P.G. Ranking Improves on Municipal Spending Watch
Prince George, B.C.- The City of Prince George has made some gains when it comes to its spending practices, but there is still a long way to go.
The Canadian Federation of Independent Business has released it’s annual B.C. Municipal Spending Watch report.
Based on 2011 figures, and with the ranking of number 1 being the worst, and 153 the best, Prince George is ranked at 110. That ranking is an improvement over the previous year when Prince George was sitting at 105.
Keep in mind this report is based on the spending activities that were under the watch of the previous Council. The current Council did not take office until December of 2011.
According to the report, the annual per capita municipal spending in Prince George in 2011 was $1,229, unchanged from 2010.
The report also indicates that while real operating spending growth in Northern B.C. from 2000 – 2011 has grown 32%, the population growth during that same period has declined by 4%.
Community
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Overall Provincial rank
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Stewart
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2
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Fort Nelson (Northern Rockies)
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4
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Masset
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8
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Port Edward
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9
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Chetwynd
|
10
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The report says Northern B.C. stands out in two regards: "21 out of 30 municipalities have undergone a population decrease from 2000 to 2011; yet most of these municipalities ramped up their spending during the same period. That being said, larger municipalities of the region such as Prince George, Terrace and Prince Rupert fared better on both key measurements than the average for the region.”
On the most improved list in the north, are Sayward and Fort St. James, which cut their real operating spending per capita by 32% and 28% respectively from 2010 to 2011.
The City in B.C. with the worst ranking? Lytton tops the list as being the worst, while Kaslo came in as the best.
The CFIB makes 5 recommendations for all municipalities:
1. Municipal operating spending increases be limited to the rate of population growth and inflation.
2. In all cases, core services must be identified and core service reviews conducted to ensure effective fiscal management.
3. Public sector compensation should be aligned with the private sector. CFIB recommends to freeze public sector wages until private sector wages catches up and reaches parity with those of the public sector.
4. Increase transparency of reporting municipal financial data.
5. All municipalities support the mandate and abide by the recommendations of BC’s new Municipal Auditor General. The CFIB urges municipalities to commit to working constructively with the Municipal Auditor General to reverse the unsustainable spending trends.
You can access the full report here.
Comments
The population of Burns Lake in 2006 was 2,107. In 2011 it was 2,029
I do not know who clears the snow in the village. But let us look at a scenario where it is a small contractor who has a contract for the Village does the work. The cost of operation would increase over a 5 year period by the increase in energy cost, machinery maintenance cost (mechanics and welders wages have gone up more than the rate of inflation since they are much in demand in the oil fields), as well as cost of machinery replacement which I suspect has also gone up more than the rate of inflation. That leaves wages of the non-unionized employees of the contractor plus the bite the owner takes out of the net profit.
Based on a $100,000 increment of the contract to clear all the snow to an agreed standard, irrespective of the amount that falls, the cost per person in 2006 would have been $47.46
If there was to be no increase in 2011, the cost per person would be $49.29.
That is a 3.8% increase in taxes to deal with snow clearance.
BUT, we have not yet dealt with a contract that is a variable one, depending on actual snow fall, nor have we dealt with the actual increase in costs that the contractor would have to charge so that he could stay in business. In that business, that would likely be much higher than the cost of living change.
Who will pay for that? The taxpayer? The business? Or will the City have less services which will mean that eventually more and more people will move out to a location where basic services are provided.
The CFIB, a group that should know better about the costs of operating a business (Cities are businesses) and who will sell out to larger companies who have the capacity to operate more efficiently would be the last people I would listen to when it comes to evaluating city operations.
I agree with their last statement. I am waiting for the first words of wisdom from the auditor.
Other than that, it is obvious that shrinking cities and smaller cities will have the hardest time to cope when it comes to cost increases just to maintain the same service.
Then why are we expanding the city with new subdivisions which increase overall costs just to maintain the same services?
At one time the city made a big deal with the newest mantra: “Infill” but has it been abandoned with the study binders gathering dust on the top shelf?
