Financial Health: Parksville versus Qualicum Beach
Local governments have now completed their annual reports and Statements of Financial Information (SOFI) as required by the province. Often you will see economic reports that compare financial positions of major urban centers, but I have never seen a smaller community focused comparison approach. Clearly the amount of money involved and the size of the audience is greater in the bigger cities and hence they get the attention. Presumably the matter is just as important to residents of smaller communities and few have the ability to wade through these type of documents to make comparisons.
The SOFI reports are useful because they set a common reporting standard as required by the province. From this we should be able to compare towns of similar size both geographically and by population to get a better understanding of their financial effectiveness and resiliency. In this article, I will attempt to compare Parksville and Qualicum Beach. Full disclosure, this is not an exhaustive comparison, but rather, simply a comparison at a single point in time of key statistics as reported by the municipalities themselves.
Why is it important?
Financial resiliency is defined as a local government's ability to anticipate, absorb, adapt to and recover from financial volatility while continuing to deliver essential services to both now and in the future. My own interpretation of financial resiliency also includes consideration to the taxpayers ultimate ability to sustainably absorb increasing costs. Financial resiliency protects property taxpayers from unpredictable tax shocks which place strain on family budgets and effect over-all community affordability.
How do you measure financial resilience at a municipal level?
Measuring resilience requires an evaluation of various components of a municipality's finances.
There is no formal legislative process for this, so I will pose some questions and illustrate some comparisons for our readers to consider.
Firstly "Which of our two municipalities ( Qualicum Beach and Parksville) is in a better position to absorb unexpected costs or revenue losses?" To answer this question, I have considered both liquidity and reserves.
"Net Financial Assets" represents the difference between financial assets and total liabilities. On this measure, Parksville is in a significantly better position with 3.5 times the net financial assets to cover the unexpected, compared to Qualicum Beach. This is the case, even when adjusted for population. I looked at Ladysmith as well which has 1.8 times the net financial assets.
Parksville | Qualicum Beach | Ladysmith | |
Financial Assets | $ 105,336,790 | $ 25,615,899 | $64,176,102 |
Financial Liabilities | $ 37,664,560 | $ 12,459,155 | $40,335,291 |
Net Financial assets | $ 67,672,230 | $ 13,156,744 | $23,840,811 |
Population 2021 census | 13,642 | 9,303 | 8,990 |
Net financial assets per person | $ 4,961 | $ 1,414 | $ 2,652 |
Reserves and accumulated surplus
Overall accumulated surplus which includes the various operating surplus funds, reserves and money already spent for land and buildings, equipment etc. is not a particularly useful comparison of the ability of municipalities to deal with up coming expenses and the unknowns. For a more meaningful comparison, it is prudent to remove the investments already made, or money already spent, to acquire tangible capital assets.
Comparison of accumulated surplus less investment in Tangible Capital Assets | ||||
Parksville | Qualicum Beach | Ladysmith | ||
Total accumulated surplus | $283,763,146 | $169,861,545 | $146,412,270 | |
less Tangible capital assets | $210,871,831 | $153,746,412 | $107,911,628 | |
Net surplus and reserves | $72,891,315 | $ 16,115,133 | $ 38,500,642 | |
4.52 times | ||||
Parksville is in a much stronger position with 4.5 times the money available for replacements, repairs and to invest in new infrastructure or programs.
Some readers may think Qualicum Beach can restore reserves when the proceeds of the Eaglecrest land sales are eventually received. Even in the event Qualicum Beach can sell the Eaglecrest properties for the expected appraised value of $13 million, the town has subsequently increased their proposed spending to in excess of $21 million from this source. Rebuilding of reserves cannot be assured from land sales alone. Building reserves is likely to be protracted and may rely on increasingly higher tax increases. It is important to note that the category "net surplus position" is not comprised of just the money in capital reserves. It includes approved, but unspent grants, and various operating surplus fund accounts.
When I saw the disparity in the amount held in reserves, I questioned whether perhaps Parksville has more buildings and recreational assets that they operate and hence the disciplined approach to squirrel away more reserves. To answer that, I compared total tangible capital assets (land, buildings equipment, roads, pipes etc.)
Parksville | Qualicum Beach | ||
All in net book value tangible capital assets | $215,873,211 | $ 156,218,703 | |
Capital assets per person | $ 15,824 | $16,792 | |
Net surplus and reserves | $72,891,315 | $ 16,115,133 | |
Ratio of net surplus and reserves to Net book value of capital assets | 33% | 10.3% | |
This shows that the Town of Qualicum Beach actually has more money invested in tangible capital assets on a per capita basis than Parksville, by a margin of $968 per resident. One would expect the opposite given that Parksville covers a larger geographic area than Qualicum Beach so roads and pipes should be more extensive. In delving into the makeup of these tangible capital assets, I confirmed on a per capita basis, Parksville has $2276 worth of "Water assets" versus $1255 in Qualicum Beach. I also looked at "Sewer Assets" and again Parksville has $793 versus Qualicum Beach at $541 per capita.
