At the most recent meeting of council, Natalie Wehner, Chief Financial Officer submitted a report on how the district’s grant-in-aid and fee-for-service “have an impact on property taxation.”
In order to keep taxes manageable for 2024, Council decided to dip into the district’s surplus funds to cover these costs.
But, says Wehner, these are not essential services the district is providing. She quotes the Union of BC Municipalities (UBCM) document Local Government in BC – A Community Effort, which says “Local government provides and maintains the community’s basic essential services – clean water, garbage collection, sewer systems, roads and sidewalks, streetlights, and fire and police protection.
“Your local government may also provide other services including libraries, parks, and recreational facilities such as skating rinks, gymnasiums and swimming pools. Your local government also shapes your community through policies and land-use planning. Whether you live in a rural area, in a small village or town, or in a large urban centre, local government is responding to your community’s needs and planning for your community’s future.”
Wehner says that grants to organizations, free use of facilities, waiver of fees, maintenance costs for non-municipal services have value for the community, but they result in lower or lost revenue opportunities.
“Every dollar given out as a grant-in-aid or fee-for-service is paid through taxation,” writes Wehner in her report. “Free use of facilities is lost revenue. Permissive tax exempted properties are funded by non-exempted taxpayers. When District staff are maintaining buildings, campsites, and condos it takes them away from essential tasks which then leads to requiring additional staff to maintain those essential and nonessential tasks, those additional staff wages are paid through taxation.”
In Tumbler Ridge, she says, lost revenue opportunities and providing grants-in-aid and fee-for-services cost the district $1,417,341.24 last year, or 14.1 percent of the total taxes collected by the district.
This means, says Wehner, for every $1,000 of municipal property tax a resident pays, $141 of it goes to funding not-for-profit organizations. “When compared to other operating budgets the amount provided to not-for-profit organizations is more than the entire protective services and sewer services annual budgets combined,” she says.
Across the province, the average most municipalities spend is between four and five percent of the budget. “As the district provides over 2.5 times that amount it runs the risk of the district providing the majority of funding and entering into a related party situation for not-for-profit organizations.”
She says council “may wish to consider following what other communities that have a community forest and refer all grant funding applications to them for more of a hands-off approach and ensure the district is not funding groups through both mechanisms.”
She points out that the district is losing money through a variety of sources. For instance, the district’s current policy on advertising in the arena is to pass that money on to non-profits. That’s $20,500 in lost revenue for the district, says Wehner. The district also provides over $100,000 in VIP passes to the golf course and Community Centre.
And, when a group comes asking for use of a room or district asset for free, that costs the district almost $40,000.
Altogether, the district chalked up $275,003.55 in lost revenue in 2024, which would have saved the taxpayers about 2.75% in taxes.
In addition, the district leases land and space to a variety of groups—from the Grizzly Valley Saddle Club to the Community Arts Council to the Library—for $1 per group, resulting in $8 in revenue. “It should be noted that average monthly rental for commercial property in Tumbler Ridge is approximately $1/sq ft,” says Wehner.
The district also actively provides funding and services to not-for-profit organizations, at a total of $1,131,593.89, or 11.32 percent of all property taxes for “what UBCM classifies as services a municipality may provide.”
This includes things like the Lions campground at Flatbed. “In 2023 it cost district taxpayers $18,066.68 to operate the Lion’s RV Park,” says Wehner. “Since 2018 the Flatbed RV Park has cost the district taxpayers $138,733,51 to operate, equivalent to 1.38% of municipal tax revenue.”
It also includes Monkman RV Park, which generated a profit of $4,964.48 last year. “However, for the period 2018 to 2023 the Monkman RV Park cost the district $4,257.61 more in expenses than it earned in revenue.”
But, she says, the district also spent $209,353.20 on the Visitor Information Centre, 220,000 on the Museum, $29,761 on the Forever Young Society, $10,000 on Meals on Wheels (administered by the Lions Club of Tumbler Ridge), 41,400 on the Tumbler Ridge Youth Services Society, 6,431.22 on a condo for Northern Health, and 444,332 on the Tumbler Ridge Public Library.
She says that if a municipality does ensure essential services are maintained, “they are at risk of the Province appointing a Provincial advisor to work with staff and council.”
She says that as the district moves forward, it will mean council will have to make some difficult choices.
“Council may wish to refer to the basic essential services that a municipality must provide vs non-essential services that a municipality may provide to assist them in the decision-making process.”
That’s all fine and dandy, says Councillor Norbury, but the report misses something important. “I think it misses the cost saved by having our volunteer run multiple events in our community,” he says. “Volunteer who work at the RV park, volunteers who oversee large organizations, saving the district administrative costs.”
He points to the mission statement, printed at the top of every council agenda: council is committed to the excellence in government that reflects our citizens and its interests, values and goals.