43 points below top rank? That would be a F minus times negative 5.
Citys are businesses? What other business uses tax dollars to provide products and services to the general public, not just tax payers?
Cities and municipalities are publicly owned non-profit governments, NOT businesses.
“Then why are we expanding the city with new subdivisions which increase overall costs just to maintain the same services?”
Beats me!!!!
I think in part it is for the same reason that we created Box Store Heaven. The people are demanding access to the same type of shopping that other cities have.
In the case of housing, the people are demanding the same kind of access to newer housing styles. Along with that one has to provide a number of location options both for contractors to keep them “competitive” s well as for the people buying.
The fill-ins located in older subdivisions do not cut it.
I knew that would get your goat, people#1.
Look around. Look at how cities are competing. It does not matter where the money comes from. What matters is what the functions are.
Cities can go bankrupt, the same as any other business.
They can even die, such as Barkerville, like any other business.
Gus it’s amazing how little you know about the CFIB.
I realize that some Mayor and Councillors, present and past, view our city government as a business, which is why they get involved in spending millions of our tax dollars on airport runway expansions, attempt to invest millions into high speed internet, etc.
There-in lies the problem, city hall and services is a government, if a business thinks it can make some money providing high speed internet services to the downtown, LET THEM. Keep our city government out of money risking cr*p like that!
What motivates city officials to travel to China all the time? Business motivates them, and it shouldn’t! Stay the F* at home and do what you are paid to do, which is look after the multitude of issue /problems this city is facing!
Time to elect people who view city hall and services as a government, owned and operated in the best interests of the citizenship (taxpayers)! IMO
“In all cases, core services must be identified and core service reviews conducted to ensure effective fiscal management”
Does the CFIB define what a core service is? Heck, do they define what “effective fiscal management” means?
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“Public sector compensation should be aligned with the private sector. CFIB recommends to freeze public sector wages until private sector wages catches up and reaches parity with those of the public sector”
Nice assumption built into the statement (that private sector wages are lower than public sector wages). Such a blanket statement is completely foolish and full of holes. For example:
– What jobs are we talking about? Clerks? Accountants? Engineers? Mechanics? Lifeguards?
– What private sector industry comparable should be used? The oil and gas industry? The insurance industry? Tech? Forestry?
– What regional benchmark should be used when evaluating wage increases? The Peace? The Island? The Kootenays?
– What is after doing the analysis it is found that public sector wages in a particular classification rate lower than the private sector comparable. Should they be raised to match? I mean if the private sector is the standard . . .
I don’t know what metrics they use to justify spending in PG, but clearly when one looks at the hard facts PG is one of the most expensive cities in BC to have capital invested in.
Here is what I found out:
Assessment to population ratio, City, and population in order from highest to lowest property assessment per capita (ability to pay).
$1,086,882-Whistler-9
$316,882-Vancouver-580
$264,635-Sechelt-8
$261,993-North Vancouver-45
$225,430-Victoria-78
$219,442-Kelowna-108
$218,317-Saanich-110
$189,359-Vernon-36
$176,009-Penticton-32
$166,273-Nelson-10
$162,923-Comox-12
$161,292-Nanaimo-79
$153,430-Salmon Arm-17
$151,660-Kamloops-80
$141,901-Chilliwack-72
$139,357-Abbotsford-125
$138,526-Fort St John-17
$133,154-Cranbrook-18
$130,684-Campbell River-30
$123,889-Powell River-13
$100,515-PRINCE GEORGE-71
$98,932-Quesnel-10
$91,988-Vanderhoof-5
$84,750-Terrace-11
$78,026-Fort St James-1.3
$76,181-Prince Rupert-13
So clearly when we measure wealth in property, the measure used for municipal taxation purposes… clearly PG is not the wealthiest city in BC, an argument made to justify high taxes in PG. I haven’t even included cities like Surrey, Richmond, Burnaby… it would just push PG further down to the bottom of measured property wealth in BC.