This leads to the conclusion that Parksville has more critical infrastructure assets per capita, yet holds less overall tangible capital assets. It would appear that Parksville has focused their investments on critical infrastructure. Further, the ratio of Reserves and Surpluses versus Capital Assets shows Parksville at 33% coverage is in a much stronger position than Qualicum Beach with only 10.3 % coverage.
Since Parksville is in much better shape with respect to reserves and surpluses, I next looked at taxation, assuming that Parksville may be taxing at higher levels and that this is contributing to their positive financial position. Ignoring the value of individual homes and simply comparing the amount each municipality is collecting from their population is a reasonable benchmark to measure the effectiveness of overall municipal management. (I have intentionally not used assessed values as that would be more appropriate if we were looking at the distribution of taxes rather than the total sum of taxes.)
REVENUES | Parksville | Qualicum Beach | ||
Net taxation for municipal purposes | $ 21,509,201 | $15,807,436 | ||
Net taxation per person | $1,577 | $1,699 | ||
Based on 2025 SOFI, Parksville is not taxing at a higher rate and it would appear that Qualicum is taxing at a rate of 7.7% higher on a per capita basis. Other notable differences show up in revenue categories that one would expect to be relatively stable year to year.
Other income | Parksville | Qualicum Beach |
Sales of services/fees charges | $13,871,404 | $4,172,963 |
Other revenue from own sources | $ 412,345 | $1,831,492 |
Interest earned and tax penalties | $3,344,707 | $949,336 |
sub total | $17,628,456 ($1292 per person) | $6,953,791 ($747 per person) |
Parksville generates significantly higher sums from sales of services and users' fees. The high level of reserves also provides an opportunity to earn greater investment revenue. Clearly Parksville is more effective in having users pay for services. (Neither municipality provided any notes/details with respect to other revenue income category.)
The disparity in revenues between the two municipalities led me to consider how they compare on the expense side. Here I have considered a few key expense categories starting with wages as that comprises the largest component of operating expenses for municipalities.
Parksville | Cost per person of pop. | Qualicum Beach | Cost per person of pop. | |
Total wages + benefits | $13,098,218 | $960.14 | $9,175,192 | $986 |
Council salaries | $280,454 | $221,840 | ||
Council expenses | $26,610 | $37,383 | ||
Sub Total | $307,064 | $23 | $259,223 | $28 |
Qualicum beach residents pay slightly more for staffing costs than Parksville, when adjusted for population. Equally enlightening is the cost of running our 5 member council versus Parksville at 7 members. It would appear that the population of Qualicum Beach is not at the level that would justify a larger council.
Another area of expenses that stands out is in planning and development . It is no secret that Parksville has significantly more activity in new developments versus Qualicum Beach.
Parksville | Per population | Qualicum Beach | Per population | |
Planning and development expenses | $877,156 | $64 | $1,321,440 | $142 |
Qualicum expenses in this area are more than double even if you make allowances that bylaw enforcement may be included in this department whereas Parksville appears to include their bylaw function with protective services. The huge disparity in building development volume alone raises further questions as to Qualicum Beach's staffing cost in this area. A deeper look into this disparity is warranted.
Other areas posed variances and in the interest of wrapping up this article, I will highlight only two more.
Parksville | Per person by population | Qualicum Beach | Per person by population | |
Engineering and transportation expenses | $5,586,714 | $410 | $7,442,785 | $800 |
Solid waste expenses | $1,004,993 | $74 | $1,093,694 | $117 |
Qualicum operates an airport which may account for some of this disparity but Parksville, despite having a significantly larger geographic area appears to have significantly less expense related to this aspect of municipal service delivery. When it comes to solid waste disposal, Qualicum Beach is paying 58% more than Parksville when adjusted for population.
In conclusion, based on the few aspects I have looked at to this point, it is my opinion that Parksville is the clear winner in this comparison. Parksville is much better positioned to deal with uncertainty, with more reserves and surplus funds to draw upon to replace assets and deal with uncertainty as required.
As the election nears and politicking begins in full force, it is important to focus on the evidence and assess current and potential candidates on their real ability to contribute to overall municipal governance. Qualicum Beach with only 5 members on council increases the need to ensure that the future council as a group, has the breadth of expertise required to be effective in their role in all areas of municipal governance. One should ask "Is this in part, why we see the such disparity in financial position between the two municipalities?"
In the interim, Parksville residents can sleep a little easier at night.
Marie Noel
July 14th 2026
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