Chamber disappointed as council okays 3.5% tax increase

City operational expenses double from $9.5 to $19.9 million in seven years; spending up 9.1% this year; $1.9 million increase over 2012

Revelstoke Chamber of Commerce directors and executive members filed dejectedly from a city council budget meeting on April 9, feeling that council ignored their budget comment package.

Despite warnings from the Budget Focus Group and the Revelstoke Chamber of Commerce that the city has been on an unsustainable spending binge for a decade, council opted to stay the course, voting for a 3.5% tax increase, plus other hidden fee increases that mean it’s actually much more than that. Sewer rates were hiked by 15 per cent, for example.

In a huddle outside of the meeting, chamber leaders said their message wasn’t heard.

“I think there’s disappointment that expenses aren’t being addressed,” said chamber president Steve Bailey, as five other chamber board members nodded in agreement.

“We were hoping that expenses would be reviewed because the city’s been on a continual spending spree. [Since] 2008 to today spending has doubled. We’ve gone from [$9.5] million to [$19.9] million in five years. It’s not a two-per-cent increase in the budget over last year. It’s actually a 9.1 per cent increase in spending in the city budget. The city never speaks of that – that’s what council never tells the public about, and it’s been going on for years. It’s been going on since 2002.”

“The budget’s gone from $5 million to $19 million in ten years,” Bailey underscored. And city council doesn’t disagree; when asked if they concurred with the chamber’s assessment, mayor David Raven didn’t object. (The Chamber based their analysis on city numbers.)

(Read the Revelstoke Chamber of Commerce budget submission, the Budget Focus Group submission and the City’s budget document embedded in a PDF at the bottom of this story.)

Chamber members said increases in revenue streams brought on by new developments such as hotels masked the actual increases in city spending. In addition, the city has burned through budget reserves.

Chamber director Peter Nielsen said the city is risking the golden revenue goose. “That new revenue is not going to continue, especially if you continue to raise the business taxes – development is going to stop. What’s going to happen? We hit the point where there’s no new revenues, but we have this massive budget that we have to fulfil? We’re going to have to increase taxes … and start to see taxation in the nine- and ten-per-cent increases.”

Chamber executive director Judy Goodman said council focused on the wrong side of the equation. “What we were asking was that they actually look at the cost of the operating expenses, not just the [tax] increases.” A few last-minute cuts made by council on the altar of the highly-scrutinized final budget meeting weren’t sufficient. Council opted to hold back on hiring a new Corporate Review Officer, cut some fire department funding and trimmed an operations review, but Goodman pointed out these cuts were actually for new proposed spending. Regardless of the cuts, spending has gone up $1.9 million with the new budget.

“I also think the $160,000 they cut out were the easy cuts,” said chamber director Randy Driediger. “[They’re] just going to appease the public by saying, ‘Hey we cut stuff out of the budget.’ In the big picture where are the hard cuts being made? They’re not. That’s the problem I have with the whole budget process. Somebody [has] to stand up and be accountable.”

“The budgeting process is broken. It needs to be started sooner,” Goodman said.

Chamber members said talking about cuts to the 2013 budget just doesn’t work when the budget isn’t signed off on until mid-May; the city needs to move the whole process up by almost a year.

“It’s the city department heads that are the experts here,” Goodman said. “Let’s let them go back and figure out how to be more efficient.”

Chamber members noted layoffs were “taboo” amongst councillors, and efforts to find efficiencies were insufficient. The did acknowledge the city was facing some unavoidable cost increases.

To learn more about the Chamber’s comment, see the PDF document in its entirety at the bottom of this story.

Council opts for tax increases in split vote

Mayor David Raven had terse words for Coun. Tony Scarcella, after he accused the councillor of grandstanding.

“It’s not just a 3.5 per cent tax increase. It’s about a five per cent tax increase,” Scarcella said after himself and Coun. Chris Johnston unsuccessfully voted against the 3.5 per cent increase. “Also, I’d like to thank the Chamber of Commerce and the focus group. They spent lots of time, and we didn’t listen to them. I don’t believe it’s very fair to ask them to come back next year because they put lots of time [in] and we didn’t listen.”