Furthermore PG has the highest delinquent taxes in the province and is the only city other than Vancouver ($1.13 Billion) to carry more than a $100 million in debt.
So we do know for a fact that PG is near the bottom of measured wealth per capita as it pertains to a property taxation base.
The next question is using our new metrics what is the actual taxation to assessed value ratio? This clearly tells the tale of what the moving vans out of PG have known for years.
Here is what I have found using the metrics from above:
Total Municipal Taxes Imposed 2011 divided by the (Assessment to population ratio), City… in order from lowest to highest.
$33-Fort St James
$65-Whistler
$69-Sechelt
$73-Vanderhoof
$103-Comox
$124-Nelson
$171-Powell River
$181-Salmon Arm
$218-Terrace
$226-Quesnel
$252-Cranbrook
$275-Penticton
$287-Fort St John
$294 Prince Rupert
$319-Vernon
$378-Campbell River
$706-Chilliwack
$759-Saanich
$859-Victoria
$855-North Van
$883-Nanaimo
$903-Kamloops
$904-Kelowna
$1239-PRINCE GEORGE
$1358-Abbotsford
$3721-Vancouver
So there PG is near the bottom of actual measured wealth in property per capita, but third from the top in relative apples to apples per capita taxation. At least $300 more than our peer groups.
It appears that although most of the north has far lower property values per capita, this doesn’t always translate into higher taxation for the lower property values and in fact most northern cities are very competitive for taxation on invested capital… other than PG which ranks as the third most taxed city in BC for invested capital.
When it comes to taxation for capital invested in property clearly places like Vanderhoof, Sechelt, Comox, Powell River, and even Quesnel are bargains compared to investing in PG.
Invest in PG and pay the third highest tax on capital invested, and on top of that the second highest long term debt risk to future interest rate shock. Sounds like a bad investment to me.
Is it any wonder PG has been stagnant for the last couple of decades.If it were not for the wages paid in the forest industry in PG, and government jobs, then the town would be bankrupt and abandoned like Detroit a long time ago.
Assessment is a poor metric to use because the City will adjust the mill rates to get what it needs to run itself.
We simply pay way too much taxes for what we get. We have way too much administration that needs to be scaled back, big times.
Thank you NMG for adding some reason to the questions which meed to be asked ofd the CFIB.
I gather Professional is one of their members, paying some membership fee for which he/she gets what benefits?
Wonder how much those membership fees go up each year and/or what fewer services they get each year.
We have these posts each year this stupid evaluation comes out …. all old hat.
Can we talk about security services provided by the City?
Policing …. legitimate city police departments, including RCMP, their salaries and their facility and tools …. versus the private sector chocolate cops …..
Can we all agree there is no comparison?
Firefighting ….. professional firefighting services versus volunteer fire fighting services that get paid per call out ……
Do we really want to switch to chocolate cops and volunteer fire fighting?
We can contract out garbage collection.
We do contract out such things as:
1. cleaning of uniforms
2. paving of roads
3. laying of sanitary and storm sewers
4. building of bridges
5. building of buildings
6. designing of roads
7. designing of buildings …
8. negotiating of contracts with unions
9. conducting core reviews
…… and on and on the list goes …..
In fact, what we mainly have are staff who monitor contracts for quality and completion.
We used to have departments of public works at all levels of government. Many of those have shrunk to administrators who award private contracts and monitor the work of those contractors and certify payments to those public contractors.
In fact, probably the largest single, ongoing contract we have is with the RCMP. Many argue off and on that we should have our own police force as several larger communities have.
People 1st: “Citys are businesses? What other business uses tax dollars to provide products and services to the general public, not just tax payers? Cities and municipalities are publicly owned non-profit governments, NOT businesses.”
Amen to that. There is just no way they would piss about with their own money – where consequences could be serious and personal – as they do with the public purse.
Gus https://www.cfib-fcei.ca/english/join-us.html
Read a bit, learn a bit. CFIB is driven by small and medium business in Canada and is geared to help those businesses with federal and provincial issues effecting those businesses.
