Fact and fiction in municipal amalgamation

Cost comparisons knock holes in theory that we’ll save by having fewer councils

Old myths about amalgamation continue to circulate. One is that the number of local governments in Greater Victoria is slowing economic growth and that amalgamation would improve our economic prospects as a region.

This is a myth not backed up by research.

Studies of the relationship between local-government organization and growth do not find any consistent relationship between the two. In fact, some of the most dynamic metropolitan areas in North America (Seattle, Silicon Valley, Boston, Austin) have some of the most complex local-government systems.

Associated with this myth is that differences in land-use and development regulations impede growth, but to impose central-city land-use and regulatory processes throughout a diverse metropolitan area would be more likely to slow, not enhance, economic growth. Historically, most new economic growth, not just population, has occurred outside the central city, where less time-consuming regulations existed.

A second local myth is that percapita municipal expenditures in Greater Victoria (reported as $881 in a Dec. 4 letter in the Times Colonist) can be compared to those in Surrey ($532), implying that if we get rid of our 13 municipalities, per-capita expenditures will go down.

There is ample evidence that size of local government does not predict costs. More important, however, is that in B.C.’s regional-- district system, different municipalities divide their services to residents among local and regional governments differently, and comparisons must include regional-district expenditures and other large-spending regional entities.

For example, municipal, regional district and public-transit expenditures all must be taken into account.

A comparison of all of these expenditures for Surrey ($2,073 per capita in 2014) with Saanich ($1,985) provides a more appropriate comparison, as both are large suburban municipalities.

Taking the same costs into account for a small municipality, Metchosin, indicates per-capita costs of $1,470. One can be assured that Metchosin residents are not anxious to achieve Surrey levels of expenditure and the taxes that would go with it.

The important point is not that Saanich and Metchosin, both of which are smaller than Surrey, have lower costs of local-government services; it is that one must include all local-government expenditures for comparisons, not just what is in the municipal budget as reported by B.C. Statistics.

Another myth is that costs can be reduced by reducing the number of elected officials. Collectively, Greater Victoria’s 91 elected mayors and councillors govern not only municipalities but all Capital Regional District committees, boards and commissions, 12 governing boards where the CRD appoints representation and six other regional entities, including the Victoria Regional Transit Commission. The cost of this representation is less than one-half of one per cent of spending on local services.

With an amalgamation, most of a municipal council’s agenda and other governance decisions would have to be dealt with by staff, out of sight from the public, instead of by elected officials. To substitute paid staff for elected officials would be a major change in the representative political culture that exists in Greater Victoria without materially reducing costs.

Early in 2016, a monograph, Governing Greater Victoria: The Role of Local Officials and Shared Services, will be published by the Fraser Institute.

The report will provide an explanation of how local governments in Greater Victoria provide services and includes some comparisons to larger municipalities in B.C. The kind of information it provides is necessary for understanding the existing system and addressing some problems that really do exist in Greater Victoria.

Too many municipalities does not appear to be one of them.