For the first time in several years, City of Revelstoke Finance Director Graham Inglis isn’t chiming the alarm bells over the city’s financial position — though the city’s position still isn’t exactly all that great.
“The city’s overall indebtedness continues to be substantially higher than other members of the comparison group and both averages,” Inglis wrote. “At the time of writing this report, Council has taken steps through the financial planning process to reduce debt and to increase reserves. Over time, these initiatives should reflect in a reduction in Revelstoke’s overall debt position and an improvement in its net financial assets.”
Those are Inglis’ words in his annual financial performance report, which compares Revelstoke’s performance with that of Smithers, Castlegar, Terrace, Golden, Fernie and Summerland; as well as an average of all B.C. municipalities with a population between 5,000 and 10,000, and an average of all municipalities not including Vancouver.
In previous year’s, the comparison was to Castlegar, Nelson, Golden, Kimberley, Merritt, Quesnel and Salmon Arm.
The numbers are for the year 2012, the latest for which data is available.
The report is less dire than in past years, when Inglis warned of a detoriorating financial position. It is difficult to see exactly how Revelstoke’s performance has changed compared to its peers due to the change in comparison groups.
The report shows Revelstoke has $18,168,580 in financial assets in 2012, up more than $2.5 million compared to 2011. However, its financial liabilities went up by close to $3 million, to $28,631,079.
In terms of assets, Revelstoke was the highest in the comparison group, and similar to that of the 5–10K group. Revelstoke’s liabilities were many times higher than all similar municipalities, except Summerland, which were higher.
Liabilities per capita were almost $4,000 — well more than double the average of all B.C. municipalities.
Revelstoke’s net financial assets sat at a deficit of more than $10 million at the end of 2012. Only Summerland performed worse in this regard.
Revelstoke had $61,154,237 in non-financial assets (machinery, buildings, infrastructure, etc…) at the end of 2012 — similar to other communities in the comparison group, but less than the 5–10K group, which averaged closer to $100,000,000.
Revelstoke’s total debt at the end of 2012 was $20,129,067.
“This is almost double the average of all municipalities in B.C. as well as municipalities with populations of between 5,000 and 10,000. It is significantly more than all other members of the comparison group except Summerland,” wrote Inglis. “It is indicative of Revelstoke’s continuing reliance on borrowing as a method of funding its capital expenditure programme, in the absence of sufficient reserve funds or DCC’s. It is also indicative of the city’s commitment to investing in its infrastructure.”
Revelstoke’s debt per capita was more than $2,500, compared to the provincial average of about $500.
The ratio of long-term debt to total revenue was 1.04 in 2012. That means the city’s debt is higher than its revenue, so if it wanted to pay it all off next year, it couldn’t. The year before the ratio was 0.93.
Revelstoke’s accumulated surplus — the combination of equity in physical combined with operating, capital and reserved funds – was less than comparison communities and only about half the 5–10K group.
Consolidated revenues, which include all revenue sources, were $2,668 per capita — similar to the 5–10K group, but higher than most of the comparison group and the provincial average.
Revelstoke’s tax revenue per capita was $1,279 per capita — similar to the 5-10K group but higher than all comparison communities.
Revelstoke outpaced all but Fernie and Golden in the comparison group when it came to transfers from the province.
The city spent $2,544 per capita — second only to Fernie in the comparison group. The average for all B.C. municipalities was $2,230; and for municipalities in the 5–10K group, it was $2,400.
The biggest driver of costs were general government, transportation, which includes roadworks and snow removal; protective services, parks & recreation, and development services. For general government, Revelstoke spent less than most. In terms of development services and protective services, Revelstoke spent more than all other comparison groups. Transportation costs were a big driver of expenses, at $533 per capita in 2012, a result of high snow removal costs here.
The city also spent more than average on parks, recreation and culture, which Inglis attributes to the fact Revelstoke has a small surrounding population, so there’s little opportunity for cost-sharing with the rural area.
Spending on water was less than average, while spending on sewer was in line with the provincial average.
“Our operating expenses are generally within normal ranges but, where they do show higher than other members of the comparison group (e.g. transportation) there is an understandable rationale why this is so,” concludes Inglis. “Residential property taxes continue to show on the low side based on an average single family dwelling comparison and sales of services per capita are also low compared to other municipalities. This provides capacity for revenue generation to reduce the reliance on borrowing and bolster reserves.”