Prince George is among the B.C. municipalities making strides towards reining in spending, according to an annual report from an organization representing small- and medium-sized businesses.
The Canadian Federation of Independent Businesses (CFIB) released its annual B.C. Municipal Spending Watch report, which ranks the province's local governments according to the sustainability of their finances based on their operating costs and rate of spending growth between 2000 and 2011 - which was the latest data available.
This year, Prince George improved by five spots to 110 out of 153 (municipalities are ranked from worst to best).
According to the report - compiled by CFIB's B.C. director of provincial affairs Mike Klassen and public policy and entrepreneurship intern Richard Fong - the province's population grew by 15 per cent during the specified decade while total municipal spending, adjusted for inflation, increased by 52 per cent - or about 3 1/2 times the population growth.
The numbers do not include capital expenditures, such as infrastructure, nor do they include policing costs because they "are largely beyond the political control of municipal governments and are instead determined by negotiations at the provincial level," said the report.
"The vast majority of B.C.'s municipalities have charted an unsustainable course over the past decade. While some city councils are working hard to get their fiscal house in order, the rest seem to be oblivious to today's economic challenges," said Klassen.
Spending in Prince George increased by 22 per cent, with an average population decrease of one per cent.
"As a whole, northern British Columbians on average, pay the most for the operations of their local governments among the regions examined," the report said, citing an overall population decrease by four per cent, combined with a 32 per cent spending increase. But Prince George is one of three communities, along with Prince Rupert and Terrace, performing better than the regional average.
Depending on where municipalities sit in their rankings drives how they react to the CFIB's report, said Klassen.
"Many cities and municipalities take it as bad news and their instinct is to criticize us and call us names. But there are municipalities that now use it for bragging rights," he said.
The report makes a series of recommendations to enable local governments to better control their spending. These include limiting tax increases to the rate of population growth, conducting formal core service reviews, increasing fiscal transparency and adopting sustainable wage growth policies.
It's not unusual to see 55 to 65 per cent of operating budgets spent on wages and benefits, said Klassen.
"And it is the area that has the most obvious discretion as far as municipal councils go because what they're doing is making decisions on collective agreements. And... you're in the middle of that process now in the city of Prince George, so you know exactly what that entails," he said.
Klassen said he expects Prince George to continue to improve and he credits the city's momentum in part to leadership from Mayor Shari Green, who he met at September's Union of B.C. Municipalities convention in Vancouver.
"I really liked her message, because she takes this stuff really seriously. First of all, she's a business owner and second of all, she just understands that she's got to make some very tough choices," he said, adding he hoped the community was supportive of Green's "efforts to try and keep spending sustainable for the city of Prince George."
"Frankly, if she doesn't do it then no other mayor or council in the north is going to want to do it either," he said. "So she becomes a bit of an example for others."