They do much more than the local chamber of commerce does for business.
Define the function of a relatively large city, or even a province or country.
Then define the function of a relatively large company.
The first is funded by taxpayers and given direction by a Council and administered by a hierarchy of employees.
The second is funded by shareholders and given direction by a Board and administered by a hierarchy of employees.
The qualifications of the people filling functions are the same for either.
As a shareholder in a company, if you are unhappy with it, you cash in your shares and invest in another company.
With a city, that is difficult to do. The only way to do it is move, get another job in another city, sell your house or find new rental accommodations, get your husband to move with you and find him a job as well and find you kids new friends and school.
So, who has the greater responsibility, especially these days? I would say a city.
To me, that is the key difference between a company and a city.
I wish that this city was a business, Gus! Then I would be a cherished and respected customer of this business, meaning I would get some respect lest I switch my allegiance and become the customer of another business/city!
Alas, the city is not, I am not, and I don’t get the respect and I can’t switch, i.e. I am just a captive appendage with a wallet to be dipped into at random!
“Then I would be a cherished and respected customer of this business, meaning I would get some respect lest I switch my allegiance”
Sounds like many monopoly enterprises such as BC Hydro, Fortis, ICBC, WorkSafeBC, etc.
Typically there are regulatory bodies in place if there is no competition.
I have often commented on the fact that we need a municipal board in BC. That would be a regulatory body which would provide an appeal process for issues such as the Haldi Road decision. Instead, we have to resort to the courts.
The new municipal quality auditor may improve the operations side a bit. But, I understand that there is no authority behind her to enforce recommended changes. I suspect, however, if an issue is common enough and municipalities are not complying voluntarily, the that province may step in to change the Community Charter, as an example.
BTW, eagleone, you have two tables of numbers posted above which make absolutely no sense.
so if these numbers from the cfib are from 2011 I guess that means rodgers and the last council weren’t doing so bad after all? I also agree with Gus that the numbers and comparison Eagleone provided make no sense.
A better comparison would be the expenditures per capita compared to other winter cities that have lots of snow. The core review was supposed to do that but that information was never provided.
Rather than comparing cities with lots of snowfall, how about comparing cities with lots of crime? Protective services is the largest budget item in PG. Of course teh core review didn’t cover this, so we have no idea if it’s being run efficiently
If the CFIB were to begin to understand the folly of their so-called research, then they would be well to start with a report such as the FCMâs – The State of Canadaâs Cities and Communities 2012
From that report come these words:
Building Prosperity traced the roots of these growing problems to a tax system that took too much out of communities and put too little back in. The result was a structural imbalance between local governmentsâ growing responsibilities, and the inadequate financial resources they received from an out-of-date funding system.
Municipalities were collecting just eight cents of every tax dollar paid in Canada. Mean-while they were building more than one-half of the countryâs core infrastructure; paying the salaries of two out of every three police officers; and funding responsibilities offloaded by other governments for affordable housing, immigrant settlement and public safety.
At the same time, federal and provincial governments were consuming more than 90% of the taxes paid by Canadians, and, through their sales, income, and corporate taxes, virtually all revenues generated by new economic growth. What they reinvested in municipal infrastructure was typically delivered through short-term, ad-hoc programs that made it difficult for municipalities to budget effectively.
Unlike many of their international counterparts, local governments in Canada were left to rely on the slow-growing municipal property tax, a regressive funding tool that hits middle-and low-income people hardest, including working families, senior citizens, and small-business owners.
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&ved=0CCsQFjAA&url=http%3A%2F%2Fwww.fcm.ca%2FDocuments%2Freports%2FThe_State_of_Canadas_Cities_and_Communities_2012_EN.pdf&ei=leN7Up6pGMjhyQHm-IDYAQ&usg=AFQjCNHPnhHFW-y82yMA-6ntjv4V07rCaQ&sig2=lay-JkKfTA3bzcr0cAyTqw&bvm=bv.56146854,d.aWc
“At the same time, federal and provincial governments were consuming more than 90% of the taxes paid by Canadians”
It’s also worthwhile to note that Federal and Provincial income tax rates have been on a downward trend for quite some time. Not only have municipalities had to pick up slack, the Feds and Provinces are taking in considerably less than what they would have in years past based on the same levels of income. This means less to go around even if they wanted to transfer dollars.
