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City gets high marks in report |
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Written by Gerald Gauthier LETHBRIDGE HERALD
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Tuesday, November 24 2009, 8:50 PM |
While spending by Alberta municipalities has outpaced population and inflation growth by a wide and unsustainable margin, Lethbridge has done better than most cities at keeping spending in line, according to a new study.
Province wide from 2000-2007, population and inflation grew by 45 per cent, but in the same period municipal operating spending grew by nearly 73 per cent, according to the second annual Alberta Municipal Spending Watch report released Tuesday by the Canadian Federation of Independent Business. The report found municipal spending was an average of 1.6 times higher than population and inflation growth in that seven-year period.
Among the province’s 18 cities, the average gap was even higher, with spending at 1.75 times the rate of population and inflation growth. The gap was significantly smaller in Lethbridge where spending was 1.25 times population and inflation growth.
Lethbridge was one of 11 Alberta cities which reduced what the report refers to as a fiscal sustainability gap between 2006 and 2007. The city’s sustainability gap in 2006 was 1.51.
“I’m pretty proud of the way we conduct our business in the city,” Mayor Bob Tarleck said after reviewing the report. “We’re probably one of the few cities in Canada that’s paid off its tax-supported debt. We’ve built up a system of reserves we draw upon when we need it.”
Among Alberta cities, Lethbridge was second only to Grande Prairie which kept its spending in 2007 to only 1.12 times inflation and population growth. In comparison, the sustainability gaps in Cold Lake and Camrose were 3.28 and 2.42 respectively. The gaps for the same year in Medicine Hat and Red Deer were 1.75 and 1.45 respectively.
According to the study, Lethbridge had 1,025 full-time municipal employees in 2007 which works out to 13 city workers per 1,000 population. Red Deer and Calgary, meanwhile, had 15 and 11 city workers, respectively, per 1,000 population.
“We saw some of this writing on the wall even two years ago,” Tarleck said.
“We haven’t filled many of our positions. We had budgeted positions based on the robust growth that was taking place in Alberta,” he said. “When we saw trouble on the horizon, we didn’t fill all those positions.
“We have a number of positions that are vacant to this day, and we won’t fill them until economic circumstances dictate.”
With wages and benefits comprising roughly 50 per cent of municipal budgets, the report questions why municipal workers in Alberta earn an average of 7.2 per cent more in salary than their private sector counterparts in the same jobs. When benefits are factored in, the difference soars to 31 per cent.
“That’s something that I think municipalities have to be aware of,” he said. “We’re bound by union contracts, but we’re also bound in some cases by arbitration agreements. Firefighters and police can’t go on strike but they can go to arbitration. But I think that’s an issue that municipalities are going to have to examine more carefully.”
Among the report’s recommendations is one calling for the creation of an independent municipal auditor general to oversee spending by local governments. Tarleck dismissed that idea, however.
“The province already has this authority. They don’t need a whole new level of bureaucracy,” he said. “If the (ministry) of Municipal Affairs feels at any point that we are not financially accountable, they have the authority to come in and do a supplementary audit.”
The report also recommends imposing limits on the number of civic employees, seeking ways to limit growth in spending on wages and benefits, and contracting out work wherever possible.
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