Trying to Understand Nanaimo Finances

Ron Bolin — October 13, 2010
In an effort to see what is happening on the Fiscal side of Nanaimo’s operations I’m starting a series examining the information contained in the city’s published documents to help me understand what it is that I complain about when I am called upon to pay my taxes on July 1 each year.  I hope that you too may learn from the data and better yet, help me to understand when I miss something important or run astray.  It will be manifest that I am not an accountant and need all the help I can get.

This first examination tries to present an overview by looking at a table (the 2005-2009 Fiscal Summary) contained in Nanaimo’s 2009 Annual Municipal Report.  I have, for the sake of brevity, removed the intervening three years so as to simply examine the five year period.  The data is presented in a table containing a number of comparable city derived categories.

I have calculated the percent increase in each category over the five years and compared it to the BC Consumer Price Index (CPI) to see how our figures match to the CPI and also to compare growth among the categories themselves.  To begin with we can note that Revenues and Expenses balance.  A good sign.  We can also note that  between 2005 to 2009 the  figures for both revenue and expenses increased at a rate 2.11 time the CPI.  How long can this overall trend continue until taxpayers are overwhelmed?

Next we can note that taxes in this period increased by 26.4% or 3.38 times the CPI increase of 7.82%.  Is this reasonable?  We can also note that almost the entire increase in the growth of total expenses from $98,336,531 in 2005 to $114,577,933 in 2009 (around $16 million) could be attributed to the increase in taxes from $60,599,591 in 2005 to $76,595,009 in 2009.  On balance everything else stayed about the same.  But of course it didn’t.  Note that in two categories expenses increased by over 100%.  Fortunately, in neither is the expenditure too great, but nevertheless the trend is disconcerting.

Looking over the rather ragged figures in other revenue categories or in expense categories things look like rather violent gyrations rather than a smoothly sailing corporation.  There is lots to think about in this table and new questions to be asked.  What do you think?  And what questions need to be asked next?

Sunny Dan has prepared these pie charts of the data contained in the table below.  Hopefully this may relieve at least some of Gordon’s confusion.  OK Gordon?

Nanaimo REVENUE 2005 2009 % +/- x CPI
Taxes 60,599,591 76,595,009 26.40 3.38
Grants in lieu of taxes 1,059,688 1,193,276 12.61 1.61
Sales of services 9,001,404 12,632,580 40.34 5.16
Other revenue 7,984,251 9,741,113 22.00 2.81
Transfers from other governments 4,816,858 6,059,066 25.79 3.30
Actuarial adjustments on debt 436,228 315,270 -27.73 -3.55
Transfers from reserve accounts and Other revenue 13,940,721 7,941,619 -43.03 -5.50
Surplus appropriated from prior years 497,790 100,000 -79.91 -10.22
TOTAL 98,336,531 114,577,933 16.52 2.11
Nanaimo EXPENSES
Administration 590,279 1,189,442 101.51 12.98
Corporate Services 25,782,548 19,950,573 -22.62 -2.89
Community Safety 25,488,333 35,442,756 39.05 4.99
Development Services 9,284,095 9,856,167 6.16 0.79
Parks, Recreation and Culture 20,251,897 28,204,405 39.27 5.02
Public Works 19,866,625 22,155,934 11.52 1.47
Payments on debt 2,079,465 4,176,753 100.86 12.90
Interprogram credits -5,521,578 -6,513,757 17.97 2.30
Excess of revenues over expenditures 514,867 115,660 -77.54 -9.92
TOTAL 98,336,531 114,577,933 16.52 2.11
Sources:
Nanaimo Data: 2009 Municipal Report
CPI Data : BC Stats (2005-2009 CPI change = 7.82%)
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