Report indicates city’s expenses exceed similar municipalities

Bruce Walkinshaw - Penticton Western News Published: October 14, 2010 6:00 PM
An internal version of the City of Penticton’s $70,000 core services review, used by council to initiate several changes at City Hall including the firing of three senior managers and the elimination of at least seven other positions, has made its way into the public spectrum.  Detailing the findings — but for about a dozen blanked-out entries — of consultant company Helios Group, the document reveals assessments, concerns and recommendations Helios reported to council regarding every department in the city, many of which were not included in the public version of the review released in the spring. The 58-page document dated March 2010 was left in the Western News’ mail-slot.

In the report, Helios said a review of overall staffing indicates that Penticton’s head-count levels are about 40 per cent higher than comparison municipalities, although the figure includes the electric utility, a department most municipalities don’t have. And that Penticton total compensation is 10 to 20 per cent higher than other municipalities. “The findings from review of union position wages highlight significant wage discrepancies with the private sector. This comparison did not examine entitlements and benefits, which for full-time staff would further widen the public sector/private sector gap,” the report reads.  Although the copy of the report provided to the Western News makes no direct reference to specific employees or positions, it does make a case for the elimination of jobs and suggests that the city should look into reducing wages through negotiation and/or contracting out.“For each service we (Helios) have identified specific improvement and cost savings opportunities. The opportunities include things like introducing new technology, reducing the non-mandated services, eliminating facilities, improving business practices, reducing management positions, renegotiating staff salaries for select positions and pursuing outsourcing,” it says. In total, Helios said that it found the potential for about $2 million in annual savings, asserting that over the last five years Penticton’s expenses have being growing significantly higher than comparable cities bringing with them comparably higher long-term debt and taxes.“Penticton will need to clearly focus on restraining/reducing city spending if it is to return to healthy financial position,” it reads.

The report also says that RCMP policing expenses over the past four years have risen by 50 per cent and currently accounts for almost 30 per cent of total tax assessments, the single highest operating expense item for the city.  “Should expenses increase faster than (inflation), the city should consider service reductions or other methods to eliminate spending increases,” suggests the report. “If Penticton wanted to understand a comparable cost structure for a municipal force it could examine Port Moody’s police services.  Helios also asserted that Penticton has a high fire expense in comparison with other municipalities, even ones, they said, that operate more fire halls and cover a larger area. Helios noted Penticton’s expenses, for example, are estimated to be $500,000 to $1.5 million higher than Vernon. “Some municipalities that have maintained a larger volunteer service have fire protection costs that are only 30 per cent of what Penticton spends,” says the reports, estimating Vernon’s expenses to be $500,000 to $1 million lower per a year. “While some of the additional expenses is due to dispatch, it is also likely that Penticton has chosen a higher level of paid service and this higher level of service carries with it significant additional expense.”