Taxpayers facing prospect of 5% hike (Penticton)

By John MoorhouseTuesday, December 19, 2006, http://www.pentictonherald.ca/article_2668.php
Penticton taxpayers could be hit with a five per cent tax increase, plus a $57 jump in average water rates and $18 in electrical rates next year.That's the major monetary impact of the proposed financial plan outlined to city council Monday. However, council members emphasized these figures could change once 2007 budget deliberations begin next month. The budget must be adopted by mid-February.City treasurer Doug Leahy said $60.6 million in general capital expenditures are on the books for next year, including the South Okanagan Event Centre."The costs of this project will be refined in January and presented to council in their entirety," he said.The city intends to divert $2 million a year from its electrical utility to help pay for the event centre. Leahy noted this will result in numerous other projects being deferred, although council has not determined which projects might be affected.Debt financing for the event cent will account for 0.6 per cent of the five per cent tax hike. A further 0.6 per cent is earmarked for debt servicing on the Fairview Road-Industrial Avenue intersection project now underway, with 1.8 per cent in a general increase to maintain service levels and 2.0 per cent for inflation.Mayor Jake Kimberley defended the proposed tax hike, noting the event centre will have a relatively small impact."Five per cent is minimal compared to some other municipalities," he said. "Considering we're going to be entering a major project in the city in the upcoming two years, I think it's still a fairly low percentage increase."A design-build contract for the event centre with Giffels Partnership Solutions Inc. could be signed as early as this Thursday. However, city administer Leo den Boer emphasized that date is not yet certain. Council held further discussions on the event centre during its closed door in-camera session.Other proposed capital expenditures for 2007 include:- City vehicle purchases (fire, utilities and general) -- $1,467,000- Road recapping -- $600,000- Integrated waterfront upgrade -- $530,000- Penticton Creek restoration -- $340,000- Skaha playground upgrade -- $175,000- "Bulb out" crosswalks on Lakeshore Drive -- $150,000- McLaren Arena boards -- $150,000- Skaha Marina parking upgrade -- $140,000The city's operating expenses are budgeted to rise to $36.3 million next year from $31.9 million in 2006, including an extra $610,000 in policing and fire protection costs. Two more members were added to both the Penticton RCMP and fire department this year, with an additional police officer to be hired on July 1, 2007.In addition to the general tax increase, the draft budget includes a call for a 21.5 per cent increase in water rates, largely to pay for the Naramata Road water line upgrade (11.5 per cent) and to increase the utility's reserve fund for a proposed future expansion of the water treatment plant. This translates into an increase of about $57 a year for the average residence.The city will also pass along a 2.1 per cent rate hike in electrical rates proposed by FortisBC, equal to about $18 a year.Coun. Dan Ashton noted the draft budget includes some substantial increases and predicted there will likely be some council "arm twisting" when the budget debate starts in January.Kimberley said with increased tax revenues expected from new developments in the city coming on stream, the tax hike might be partially offset in the next few years.The mayor also plans to meet today with Okanagan-Coquihalla MP Stockwell Day to discuss federal gas tax revenues. Penticton is rated as a "Tier Two" community within the tax rebate program which limits use of the revenues to specified project areas.