Observations on Departmental Budget Presentations: FPCOW Jan. 16 & 17

Ron Bolin: Jan. 18, 2012

Jan. 16

Item 1: The Port Theatre Society which manages the City owned Port Theatre on behalf of the City made a request for significant additional funding as they had their first, but substantial, deficit in their 2011 operations.  Like almost all of our nonprofit groups the Society has been affected by the economy and declining Provincial grants as well as increasing utility and other costs.  The Port Theatre was built in 1998 at a capital cost of about $10 million dollars, with $7 million coming from City taxpayers.  Operations and maintenance of the theatre have received annual grants since then and the Society has operated it within budget. 

In 2011 the Society received $454,000 in an operating grant from the City and a Capital grant of $100,000. If all costs were counted, they receive, in effect, a further hidden grant, as do many if not all City owned properties which are operated by private non-profit or for- profit agents, as they pay no property taxes due to City ownership of the land and improvements the consequent tax exemption.  The costs of servicing the property do not disappear, however but must be made up by general ratepayers.  (The same pass through of costs will pertain to any exemption given to hotel or motel builders.)  In the case of the Port Theatre this amounts to about $446,000 per year using the 2012 Assessment Value of the property and the 2011 tax rate for Business/Other properties.

Put it all together and it adds up to about $1,000,000 per year before the requested additional $90,000 annually in operating costs, continuation of the present annual increase of2%, and a new Co-Management agreement which would see the City taking over more of the maintenance operations.  Put it all together and it is a substantial chunk of change, even forgetting the City’s contribution to the initial construction and any borrowing costs associated.  At this rate each ticket sold is subsidized by taxpayers at a rate of about $10.00.

Should the additional request be granted?  Should the Society be pressured into reducing their costs?  I think that this can only be answered by a broader public discussion than is taking place at present.  The document regarding this request can be seen in the Council Agenda at:



Item 2: A letter was received from the Vancouver Island North Film Commission requesting a $32,000 grant to fund that organization in its efforts to bring more film development to our Community.  It quickly became clear that while there was some interest in taking part in this venture, there was considerable confusion regarding the roles in such ventures which were to be played by the new Economic Development Corporation and the $1.4 million dollar budget which Council gave to it, and Council itself.  It was obvious that some on Council still have the ambition to play development deal makers and that this may well conflict with the Development Corporation even before it gets off the runway.  The fast ferry and the hotel were both mentioned in this context.  This will be an important area to watch.  The grant request was eventually referred to the Development Corp. can be seen in the agenda at:



Item 3:  Along this same vein, the matter of the $218,000 grant to the BIA was raised.  Ours remains the only BIA in the province to receive a matching grant from ratepayers.  Asked about this situation, it was stated that our BIA is the envy of BIAs all over the Province.  I wonder why?

Jan 17

Item 4:  While due to the inclemency of our weather this afternoon (Jan. 17) I was unable to attend the final round of open Departmental budget presentations, I am told that in the first budget cutting move of the season, the position of City Auditor was axed saving a budgeted $150,000: pretty thin gruel, but a start.

The Departmental presentations from Jan. 16 are already available on the City’s web site, and the last set from Jan 17 should be up today.  See the Finance Department’s Budget page at:


And don’t forget the budget forum!