A new independent report praises the City of Flin Flon for controlling expenditures but points out that no major municipality in Manitoba spent more per capita in 2012.
Manitoba Municipal Spending Watch, a research report released last week by the Canadian Federation of Independent Business (CFIB), compares the budgets of the province’s 24 largest municipal governments.
The report argues that a municipality overspends when it boosts expenses above the combined rate of inflation and population growth. Based on those criteria, Flin Flon was identified as Manitoba’s most reasonable spender for 2008-12.
Flin Flon “has demonstrated recent efforts to control municipal spending” and in doing so saved each taxpayer $868 for the allotted period, it says.
At -$4.7 million, Flin Flon was one of just two municipalities that did not cumulatively overspend for 2008-12. The only other community on the negative side of the ledger was East St. Paul at -$2.9 million.
Low ranking
But the CFIB report also ranks Flin Flon 21st of 24 municipalities on its “best to worst” list of per-capita spenders.
The list assesses municipalities on two fronts: growth in real per-capita operating spending for
2008-12 and actual operating spending per-capita in 2012.
Flin Flon’s per-capita operating spending declined six per cent over the selected period, but its per-capita spending in 2012 was the highest of the municipalities at $2,109.
Coun. Colleen McKee, chair of Flin Flon city council’s Finance Committee, says the report is not entirely straightforward.
“At first glance we look like cellar dwellers coming in 21 out of 24,” says McKee, “but after reading the report in its entirety, you realize that even with a declining population, council has been watchful of overspending even though we have the same length of infrastructure above and below the ground to maintain and operate. It is simple math that dictates less people will have to pay more to maintain service.”
She says the report speaks to the sustainability of operational spending but does not capture the “diversity of contributable factors that impact necessary spending.”
McKee adds that Flin Flon’s top ranking among “reasonable spenders” reflects council’s “ongoing efforts and tenacity to control spending.”
Doug Dobrowolski, president of the Association of Manitoba Municipalities, a lobby group, argues the report does not provide proper context around the issue of spending.
In a letter to the editor (see pg. 4), Dobrowolski calls CFIB “irresponsible” for “scolding” northern municipalities that deal with unique challenges such as geographic isolation, social conditions and lack of employment opportunities.
In the overall ranking of per-capita spenders, La Broquerie earns the coveted top spot. The southeastern community chopped real per-capita operating spending by 17 per cent for 2008-12 and doled out $499 per-capita in 2012.
On the same list, The Pas comes in dead last with a 16 per cent spending surge and 2012 per-capita spending of $1,927. Thompson was 17th with an 11 per cent hike and per-capita expenditures of $1,580.
Thompson was also named the province’s fifth-biggest spender for 2008-12. The northern city overspent by $9.5 million, or $712 per-capita, according to the report.
The biggest overspender was Gimli, which exceeded CFIB’s standards by $5.9 million, or $1,017 per-capita.
The 12-page report advances a series of recommendations to all Manitoba municipalities to achieve sustainable operating spending.
For one, municipal operating spending hikes must be held at the rate of inflation plus population growth.
The report further calls on municipal governments to ensure public sector compensation growth is sustainable and aligns with private sector norms.
That means restricting wage increases to the rate of inflation and making new hires pay into their pension plan, among other steps, the report states.
The report examined the finances of all Manitoba municipalities with 5,000 or more people.
A spokesperson for CFIB did not respond to an interview request.