Mayor David Raven bristled: “Councillor Scarcella, that’s wrong. That’s absolutely wrong. And this little sniping thing is going out of control. We did listen to them; I spent a lot of time with the focus group. The whole staff spent time with the focus group and we listened to all of their comments all the way along.”

The final terse exchange was the only marked deviation from the same customary rate-setting budget meeting over the past five years. Councillors spoke in turns presenting their views.

Coun. Steve Bender said the city had to build reserves (1.5 per cent of the tax increase is earmarked for reserves): “We’re running a thin line,” he said, predicting a catastrophic infrastructure failure of some kind. “It’s not a matter of if, it’s a matter of when.”

Coun. Chris Johnston, who voted against the increase, used a paycheque metaphor. He compared city hall to a week-to-week Johnny Paycheque. “If we give the city the money, they’ll spend it all. That’s what we’ve been doing.”

Coun. Linda Nixon said reserves needed to be built, but worried the earmarks would “get swallowed into a big black hole.” She asked for a new 1.5 per cent efficiency in city operations to match the reserve allocation.

Coun. Tony Scarcella pointed out a $1.9 million increase in expenditures in 2013 over 2012. “How can you tell the taxpayers that we’re going to save [$100,000 in reserve taxes] and then we spend $1.9 million more in expenditures, when the town never grows? It’s the same population we had last year … we just keep spending.”

Coun. Gary Starling expressed mixed feeling, saying expenses were up, but the budget didn’t have a good balance between tax increases and expenditure cuts. “I’d like to see some movement departmentally,” he said.

Coun. Phil Welock noted pressure from all sides. “At almost every council meeting there’s a group lined up for funding,” he said.

Residents are facing cost of living increases other than city taxes, such as electrical and heating gas rates. He said fire, police, supplies and materials costs were all up. “We’ve got 24 different committees and commissions,” he said. “Every committee meeting or commission I attend, those members … are looking to spend taxpayer money.” Welock said community members needed to be educated about cutting back.

“I think we’ve done a good job,” Welock said. “I’m not happy with three-and-a-half per cent … though I feel we need money in our reserves.”

Mayor David Raven said the budget process was getting longer and more complicated every year. He said the population of Revelstoke hasn’t increased, but the visitor population has increased “with up to over 5,000 people coming to recreate in any week over the winter.”

Raven said the city needed to build reserve funds to avoid borrowing. He said there remained uncertainty over property assessments. They have been volatile over the past years as values paralleled the real estate roller coaster that started when Revelstoke Mountain Resort got underway.

He said Revelstoke shouldn’t be comparing its budget to other communities, but instead to other resort communities. “We’re being pushed into a higher level of service than we can afford,” he said. “It’s a question of how we break the cycle.”

Did council heed input?

The Times Review asked Mayor Raven how the comprehensive comments by the budget focus group and the Revelstoke Chamber of Commerce had affected council budget deliberations. “They contained a number of similar themes, and in all cases they were considered,” Raven said. “Some of those recommendations are more appropriate in a longer-term strategy rather than budget-related. In some cases they are things that are outside of the budget process that we’ll have to pick up in the future. In both cases they were very concerned with spending.”

When asked for tangibles, Raven said many had come up during the process. He gave a new city plan to allow vacation rentals in some neighbourhoods as an example of a recommendation from the chamber. He said the focus group’s recommendations were built in conjunction with staff.

What’s next?

So, is it over? Not yet. City staff need to put the budget into a bylaw form. For those in disagreement with the budget, there is still room for public protest, which means making an official written submission, or attending a meeting to express your view. The dates are yet to be set, but will be within the next few weeks.

***

What do you think? The Times Review invites you to comment via Facebook below, or send us a letter to the editor at editor@revelstoketimesreview.com.

***

Two PDF documents follow – the public comments, followed by the financial plan, which saw some minor adjustments at the April 9 meeting.

City of Revelstoke 2013 budget process public comments by AaPOrlando

2013-2017 Financial Plan Revised April 5 2013 by AaPOrlando

CORRECTION: An earlier version of this story stated that city operational expenses double from $9.5 to $19.9 million over five years. This was incorrect. It meant to say over seven years.

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