Revelstoke council got its first overview of the 2012 budget on Tuesday and what they heard was pretty bleak - especially when it comes to the city's infrastructure.
"Some roads are so far destroyed, they're not so bothersome to me because they've essentially become gravel roads. They're gone already," the city's Chief Administrative Officer Time Palmer told council. "It's the roads that are in pretty good shape that if we don't put the money into maintenance - that is of concern to me."
Palmer was leading council through what he called a high-level overview of the budget. It was the last meeting of the current council and newly elected councillors Linda Nixon and Gary Starling sat in on the meeting. They will be sworn in next week.
Palmer broke down his concerns into four areas: tax increases, city borrowing, the infrastructure deficit and budget creep.
"We want to take an approach of keeping taxes to a minimum," he said. "The problem with that is there's all these other demands of services and expectations."
Palmer brought up several points. He noted that there was an effort in the past few years to reduce the tax burden on business and industry.
He said the city was facing an increasing infrastructure, with crumbling roads, water lines and even problems with fire hydrants. He said Brian Mallett, the city's director of engineering would be making a presentation on the issue soon.
"We're worse off than we are two years ago," said Palmer, adding the infrastructure deficit should be considered as another kind of debt that would be passed on to future generations.
Fixing the roads would cost more than $20 million alone, he said, and as to the $1.75 million slated for road replacement in the preliminary 2012 budget, "We managed to balance the budget by borrowing every penny of it."
He told council there were big concerns about the city's ability to keep borrowing. He also said he had concerns over the types of things the city was borrowing money for.
"Ultimately when we look at balancing the budget, debt will become part of the picture," he said.
Lastly, he pointed out that small budget requests council agreed to could have consequences over time - what he termed budget creep. "There is an impact of these requests," he said.
After he was done, finance director Graham Inglis went through a draft of the 2012 budget that was prepared by staff.
Among the highlights of the draft:
- Property taxes are slated to increase by two per cent across the board.
- General operating revenues are expected to increase by 5.91 per cent to more than $17.6 million, up from about $16.6 million in 2011. This is mainly due to the increased revenue from BC hydro, more property tax revenue from new construction and revenue from curbside recycling.
- General operating expenses are forecast to increase by 0.75 percent to $16.7 million in 2012.
- The fire department and public works would see their budgets go down, the latter due to an expected reduction in snow removal costs.
- The planning department, and parks, recreation and culture, would see budget increases of more than 10 per cent.
Inglis emphasized the numbers are preliminary and the final dollar figures won't be determined until all of 2011's invoices come in.
The six councillors spent most of the meeting listening to Palmer and Inglis, but they did pipe up on occasion. Much of the discussion centred on the city's infrastructure.
"I'm not aware of any council that's ever maintained its infrastructure the way it should be, across Canada," mayor David Raven said. "It's one of those things we tend to ignore. People have been putting it off in favour of other projects and activities.
"There are a couple of roads I don't think will be there by the end of next year," he added.
Coun. Phil Welock noted there were numerous road issues due to the criss-crossing of culverts under city streets. Some streets weren't built properly in the pass and the former public works' managers that knew where everything was, like Brian Yeoman and Sam Olynyk, were now retired and their knowledge gone.
"It's pretty scary when you see what's going on out there," he said.
On the issue of taxation vs. services, coun. Steve Bender commented that in his experience, when taxes were raised, there was grumbling, but when services were cut, "there's an armed revolt."
"What does that tell us about what people really want?" he asked.
Replied coun. Chris Johnston: "They want their cake and eat it took."
On the snow removal budget, a perennial huge expense for the city, couns. Tony Scarcella had the following to say in response Inglis' comment that the reduction of that budget item was based on hopes of a normal snow year.
"I would like to see reducing snow removal budget through efficiency, not dreaming about having less snow this winter," said Scarcella.
Linda Nixon and Gary Starling, who will be sworn in as councillors on Dec. 6, remained quiet during the meeting but they spoke about the budget to the press afterwards.
"It's a lot to do about what is the mandate of council," Nixon said. "Council can't be all things to all people. Council has to care about the health and safety of everybody but they can't fund everybody."
Starling noted there was pressure on council to reduce spending and he echoed Bender's comment about the outcry over service cutbacks. "It's case of the squeaky wheel gets the grease," he said.
The budget must be passed by council by May 15, 2012. Staff hopes to go out for public consultations starting in January, said Palmer.