But hey, more people can afford a trip to Mexico so I guess it’s all good :)
The Municipalities did not have to pick up
any slack. The fact of the matter is Municipalities, especially Prince George, are not good managers of the money they have. Blaming other levels of Government is a good ploy that they use to make themselves look good.
What has happened to the Gas Tax money that is transferred from the Feds to UBCM and then distributed to municipalities on a per capita basis?? The Prince George tax amounts to approx. $2.9 Million per year. This money have been paid on an annual basis since 2005. There are of course many other payments made to municipalities, such as police fines approx. $1 Million per year. Gambling approx. $2 Million per year. Then we have the $33 Million for the Airport, Another $15 Million for Boundry Road. Million dollar upgrades to highways that pass through the City, etc; etc; etc;
The City of Prince George is not a business, nor is any other City. To call them a business is just the latest in a series of buzz words that people use, to try and show they are on top of the latest developments in the world.
The number 1. problem with the City of Prince George is Management, and from that falls all the other problems.
Fed/Prov contribution to the Airport should read $22 Million not $33
I think the numbers I provided make some sense. The assessed property values of a a city represent the size of the pie each city has as a bases for taxation. Cities get most of their income from property taxation. A city with a higher property assessment broken down on a per capita basis clearly has a higher ability to pay.
That’s not always the way it works though as in the case of Whistler with by far the highest per capita property assessments and nearly the lowest taxation as a percentage of property assessments. One would think Fort St James with the lowest property assessment would then have the highest taxation as a percentage of property assessment, but it has the lowest?
Some things that should stick out are the huge regressive discrepancies between cities on a property taxation basis if all costs are considered equal. Not all cities have equal ability to pay for essential services if limiting income to property assessments alone.
And with the second set of numbers being the taxes paid as a percentage of per capita assessments… its interesting to note that the smaller the town in population the lower the taxes paid as a percentage of per capita assessments… the lowest ten on the list as are all towns of under 10,000 people. I’m sure Whistler and Quesnel, and Nelson, and Powell River have professional services like RCMP and Fire protection, so its something other than that that allows them to keep their taxation as a percentage of per capita assessments so much lower.
Its almost as if the bigger a city tries to be the more they hose the property owners. The cities that are comfortable with their size do just fine and have little to no debt, and therefor have little risk of higher taxation due to interest rate shock.
So one conclusion could be that the tittle ‘BC’s Northern Capital’ and the hype and do-do that goes with it could be the greatest factor driving the empire building tax sucking phenomenon at city hall.
Another conclusion could be that the wanna be big cities have regional costs whether it be from trying to drive economic development or inheriting the transient population costs… costs that should be covered by the senior levels of government are downloaded on the regional centers driving up their burden on property tax payers in those cities.
PG being the biggest city in the northern 2/3rds of the province surely is being short changed by the province when it comes to downloaded costs.
I think but I could be wrong, but wasn’t the Northern BC Regional Development Corporation funded by the province? So now we have IPG funded by the city of PG doing the same work at a cost of over $2 million a year. Ditto for mental health care downloaded from the province to municipal funded RCMP services costing probably 10 more officers than we would otherwise need to fund. Ditto for a lot of the social services the city funds and provides, where is the province funding these things?
The regional airport and logistics park costs being a prime example of a city spending money it doesn’t have to try and buy its place as a top tier city paying for things that should be provincial or federal at best and serving nothing but to increase the local tax burden.
That said at the end of the day if a person has capital to invest they are going to look at the percentage of taxes paid on that investment. A dollar invested in PG property is going to pay a lot more taxes than a dollar invested almost anywhere else in BC regardless of what a dollar buys one.
IMHO
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