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Cities still spending too much

Maple Ridge
Maple Ridge's finance general manager Paul Gill points out that some municipalities are trying to maintain or upgrade aging roads and sewers, which previously haven’t been budgeted for.
— image credit: The News/Files

Cities are slowing their spending, but not putting the brakes on hard enough, says the Canadian Federation of Independent Businesses.

And Maple Ridge and Pitt Meadows are right in the middle of the pack, speeding along the path towards a possible fiscal crash, according to this year’s version of Municipal Spending Watch.

In its December 2012 report, Maple Ridge scored 94, and Pitt Meadows, 43.

The worst-performing municipality was Lytton, with a score of one, while the best performing was Mission, with a score of 146.

The ranking system compares the increase in per-capita spending and the general increase in spending, with the population growth from 2000 to 2012.

The scale says Pitt Meadows spending increased by 113 per cent in the last decade, while its population grew by only 19 per cent. Meanwhile, its per-capita spending increased by 79 per cent.

It’s an issue that’s been bothering Pitt Meadows Coun. Janice Elkerton.

She says the city hasn’t changed its policies to reflect the tough economic times and says she hasn’t supported the budget the past couple of years.

“Nothing’s really changed in the way that finance was done in municipal hall. Taxes continued to increase. Spending continued to increase.”

The city’s recent $16-million debt was “astronomical” compared to Pitt Meadows previous zero debts, she added. However, the city paid down $8 million of that last fall following the sale of 4.65 hectares of land near the Pitt Meadows Regional Airport.

Elkerton wanted to defer hiring another police officer for this year and save another $100,000. More savings could be found in possibly cutting the budget of the Pitt Meadows Economic Development Corp., which now costs $250,000 yearly.

“Which is now probably very high, per capita, compared to any other municipality around us,” she said.

“I’d like to see what exactly is produced with that.”

Elkerton said some of the easy spending cuts have been done and the harder trimming remains, adding that budget surpluses could be used to keep increases down. A few years ago, there was almost an $800,000 budget surplus, which instead of going into city savings accounts could have been used to ease the tax burden.

“I felt the taxpayers should have got a break with that.”

The city should also cut back in the number of consultants and studies it does, most recently the $15,000 spent to study social services provision. What’s the point when Pitt Meadows doesn’t have the money to offer social services anyways, Elkerton asked.

Pitt Meadows Mayor Deb Walters didn’t return phone calls for comment.

This year, the Canadian Federation of Independent Business excluded policing costs in its spending watch computations because of criticisms that police spending is not entirely decided locally.

Without policing included, the spending watch says that Maple Ridge’s spending jumped 74 per cent in the past decade, while its population growth increased 18 per cent.

But finance general manager Paul Gill pointed out that some municipalities are trying to maintain or upgrade aging roads and sewers, which previously haven’t been budgeted for. Maple Ridge also moved from a volunteer fire department to a combined professional and volunteer force, which required a separate levy, ratcheting up taxes.

Gill said he couldn’t say if the report’s numbers were accurate, but he liked the question asking why tax increases are higher than inflation and population growth.

In some surveys, he added, cities that get a poor rating have some of the lowest property taxes.

However, numbers from a sample property in central Maple Ridge confirm the dramatic rise in taxes since 2000.

Municipal taxes on that property jumped 61 per cent  in 10 years. In 2002, the homeowner paid $969. In 2012, that number was $1,558.

But Gill said with those higher taxes came steadily increasing property values, so the homeowner gained more than $200,000 from the increasing value of the house.

The ability of the tax base to support such spending is also worth considering, he added.

Mayor Ernie Daykin said it was easy to throw around numbers dealing with percentages.

"We did what we could to keep the (general municipal) increase to 2.25 per cent," he added.

"That's maintaining what we're doing and meeting our contractual obligations to our employees."

Daykin said the last decade the district has only hired between six and eight administrative staff.

"We're looking at it (spending) very hard and we take it very seriously that folks have some concerns."

Daykin said the district is spending only a few million yearly on roads when it should be $10 million and said it was difficult to gauge what services people could go without in order to curb spending.

"You wouldn't believe how many times I get asked for more hockey rinks."

According to the federation, if B.C.’s municipal spending just kept pace with the population growth, the average family would have saved $4,251 between 2000 and 2010.

There was one bright spot in the Municipal Spending Watch report.

In the last year, 2010, city spending went up by only one per cent.

“One year of relatively good behaviour is a promising sign, but it’s much like the early days of a diet – it really could go either way and only time will tell,” said Laura Jones, with the federation.

The CFIB said Chilliwack, Burnaby and Surrey improved the most, while Abbotsford and Langley city and township were the worst.

Abbotsford spending jumped by 30 per cent.

Overall, local taxes jumped 69 per cent, while transfers from government more than doubled, increasing by 273 per cent.

The report also notes that between 2000 and 2010, B.C.’s population grew by 14 per cent, while municipal spending jumped by 49 per cent.

 

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