“Their interests go beyond clean water, garbage collection, sewer systems, roads, sidewalks, street lights and fire and police protection,” says Norbury. “When was the last time you heard people bragging about garbage collection services in their community? But I tell everyone about the amazing museum I visited in Drumheller, the zoo I visited in Calgary, the visitor centre when I went to Whistler that provides services in multiple different languages, or the warm and welcoming Prince George Public Library that I attend when I’m at their conference centre.”
He says the role of the municipal government is not just to provide basic services, but to create a place where people want to live. It is to foster, not destroy, community, a community that “serves the social well-being of people. I would consider that an essential service. Something that is missed by people who fly in and fly out of a community.”
And the heart and soul of a community? “Non-profit volunteer run organizations,” says Norbury. “Without them, all we are is a bunch of infrastructure. Tumbler Ridge was created uniquely. It has a large catchment radius to get taxation revenue from industry to help pay for the high level of services. 81 percent of our taxation is provided by utilities, light and heavy industry and we’re not including gas tax and other government transfers for which we receive capital projects.”
He says that one of the things the report does is highlight the loss of revenue. “But how much of these services would not be provided to the community if these groups weren’t here? We don’t charge for a room rental. If we did, would it actually be rented? I mean that’s debatable right?”
He says more important than the potential loss of revenue, is the potential loss of services to the community. “How much would it cost for the district to provide the services non-profits provide for us? Executive directors, clerks, other workers all work for less than employees of our district do. We’re saving money by having these organizations. By having them chasing their passions to offer a service, versus higher pay found elsewhere. The teen center, the daycare, the Lions Campground…they were all run by the district at one point. There’s a reason why we have non-profits running them. They cost less than if we were to run it.”
And if the issue is lost revenue, he asks how much would be lost without these organizations? “How many businesses make money due to the increases in traffic brought in by our visitor center, our museum, our ATV club? These organizations have an economic impact that is not listed in the report. How much value do we generate by investing in these organizations?
“By supporting the Visitor Centre, we support the geopark. They bring almost two hundred thousand dollars in additional funding into the community. Money that is spent in the community directly to our businesses. The museum, same thing. We invest two hundred twenty thousand dollars we get hundreds of thousand dollars in additional funding by having them here.”
One of the issues raised in the report, he says, is lost revenue by giving out free facility passes. “We give them to our doctors, we give them to search and rescue and to their families. You know having a gym, having a pool, having a golf course, these are all fixed costs. We do not pay a variable cost per use per member, other than a potential unrealized loss of revenue from them not having to buy a facilities pass. The only way to reduce those costs would be to reduce services.”
Councillor Guilik says she’s not sure where Councillor Norbury is coming from. “The issue or purpose of this report was to provide Council information on grants and services provided by the District of Tumbler Ridge that have an impact an impact on property taxation and to give us information prior to our budget deliberations to assist in decision making. I know this is something that I’ve asked for numerous times.
She says it’s not about looking at cutting funding to non-profits. “It’s about us making sure that we’re doing our job as council, which is to be in charge of the expenditures. We are supposed to be here to manage the money. So if I say ‘ we should just give this out to whomever,’ well then I’m not really doing my job if I don’t know how much that is.”
That said, she thinks it is important to know that the district is providing over 2.5 percent the amount that other municipalities are providing. “That would be $540,000, not the one point whatever million we do. We run the risk of the district providing the majority of funding and entering into a related party situation for not-for-profit organizations. Which means if I understand correctly, then that non-profit has to be attached to the district of Tumbler Ridge which means a whole other big box of issues.”
She says she doesn’t see the report as saying the district shouldn’t help non-profits, but just as information needed to make knowledgable decisions. “1.131 million for not-for-profit organizations? That’s a lot of change and we aren’t going to find that in the couch cushions.”
Mayor Krakowka says the report does show transparency on behalf of the district back to the taxpayers. “It’s not about ‘should we support certain organizations?’ or whatever. It just shows that maybe when we do a fee-for-service or a grant-in-aid for a certain amount during budget time, there’s hidden costs that we weren’t seeing. It’s not about whether or not we should we support certain organizations, because I think this community was built on not-for-profits and volunteer hours. The sweat and the volunteer hours and the tears that go into stuff like building the fairground. I think it’s just about being transparent to the taxpayers that show that we may do a fee for service or a grant and aid but we also have fees that weren’t out during budget discussions.”
“Councillor Norbury brought up the fact that we give out complimentary passes. If there’s nobody in the pool what’s the cost to run the swimming pool? We still have to heat it, we still have to circulate water. It doesn’t matter if there’s one person in there, or there’s nobody in there or there’s 30 people in there. It costs the same. You have to have two lifeguards on duty. There’s still a cost to run that pool no matter what if there’s anybody using or not using it, so when we talk about passes to our medical professionals and RCMP and firefighters and stuff like that, to me that’s important. I remember when I first joined council and the amount of times that we were short staffed at the health centre…I think it’s helped, when I’ve talked to some of the agency nurses that come to Tumbler Ridge, they talk about it to other nurses or doctors about what they received when they came to Tumbler Ridge for two weeks. I think it’s important but I just want to make sure that we see it in a report.
