Frances Bula header image 2

The state of Vancouver finances? Not an easy election issue

December 9th, 2010 · 53 Comments

I’ve had more than one person, fulminating about how Vision Vancouver is wrecking the city in various ways, suggest that one clear sign of their mismanagement is the state of city finances.

The crazy spending on bike lanes, the office renos, the trips here and there, they point to. Others are scandalized by the $20-million budget shortfall. The guy who cuts my hair, always an infallible guide for me as to how the public chatter mill works, says his Shaughnessy and Kerrisdale clients are fuming about the way the city is spending money. The village mess, for one, is what gets them mad. Anoter: the amount of money the city is spending on the BC Place roof, he said.

Huh? I said, as hair was falling all around me. But it’s the province spending all the money on the roof. No, he insisted, the city is putting some in too.

Actually, they’re not, only in the sense that council (with a provincial gun to its head) allowed the land around BC Place to be zoned to high density so that the profits can pay for the roof. But no cash on the barrelhead.

As for budget shortfalls — well, every civic reporter in the city can tell you that every year, we go through a cycle where there’s an early report that there’s a $20-million, or $27-million, or $18-million or whatever shortfall (with a predicted horrifying five or eight or 12 per cent increase) and then it all gets managed down, usually, to something reasonable by budget deadline.

As I noted to a group I spoke to recently, if the Non-Partisan Association wants to get traction on finance issues in next year’s civic-election campaign, its candidates are going to have to hope and pray the public continues to be mad about the village or blame the city mistakenly for wild over-spending or go berserk over some minor but symbolic spending on a chicken coop or electric-powered tricycle.

Because the bottom-line people just don’t think there’s a financial problem. This editorial from the Vancouver Sun echoes what the bond-rating agencies and those knowledgeable about city finances are saying: that the city’s finances were in a bit of a shambles until recently, with no clear central sense of the overall money picture.

There are lots of issues Vision Vancouver is vulnerable on. This will be a harder row to hoe than others.

FYI, here’s a clip from what the city’s most recent bond-rating report, from DBRS in July, had to say:

Vancouver maintained a balanced operating budget for 2010, as required under provincial legislation. Budget pressures stemmed predominantly from an increase in police services and annual salary increases for citystaff from previously negotiated contracts. However, city management dealt with most of the pressurethrough a continued hiring freeze and a service review aimed at identifying new efficiencies. All in, prudent cost management reduced the average tax impact to a modest 2.08%; 4.08% for residential properties and0.08% for non-residential properties.

Medium-Term Outlook

The City is currently operating under the 2009-2011 operating and capital plan. Under this plan, Vancouver is expected to continue to deliver sound operating results in the years ahead, although pressure will persist from higher debt servicing costs and sustained contractual increases in salary and benefit expenses. While increases for most staff are locked in until the end of 2011, police and firefighter collective agreements are up for negotiation at the end of 2010, creating some uncertainty regarding future cost increases.

Categories: 2011 Vancouver Civic Election