The City of Prince George released its 2017 annual report this week.
It's a slick and glossy pride publication about all the great stuff going on but it's just the public relations lead-in for the really important pages at the back - the financial statements.
While this year's report visually looks much better than how they used to look five years ago, the numbers don't look nearly as great.
The biggest concern is the expense line. The City of Prince George spent $164.8 million last year, a worrisome number on several fronts.
First, that's nearly $10.8 million over budget from the $154 million in the 2017 budget bylaw. Most of the increased spending ($5.5 million) went to protective services for police and fire services. New equipment, new employees and extra hours of vigilance and support during last summer's Cariboo wildfires contributed to that. The budget was also off by $3.1 million for parks, recreation and cultural services spending.
Second, $164.8 million in expenses for 2017 is a whopping $14 million or 9.3 per cent increase in one year from the $150.8 million in expenses in 2016. The 2017 expenses look even worse when held up to 2012, when the city's expenses were $129.3 million. Cutting to the chase, spending is up $34.5 million (26.7 per cent) in the last five years.
Third, neither Mayor Lyn Hall nor city manager Kathleen Soltis spoke to the spending increase in their remarks in the annual report.
Finance director Kris Dallio does shed a little light on the situation, noting that the City of Prince George submitted $4.4 million in wildfire evacuation related expenses to the B.C. Provincial Emergency program. Still, that accounts for less than half of the spending in excess of the budget.
Fourth, there doesn't seem to be a discussion at this time about reducing how fast spending is going up, never mind cutting spending where appropriate, despite the city government vision statement, which calls for "sustainable fiscal management."
Fifth and last (but certainly not least), the rise in spending has been made possible almost exclusively by increased tax and user fee revenues. The City of Prince George collected $107 million in taxes and another $51.7 million in user fees last year. Five years ago, the city took in $86.6 million in taxes and $39.6 million in user fees.
While rising revenues and expenses can be partially attributed to low unemployment, a bustling local economy and population growth, the rest is simply municipal government choosing to tax and spend.
To be fair to the mayor and city council, they increased spending in the areas they said they would, based on what they heard from local residents. As a result, the biggest spending boosts over the past five years have been in protective services, transportation services and parks, recreation and cultural services. While expenses are up in water and sewer, they have actually decreased over the past five years in planning and environmental development, as well as sanitation and waste removal.
This council has also made it a priority to get busy repairing and replacing aging infrastructure, while also encouraging new development (which will then create further tax revenue).
Still, the pace in which municipal spending has been increasing over the past five years is not sustainable in the long term. Missing the budget by more than $10 million when the wildfire expenses cost less than half of that should have mayor and council asking for answers.
Furthermore, the local population continues to get older, with an increasing amount of Baby Boomer homeowners each year claiming their seniors discount on their home taxes. This large block of residents will be paying less in local taxes than they were when they were younger but still demanding the same level of city services.
It's not time to hit the panic button quite yet but better to ease off the gas on spending now than to have to slam on the brakes down the road.
-- Editor-in-chief Neil Godbout
