The City of Prince George’s draft operating budget for 2025 projects a $11,959,141 increase in expenses and a $2,862,713 increase in revenue compared to 2024.
The draft budget and a high-level overview were presented to the Standing Committee on Finance and Audit’s Wednesday, Dec. 4 meeting.
Director of finance and IT services Kris Dalio said the city’s tax increases between 2021 and 2024 total a cumulative 18.32 per cent.
It’s roughly on pace with the Consumer Price Index changes over that time, which was a cumulative 17.70 per cent. The CPI measures inflation through monitoring the price of several household staples.
Dalio noted that municipalities have some similar purchases as households, like clothing and alcohol, but have other needs that households do not like policing, fire services and road maintenance.
That means that the CPI doesn’t necessarily capture what inflation is like for a city government.
Here’s a breakdown of some of the biggest changes from 2024 to 2025.
Expense and revenue increases
City staff’s report shows a projected increase in expenses for certain categories in 2025 compared to 2024.
The approximate totals for those expenses are:
- $7.98 million more for increases to salaries and benefits for city staff,
- $248,377 more for the Prince George Public Library,
- $1.2 million more for the city’s RCMP contract,
- $60,681 more in electricity costs,
- $83,170 more for natural gas costs,
- $23,638 more for water and sewer,
- $10,896 more for district energy,
- $616,064 more increase in debt servicing,
- $90,251 more in fleet expenses,
- $8,000 in one-time expenses,
- $1.5 million more for “other adjustments,”
- $700,000 more for snow control,
- $1.4 million for general infrastructure reinvestment and
- $300,000 for road rehabilitation.
Combined with a drop of almost three million dollars in projected contingency funds, the total increased expenses for 2025 are projected to be $11,959,141 higher than 2024.
Expected increases in revenue are also shown. Those approximate figures include:
- $1,300,000 in projected tax base growth (city staff expect the final figure to be lower),
- $591,969 increase in grants-in-lieu (money paid by other levels of government instead of property taxes),
- $175,000 in additional revenue from the 911 dispatch centre,
- $446,324 more from fees and charges,
- $217,000 more from investment revenue and
- $132,420 more from increased revenue.
Combined, that would mean a increase in revenue. To meet the $9,096,428 gap between the projected increase to expenses and the expected increase in revenues, the city would need to hike property taxes by 6.55 per cent.
Other projected spending and revenue increases
Some of those expense and revenue changes are broken down in the draft operating budget document. They include:
- $436,640 increase in road spending. This includes higher line painting, traffic control and road material cost increases.
- $331,576 increase in myPG grants and increases to the city’s “big four” arts service providers.
- $419,287 in increased software licensing contracts.
- $250,000 increase to the FortisBC operating fee provided to the city. Prince George receives three per cent of gross revenue from natural gas sales within municipal boundaries. This figure is projected based on 2024 totals.
- $109,750 increase in real estate lease revenue. This is partially driven by the city expecting 12 months of rental revenue from the Knight’s Inn housing project.
Road rehabilitation
The draft 2025 budget proposes an increase in the road rehabilitation levy be increased from $6.7 million to $7 million.
Director of finance and IT services Kris Dalio told the committee during the meeting that his team tries to provide a figure that would allow for 50 lane kilometres of road to be maintained each year. Currently, he said the city is seeing a year increase of five per cent per kilometre in its costs for asphalt, labour and fleet expenses to maintain current service levels.
Snow control
In 2025, city staff are requesting a $700,000 increase in the snow control budget from the $10.3 million put aside in 2024 to a total of $11 million. The 2024 draft budget proposed a snow control budget of $10.8 million before council removed a half-million during deliberations.
The most recent projection for 2024 snow removal costs is $9,820,962. However, Dalio said that projection was made before the snowfall during the last week of November.
“We’ll give you updated figures when the actual budget comes in January,” Dalio said.
However, if that figure stands, the $479,038 under budget would be added to the existing snow control reserve, leading to a year-end total of $2,715,966.
That would mean that Prince George has snow control reserve funds worth 25 per cent of its annual net expenses. City staff said that this will help mitigate risk in years where snowfall is greater than expected.
“Council may have the latitude to take a gamble again and reduce the snow levy and see how it works out,” Dalio said. “Again, you can bring in those updated numbers once we see a little bit more of December and how it plays out.”
Parks service enhancements
For the parks department, the draft budget says staff will propose the hiring of two additional arborists as well as purchasing a new bucket truck and chipper for them during budget talks in January 2025.
The equipment purchases worth a projected $701,500 are proposed for the 2025 budget while the $198,574 for the arborists would be accounted for in the 2026 budget.
Also to be proposed next month are the additions of these positions:
- $106,797 to hire a communications specialist,
- $108,278 to hire a recreation event co-ordinator for the parks department,
- $100,000 to manage staffing costs for Canada Day and other events in community parks and
- $112,424 to hire a parks planner.
Because these additions aren’t currently reflected in the draft budget, should council accept them during deliberations, it would increase the needed tax property increase in 2025 by 0.45 per cent.
A report from city staff said that each percentage point of increased tax levies is worth around $1,388,391 in spending.
Future years
On top of this year’s proposal budget, the document also showed early projections for the required property tax increases in the 2026 and 2027 budgets. Dalio said that for those years, the estimates are very high level at this point.
A 5.52 per cent property tax increase is projected for 2026 and 5.06 per cent in 2027.
