As it's about two months until the municipal election, I wish to discuss items of public policy that should be campaign issues.
Delta's finance department, under the long-term management of Karl Preuss, CA, appears to be well run. This is to his credit as it was a shambles when he was appointed in late 1999. However finance policy (that is, taxation) is set by the mayor and council, and they should be held accountable for their decisions.
Most municipal revenue is obtained from the property tax. Since house prices have risen rapidly the tax revenue also increases, even if the tax rate is not changed much. The result is that Vancouver area municipalities are awash with funds that are not being prudently spent.
The B.C. Ministry of Community, Sport and Cultural Development (can you believe that name?) has a website that provides comparable municipal taxation data for an average home. Between 2008 and 2011, the price of an average home in Delta increased by 8.10 per cent and general municipal taxes on it increased by 7.6 per cent; however, the Vancouver metro area CPI only increased by about 4.2 per cent.
I suggest you review Delta's selfanalysis of the Canadian Federation of Independent Business Research Study on B.C. Municipal Spending Watch (Dec. 6, 2010) on Delta's website. The CFIB argues that, in the absence of productivity gains, municipal spending should track inflation and population growth.
CFIB defines a parameter called the Fiscal Sustainability Gap (FSG), which is the ratio of operating spending growth over population growth and the inflation rate.
If the FSG = 1, then municipal spending is increasing with population growth and inflation; if the FSG exceeds one, then spending is increasing faster than required.
The CFIB found that, from 2000 to 2008, the mean FSG for all 29 B.C. municipalities with populations over 25,000 was 2.31. Delta's FSG of 2.36 was the ninth highest.
This means Delta's spending was increasing 2.36 times faster than it had to in order to maintain a con-stant service level, and that Delta's record was well above average.
The current mayor and council (excepting Ian Paton) were last elected in 2008. Delta's 2008 operating expenditures were $134.7 million; its latest (2010) operating expenditures were $158.6 million, an increase of 17.7 per cent.
The CPI for Vancouver increased from 112.8 to 114.9 in the same period, an increase of 1.8 per cent.
Assuming the population was static, the calculated FSG for the current council from 2008 to 2010 was an astonishing 9.53. Clearly this can't go on for long.
So what has the money been spent on? My notes indicate councillors gave themselves a salary increase of 15 per cent in May 2009 plus a $200 per month increase to their vehicle allowance; and another 2.9 per cent increase in December 2010 plus another $100 increase to the vehicle allowance.
The compounded increase was 18.5 per cent in 19 months. This was consistent with the rate of increase of operating expenditures.
I suggest the rate of increase of municipal expenditures under the current mayor and council has been too high, and that voters should ask them why municipal taxes are increasing at a rate 9.5 times faster than general inflation.
