Photo: Mike Biden

An independent report ranked Penticton last in the Okanagan for municipal spending, but city staff say the report doesn't account for it supplying utilities, which almost every other city in B.C. doesn't do.

The Peach City was listed at 109 out of 152 B.C. municipalities in a study published by the Canadian Federation of Independent Business last week, which observed municipal spending between 2006 and 2016.

The report said Penticton increased its operational spending 28 per cent per capita in that timeframe, while the population only grew by one per cent.

In 2016, the operational spending per person in the city was $2,576 — nearly $500 more per person than the next-highest Okanagan municipality (Summerland, $2,084).

But chief financial officer Jim Bauer pointed out Penticton is one of only four municipalities in the province that supplies electrical utilities, which the city profits from. He said in 2016, supplying electricity to all residences and businesses accounted for $30 million of the city's spending.

"That's going to drastically skew the numbers," Bauer said. "In fact, when we sort of crunched the per-capita spending, if we took the electrical expenses out, that would move our per capita [spending] from about $2,500 down to $1,500.

"It paints a very different picture of Penticton, so I think that is one of their shortcomings just with regards to their methodology."

The CFIB report only included operational spending of municipalities, which Bauer said accounts for day-to-day costs to "run a city," including salaries, maintenance, operating public facilities and utilities such as water, sewer and electricity. 

Bauer added levels of amenities differ in each community, and in Penticton an amenity like the South Okanagan Events Centre will generally shift costs onto the city when other communities use it as well.

“If you’ve got a lot of amenities, your costs are going to inherently be higher than some of the other smaller municipalities that might use those services but don’t actually pay for them."

In terms of spending increases compared to population growth, the top-ranked Okanagan cities on the CFIB report were Armstrong (third in B.C.), Coldstream (13th) and Kelowna (19th). 

"Certainly prudent spending of taxpayers' dollars is something of great importance to us. We heavily scrutinize, through our budget process, any increase we're seeing," Bauer added. "We're constantly looking at making sure that any increases are absolutely critical."