As the city opened deliberations on its effort to keep its 2011 operating costs to a 2.5 per cent increase, councillor Cameron Stolz tried to get his colleagues to take a closer look at Initiatives Prince George's mandate and budget, but failed to get any support to defer an examination of the city's economic development agency.
IPG's request of $1.024 million was given approval by a vote of 6-1 on Wednesday during the opening day of budget discussions. Only Stolz voted against the budget request. Councillors Don Bassermann, Murry Krause, Debora Munoz, Garth Frizzell, Shari Green and Dave Wilbur voted in favour.
IPG also expects to augment its budget with money from other sources including the provincial and federal government to boost it to $1.79 million.
Normally, city council puts together a list of more difficult budget items -- that may be subject to changes -- for a decision at the end of the budget process.
IPG was not asking for an increase over its 2010 budget, but Stolz argued that after paying off its mortgage through the sale of a call centre building on 2nd Avenue, it had reduced its costs by $90,000 a year.
On Thursday, Stolz said since IPG reduced its costs by $90,000, its stand-pat-budget was actually an increase. He wanted to see any IPG budget savings plowed back into the city's general coffers. "Let's use that to lower taxes," said Stolz.
Stolz also questioned whether the city should be the ones spending that money to fund IPG at a time when we've had two consecutive years of significant fiscal challenges and we're heading into a third one now, and that IPG's financial statements show it has $800,000 available in its reserve fund.
Stolz also noted that Initiatives Prince George has taken on a regional economic development role, promoting such projects like the container terminal at the Port of Prince Rupert. While he acknowledged Prince George benefits from economic activity in other regions of the North, he questioned the regional role.
Coun. Frizzell said he saw no reason for delaying a decision on IPG's budget for this year.
The agency set out a thorough plan to provide more services -- including spending 20 per cent of its budget on creating a better downtown, and fostering a bioenergy sector -- for the same budget as last year, noted Frizzell.
While he said he doesn't want to spend money that doesn't benefit Prince George, work to promote mining or bioenergy has direct benefits for the city, said Frizzell.
As part of the budget deliberations Wednesday, city council also approved the library's request for $3.62 million.
The proposed 2.5 per cent increase on the city's $102.9 million general operating fund is the lowest since 2004. Increases in the past decade have averaged just under four per cent, with the highest increase coming in 2007 at 6.82 per cent.
City officials said challenges in keeping the increase to 2.5 per cent include increased costs of $5.43 million due to contracts, collective agreements, debt repayment and internal funding repayments.
That is offset somewhat by an expected increases of $1.68 million from fees, charges, transit fares, traffic fines and new construction.
The city's operating budget is larger that the $102.9 million general operating fund, because it also includes separate water and sewer funds.
Budget deliberations continue on Wednesday.
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