Campbell River council members and the Strathcona Regional District are not seeing eye-to-eye when it comes to allocation costs.
Campbell River has threatened to slash its contributions after the SRD's Feb. 19 meeting, dissolved into an argument over regional services and the cost of fairness.
Allocation costs are used for direct costs for specific service functions, and general costs (hydro, IT, building debt, etc.) that can not be directly allocated are accounted for in general administration, which are often allocated to shared services members.
“ To put this in perspective, let’s say the SRD’s total budget is $20 million or whatever it may be this year, we’re talking about the unallocated that can't be directly allocated towards it, which is about $2.8 million, said CAO David Leitch. "Anything over and above that you see is directly allocated, so this is not what we are talking about... I can't simplify it. It's about $2.8 million for admin costs and how that allocation is split."
The $2.8 million is broken down into administrative revenue, management services, financial services, corporate office space, human resources, information services, fleet, strategic initiatives, fiscal and capital services, regional fire, and the Strathcona Health Network. The majority of these categories use an assessment method to determine how they are funded, while some are activity-based (financial services), while others also receive direct allocation.
Of this $2.8 million, Campbell River contributes $1.6 million, or 56 per cent.
Gerard Whalley, who was a director at the SRD when it was formed in 2010, said the formula was founded then by the CFO at the time, who was also a CFO at Campbell River.
"She came up with a new system that would reduce Campbell River's budget and download it onto Electoral areas. At that time, the municipalities were delighted, and that's what happened. So, it's up for grabs again," said Whalley.
Leitch acknowledged that Campbell River is the largest partner in the regional district, thus their assessment is the highest.
"There's no real measure of the equity or use of resources for those. It's just when you take assessments, you say you're community is valued at this and that's the percentage you're getting paid. There is no correlation to the measure of use," Leitch explained.
Campbell River residents pay $88.14 per year for the SRD's administration costs, the most of any other municipalities and Electoral Area A. Areas B, C, and D residents pay more. Citizens of Electoral Area D pay the most at $208.34.
Campbell River Mayor Kermit Dahl is flirting with slashing the city's contribution by 82 per cent at the next SRD meeting after the majority of the Campbell River-based directors voiced their opinion that Campbell River doesn't receive a lot of regional services and that Campbell River is paying for services outside of their area.
"I've been struggling with this place, you know," said Campbell River Director Ben Lanyon, who has been on the board for two years. "I've been questioning the value that is being returned to the taxpayers of Campbell River, and there's a few sources of that consternation, and I feel like in some senses, it's a value clash on certain things. You have a certain portion of the directorship that is more climate activist, you have some that are more job and industry-focused. I think we can all share that we have a housing concern though. But even so, I see some areas not approving things that I would have approved. Overall, I see us moving at a snail's pace. I see individual areas seeking their own interests and generally just ignoring the regional interests.
So, the only value that Campell River will get to justify the level of its participation in this admin budget is the utilization of the SRD for added services. We've seen total opposition to those. We haven't been able to do anything. I've seen some strange voting dynamics where it's really the tail wagging the dog in a lot of cases."
Lanyon went on to say the majority of the SRD's meeting agenda focused predominantly on electoral area business, which was "understandable because you don't have your own local government to handle most of your issues."
"If we are talking about who should pay what, I agree, (that) fairness is very hard to achieve. You can define it as who gets the value, or you can define it as who is consuming. I think in both of those cases, the area directors are consuming a disproportionate amount, at least in comparison to what's being paid."
Lanyon then warned the electoral directors, saying Campbell River would consider budget reallocations and "almost certainly will enact them," saying that this was their chance to discuss the situation. If they defer (to discuss it at the next committee of the whole meeting), there just "won't be as much discussion as perhaps you think there will be."
"Deferral is pointless. Deferral won't help. It won't change what happens in the end."
Director Doug Chapman, also of Campbell River, agreed with Lanyon.
Whalley was in favour of deferring discussion to the committee of the whole.
"Let's defer this and go to the Community Hall and figure out some policies behind what we're doing," he said.
"Those who are worth more, who have more, pay more. You guys with your property values are worth twice as much as most of these little areas. Of course, you're going to pay more. That's the way it's designed," Whalley said. "That's the way it's always going to be. Get used to it."
Director Mark Vonesch of Area B said what Campbell River-based directors said could be true, but they would like to see a report with the facts to allow them to make decisions.
"All we are asking is for more information... Where are the numbers around how it's unfair?"
Mayor Kermit Dahl said he had no problem with the deferral.
"Just be prepared on March 26 for me to make a motion to reduce the requisition requirements from the City of Campbell River by $1.3 million, and then you can figure it out because we are paying $1.6 million for administration costs that I see very little to no value in... We've tried to get value here by having regional services and for two years that's been defeated, so on March 26 that will change."
Vonesch admitted the meeting felt like a bit of a fight and that Campbell River was threatening to pull out.
In the end, the Campbell River directors voted against deferral, causing Leitch to say there was no point, despite a proposal for a committee meeting on March 5, which was declined by the Campbell River contingent.
Lanyon again mentioned ecological activism during the tail end of the meeting, saying he was seeing too much pressure from certain members of the board.
"I'm serious. You will shut down anything, any development, or any business that you can," he said before a point of order was called.
The meeting was called shortly after.
