Penticton’s 2013 budget deliberations are filled with good news stories, like the Recreation Department projecting a need for a $562,869 subsidy in 2013, down from $1.15 million in 2009 (their last full year of operation before the pool reconstruction).
Revenue at the revamped community centre and pool far exceed expectations, according to Lori Mullin, recreation manager.
“Penticton is leading the way in making recreation more fiscally responsible,” she said.
Recreation is showing 31 per cent cost recovery on the community centre and McLaren Arena, up from a historical rate of 20 per cent. While not all city departments are reporting those kind of budget changes, the general culture is one of limiting costs and expenses.
But if city departments are doing so well in keeping costs down, the question remains as to why Penticton is still looking at a $1.147 million deficit this year, a trend that is expected to continue over the next five years.
According to CFO Doug Leahy, the deficit lies not so much with increasing spending at the city, but increasing costs, many of which are outside the city’s control. Only a small portion of Penticton’s $54 million budget, he said, is completely under the city’s control. Much are fixed costs or part of service agreements.
“There is more to it than just the revenue side of budget, there is obviously the expenditure side and the service level side,” said Leahy.
Overall, Leahy explained, expenditures have increased by about $810,000 or 1.8 per cent. That is paired with projected slow growth within the city’s tax base — assessment rolls are only expected to increase by $160,000 in 2013 – part of an overall $335,897 drop in revenues.
“A large chunk of that is the RCMP,” he said, listing a number of budget items coming at an increased cost to the city. Policing has the largest increase, $400,000, mostly due to a six per cent rise in the RCMP contract cost. But there was also a one per cent city-wide increase in labour costs at $200,000, a new communications office at $66,000 and bringing the economic development officer onto the city payroll at $75,000.
“About $2.6 million, or just under five per cent of the total $54.5 million, is truly controllable, where you can really have a say into what you can do,” said Leahy.
“We know we have an increase, for example, in our policing costs. We don’t control that so that is very difficult when we are receiving a $400,000 jump in our RCMP to hold the line, yet we know full well we have to come up with that money somewhere.”