The Objects of our Desires (as seen by City Hall)

Ron Bolin: September 25, 2012

For where your treasure is, there your heart will be also.  Matthew 6:21

Using data available on the City’s web site it is possible to find the general objects of our spending desires over a number of years.  Our  “Expenditures by Object” can be traced at least from 1995 to 2011 using the categories of:  Wages and Salaries; Services and Supply Contracts; Amortization and debt payments, Materials and Supplies and Other, while the years from 2008 to 2011 add a category for Interest payments on Debt.  It is both interesting and puzzling to try to read Nanaimo’s trajectory from this point of view.

In 1995 total expenditure by object was $84,021,397.  At that time the City had a population of about 68,000 and thus spent about $1,235.60 per person.  In 2011 we spent $157,828,619 and our population was either 88,540 (according to figures given by the City and BC Stats), or 83,810 (according to Census Canada for 2011).  For the purposes of this report I will use the figure 86,175 the mean of those twe estimates.  In this case the 2011 per capita figure is thus $1831.49.  This gives us an increase in total per capita spending during this time period of between 48.2%  If we then go on to check for the cost of living increase over this time period we find that the CPI rose by about 30% during this period.  In short, City expenditures, after accounting for both population and cost of living increases and depending on your source for the population number, have risen by 18.2% on a per capita basis. 

Looked at in this fashion, growth itself has cost the typical Nanaimo taxpayer about 18% of our taxes over this period.  It has often been said, and was repeated again recently by a Nanaimo Councillor who should know better, that growth in the City reduces taxes by spreading the costs over a greater number.   It may indeed spread taxes over more properties, but unfortunately the costs of providing City services to those properties grows even faster.  This problem is particularly egregious in a city where growth and the costs of the required services which it entails are spread willy-nilly across the entire area of the city and the development potentials of peripheral locations are forwarded by planners and Councillors alike, e.g. the virtual elimination of our award winning Urban Containment Boundary.

One can also examine the variability of expenditures across the objects of expenditures over the years.  While one can expect some variability among these categories, one finds that they can vary rather dramatically.  During this period:

Wages and Salaries varied between 29 and 37% with 37% showing up in 2002 and 2003.  Other than these two years the highest percentage is 34% and we were at that figure in 2011.

Services & Supply Contracts varied between 33 and 59%, reflecting, on the development of greater or lesser projects.  The major highs appear to be associated with the construction of the Conference Centre.  The next few years should see substantial increases associated with the new City Hall Annex, the Bowen Road expansion and, of course, water related project costs.

Amortization of debts varies between 2 and 10% presumable again relating to loans which are associated with projects and the availability of cash or reserves.

Materials and Supplies expenditures vary between 5 and 10% which probably relates to when supplies may be acquired during a year and the fact that they may be carried forward from one year to the next.

Other expenditures vary between 4 and 10% and, as far as I have been able to determine, relates to the amount of purely discretionary spending by Council on such matters as property tax exemptions, grants, subsidies and discounts.  This is a substantial amount of walking around money to be given to our Council.

Only in the years since 2008 has a figure for interest payment on the debt been recorded in this chart and has been only about 1% of expenditures.

In summary, we are paying even more for more, not less for more and we need to be aware of it.  We also need to keep our eyes on the objects of “our” expenditures as designated by Council.  If you have any questions about this situation, ask your Councillors.  They have only three real tasks: to adopt goals for our City; to allocate funds to meet those goals; and to manage Municipal Staff to implement them.  The budget is the City’s most important document and the accounts associated with it are the record of our municipal progress or lack thereof.  To shut our eyes in the face of the numbers which flesh out our accounts is to abandon all responsibility for our municipal democracy and we should not be surprised if we find ourselves flimflammed.

My rough excel worksheet containing the data used in preparing this document can be seen here.   The data has been taken from materials found on the City of Nanaimo web site at www.nanaimo.ca