Alberni$16,672,797$940

So, our infrastructure is valued at about the same as Nanaimo but nowhere near that of Kamloops.

I think any fool can tell that when one travels through the 3 cities.

The others are simply small towns which may have more financial assets per person as well as total, they really do not have anywhere near the amenities nor can we expect them to have them. In my mind, there is nothing that is comparable with those small towns.

One more. Population density.

Sorted in order of most densely populated city

first number is the area in km2, the second is the number of people per km2

Nanaimo91.3918
Port Alberni19.76898
Cranbrook31.95605
Kamloops299.23286
PG318.26226
Campbell R143.12218

I see no clear correlation between population density of the city and the financial and physical assets of the city.

BTW, the Tembec mill is north of Cranbrook. It is not part of the City.

Domtar’s pulp mill, on the other hand, is within the City limits of Kamloops.

Campbell River’s Catalyst pulp mill was shut down in 2012.

http://www.campbellrivermirror.com/news/185104831.html

“….. a BC Assessment Authority (BCAA) change in the property assessment value of the defunct Elk Falls pulp mill was going to result in a 2012 tax revenue loss to Campbell River in the range of $1.8 million.”

“Laura Ciarniello, the city’s general manager of corporate services, confirmed Laidlaw’s warning that 12 per cent of the 13.6 per cent tax increase was due to the Catalyst re-classification.”

From the above ….. 13.6% increase in taxes ….. The disadvantage of living in a small, single industry town. Pg has moved away from that, although a shut down of all three mills would still have a similar effect on PG.

I wonder if anyone has looked at that scenario at City Hall from the point of view of risk management. I doubt it ….. it is pay as you go ….. everywhere ….

Those are some interesting numbers Gus.

Nanaimo and Port Alberni have near triple the population density of the comparable cities and a correlating high positive net capital per capita. Yet Campbell River which covers a large area with low population density like PG and Kamloops bucks the trend and has a high positive net capital per capita. Must be because the large park area in Campbell River skews their population density otherwise they would be the same as Nanaimo and Port Alberni for population density… with population density telling us something about financials?

Also if your numbers are right then we should see that Nanaimo has a third of the debt of PG, Campbell River only a tenth of PG’s debt and Port Alberni a little over a million in debt. These are manageable numbers when one considers a rising interest rate environment.

PG pays nearly twice the amount to service our debt in one year, than Port Alberni and Campbell River have in total debt. When interest rates go back to the historical norm of 7-8% this is the equivalent increase in debt service costs of half a municipal employee in Port Alberni, but in PG it will cost nearly 2/3’s of our payroll budget.

The benefit I think of using other pulp mill towns like Port Alberni, Powell River, and Cranbrook is the fact the economies and thus the forces that drive the cities are similar… incomes and external forces. Where as when one uses North Vancouver or Kelowna as a comparable city we are not comparing apples to apples as they are driven economically by entirely different metrics of wall street type wealth, rather than main street type economies.

PG goes broke trying to keep up with the big roller wall street Jones’s when we should be looking at our peers and the reality of the lunch pale category we really belong in.

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