Councillor Noksana says the volunteers have made the community what it is. “Our volunteers have worked very hard for our community and while I see Tumbler Ridge pays a lot more out in fee-for-service and grant-in-aid than other similar communities, it also shows how much better our community is. It’s really exciting to see what our volunteers have brought to a town built mine coal into what we have now. It wouldn’t even have been possible without them. I like reports like this. I like the data. I like the numbers.”
Councillor Hofman says he’s never going to argue with good information, but he says Councillor Norbury has hit an important point. “The dollar cost of something versus the benefits is not a straight comparison. You’re not counting the expertise and hours of our volunteers with these numbers,” he says. “I think that’s core here. What I don’t see—and I don’t expect staff to have accurate numbers for—is what it would have cost us if we were to have the same level of service. What if we were running it ourselves and all of a sudden we take it out of grants and we put it under operating budget to keep the same level of service? I would argue that there’s a whole lot of savings we’re not seeing here. Just taking one example. Our Youth Centre. I see that we have a dollar lease for the land. I don’t see what we would think that we would be getting for revenue for that. I don’t see what it would cost for the town to run it as well as what’s being done by volunteers. It’s really hard to come up with evaluation of what these services add to the town.
“And the 14 percent number without a more direct comparison of what a typical town that spends 5 percent? I don’t know what an average town provides. I haven’t lived in a whole bunch of small towns to see the level of services. I’ll tell you I’m happy with this town I like what we do here and I like the level of service and I like how proud people are to be from Tumbler Ridge. I would like to continue doing that. I think it’s good to have these numbers in mind when we are doing our budgeting, but it speaks only to our costs and not our value and unless we have a good way to evaluate the value of what these organizations provide, I’m going to be quite defensive of these when it comes to budget time.
Councillor Gulick says she agrees this is a great town. “We have a great community. We have a tonne of volunteers. We have a tonne of things that would not have happened without volunteers but we need to keep in mind that this report is for information so that when we are making the decisions of whether or not we can turn the water on and the sewers going where the sewer supposed to go… those aren’t the fun and shiny things but those are the most important parts because you can bet your butt if the water doesn’t turn on or if the water is gray when it comes out of the tap or my sewers not working, we’re going to have a lot of angry community members. I just want to make sure I think it’s really important that we make the point that this is for information this is not taking a shot at non-profits. This is not anybody in this room saying that we’re looking to shut non-profits down or to not fund non-profits, it’s about making sure that when we make those decisions that we have the very best information that we can have.”
In 2024, taxes went up for all applicable categories, including residential, by ten percent. But spending was on target to go up 13.8 percent. The 3.8 percent shortfall was taken out of the district’s reserve funds.
However, that means council starts next year’s budgeting talks with a 3.8 percent increase to cover that amount. And, with taxes expected to go up by 6.5 percent to cover the new collective agreement and other increased expenses needed to run the district, that puts council looking at a ten percent tax increase before any new spending for capital projects.
Actually, that’s not true, says Wehner. “Realize there’s inflation, so there’s a chance the 3.8 percent from this year will be 4.2 percent next year.”
Councillor Gulick says the information in the report is important for the non-profits as well. “When you as a non-profit look at your own books—and I’ve sat on a lot of boards so I get it—look at your books and realize what it would cost if you weren’t getting the grants. And they can ask: ‘is the work that we’re doing valuable at this point? Are the headaches and the tears worth it?’ These numbers also help each non-profit look at their operations and see what they’re looking like: ‘what would this look like if we had to pay tax? What would this look like if we had to be responsible for the mowing?’ The lease thing is import and, because what happens if a non-profit folds, and then we have to do a cleanup? As much as I support the non-profits, we still need to make sure that we’re mindful of these things.”
Zena Conlin, Executive Director for the Tumbler Ridge Museum says she found the report and the discussion about it “interesting.” She’s glad that the discussion provided clarity on the intent of the report.
“The Tumbler Ridge Museum appreciates the recognition from the Mayor and some Councillors that the report doesn’t reflect the true value of Tumbler Ridge not-for-profits in terms of volunteer hours and the savings the district makes by not having to run these services themselves.
“It also doesn’t reflect the external funding support the not-for-profits bring into the community. The Museum has been successful in securing provincial and federal grant support of one million dollars that were invested in facility improvements alone, and we are currently working on plans that will potentially, and hopefully, invest many millions more. I would argue that negates any imaginary amount they propose they’re losing in rent.
“I feel strongly that if the intent is to provide taxpayers ‘honesty and transparency’, which I fully agree with, they also need all the information. This is something I will continue discussing with our Board to develop a plan on how we can better assist the district in addressing taxpayer concerns.
The Saddle Club is one of ten not for profit groups in town that leases land or space from the District for $1, according to report to council.
Trent is the publisher of Tumbler RidgeLines.
