Bruce Walkinshaw - Penticton Western News : February 18, 2010 6:00 PM
While many were at home watching the Canadian men’s Olympic ice-hockey team play their first game of the 2010 Olympics Tuesday, Penticton council methodically worked their way through a 2010 budget report from city treasurer Doug Leahy. Seemingly committed to at the very least freezing taxation rates in 2010 — this is the same group that flirted (4-3) with essentially raising taxes on churches and charities — council was given an overview of the city’s financial framework, with councillors occasionally revealing glimpses as to where they are considering placing their fiscally restraining knives. “The intent of this meeting here tonight is to really kick-start the budget discussion as well as to give you an oversight to the budget document that I presented to council in January,” said Leahy. The general operating fund, according to Leahy, as it sits now is at $56.5 million. And general capital spending is at $28.14 million, with the bulk of that money going towards upgrading and expanding the pool and fitness area at the Penticton Community Centre. The sewer project is at $5.4 million, the water at $11.2 million and the electric fund is set to $30.1 million, explained Leahy. “The water fund, just to give it some context, includes a $4.4 million capital project to deal with the upper Colombian Heights area,” he said, reminding council that the project still has not received final approval.
The treasurer hit council with the city’s overall debt. “The level of debt as of Dec. 31, 2009 is $78.74 million ... All inclusive: water, sewer and general capital,” said Leahy, with principal payments on the debt for 2010 at $5.8 million. “So at the end of 2010 we are looking at a total debt load for the City of Penticton of $85.354 million, that is our total debt that is projected for 2010 at the balance.”
Looking at cost drivers for the city’s expenses, Leahy explained that for simply the general fund only, not including utilities or capital, the city’s total expenditures before debt servicing in 2010 is $39.78 million. However, he said, there was about $10 million in contracted services — such as the RCMP, civic grants, the chamber of commerce, and Global Spectrum — which council could not adjust at this time, if at all. “If we only include what the city is responsible for and not what is contracted out ... it comes down to $29.186 million,” Leahy said. “Our labour for the entire general fund is approximately $22.473 million, which includes CUPE, the firefighters and management.” Leahy pointed out that the $22.473 million budget meant that 77 per cent of the city’s general expenditures goes towards labour, although he asserted that the percentage is fairly average for a municipality. “Every time, for instance, we say that we have to reduce our budget by $1 million, in realistic terms that is $770,000 in labour,” said Leahy.
“That’s the biggest part of our budget by far,” said Coun. Mike Pearce. “So, if we have to focus on reductions we should just ...” Pearce then cleared his throat, to which Leahy responded, “Yep.” Council spent some time investigating several areas of the budget where perhaps money could be saved. For instance, Pearce wondered aloud if money could be kept from the city’s depreciation budget. “What would be the consequences if I brought a motion to reduce that amount to about $500,000 this year?” he asked. “The consequences to the organization would be that we would leave ourselves vulnerable to not having finances if we had a sudden and unexpected malfunction in ... any major piece of equipment that we buy,” responded director of corporate services Jack Kler. “There are risks associated with it and it wouldn’t be prudent to do so. We are depreciating on a very extended term right now. For instance, on vehicles we depreciate them over a 12-year lifecycle. That is quite an extent. Computers have been moved up to 68 years which is almost unheard of. We are pushing the boundaries of what is deemed to be acceptable.”
With much of the meeting taken up discussing some of the larger city budgets, council decided to postpone debate on cutting some of the smaller discretionary budgets spent on city services, programs and grants. “I guess we are just getting an overview tonight,” said Pearce. “I have highlighted (budgetary items), in the hope that staff comes back with them and we will have things further identified or stripped out of there.” “Councillor Pearce there are a lot of items in (the budget),” said Mayor Dan Ashton. “You have some requirements I am assuming. But I look around the table and I see that there are councillors who also have requirements. So let’s leave it at this point in time and come back and discuss it.”
No comments:
Post a Comment