As a not-for-profit entity, Technical Safety BC operates within a long-term financial planning strategy, balancing the investments in the safety system over a period of years. A sustainable Technical Safety BC aims to deliver its 10-Year Strategy and vision: Safe technical systems. Everywhere. Prudent investment in employees, training, tools, and capital assets support our work in assessment, education and outreach, enforcement, and research, which is essential to achieving our objectives and advancing technical safety in the province.
This financial performance overview summarizes Technical Safety BC’s financial and operating results for the year ended December 31, 2019, and should be read in conjunction with the complete Management Discussion and Analysis and audited financial statements, which is in the full Annual Report 2019.
Total revenues were $70.7 million (an increase of 8% or $5.1 million over 2018). Continued growth in the construction industry, particularly in non-residential projects, led to an increase in installation and operating permits over 2018. Permit volumes were further supported by internal initiatives to increase participation in the safety system, including building relationships with duty holders, identifying unpermitted equipment, and compliance and enforcement activities. Investment income grew as a result of strong market performance.
Operating expenses ($68.8 million) grew by a modest 1% or $0.9 million compared to 2018. The organization continued to invest in technical programs in order to promote innovative and scalable safety solutions while providing consistency across technologies and enhancing our incident investigation expertise. We increased our innovation, information technology, and business intelligence capabilities in order to support the development of our client-centric service delivery model and our ability to predict safety system risks. We saw a significant reduction in our expenditure on facilities compared to 2018 when we incurred extra costs related to the office relocation from New Westminster to Vancouver.
The focus of our capital expenditure shifted from facilities improvements in 2018 towards investment in our information systems in 2019. We developed systems to allow clients to easily manage their non-compliances, built a platform for compliance and enforcement case management and laid the groundwork for our business transformation program. The scheduled replacement of older fleet vehicles was delayed from late 2019 to early 2020.
For the year ended December 31, 2019, Technical Safety BC incurred a surplus of $1.9 million of revenue over expenses compared to a deficit of $2.2 million in 2018. Revenue was higher than expected, both as a result of strong permitting volumes in the latter half of 2019 and high market gains from investments. Expenses were in line with budget.
The operating reserve increased from $5.9 million to $7.4 million, and represents 10% of the 2020 operating expense budget. This compares to our internal operating reserve target of 15%.