By Kim Burden
Parksville Qualicum Beach News
Published: September 24, 2013 11:00 AM
There is a business model that seems to be gaining traction that I strongly suggest you stay clear of. The model could be called the overinflated model.
The principal is to calculate your operating costs and then divide it by the number of customers you think you may have and that is the product price. If your customer number is low it doesn’t matter, you just increase the unit price to ensure you cover your operating cost.
Sound familiar? It should. BC Ferries have continued to increase its prices even when the number of passengers using the service is dropping and now the City of Parksville is exploring the concept for its proposed development cost charges (DCC) bylaw.
In 2008, the city increased the DCCs and ended up with 40 per cent less revenue than they had projected. Why? Development dollars are mobile. We are surrounded by cheaper development and building costs in the Regional District of Nanaimo and while people living in the regional district do not receive the same quality of services (snow removal, etc.), they do have access to the same parks, libraries, recreational facilities and many other services that are available to Parksville taxpayers.