Kelowna tax hit proposed 6.48%

by Wayne Moore - Dec 7, 2007 CASTANET
As expected, Kelowna taxpayers will be facing a larger than normal tax increase next year. In his 2008 financial report for City Council, City Manager Ron Mattiussi recommends a Municipal tax increase of 6.48%. Over the past two years, the final budget which is approved in May, has been less than what was initially proposed. The 2007 increase was 2.81%, down from a proposed figure of 3.47%, while in 2006, the final increase was 2%, down from 2.35%.

"This year's budget continues to recognize the City's exposure to market and inflationary cost pressures that are consistently higher than general inflation as represented by the Consumer Price Index," says Mattiussi in his report. "The overall focus is on addressing the critical capital and operational needs that must be funded to mitigate the service gaps that are the product of Kelowna's continuing rapid growth." Mattiussi says the City is committed to resolving the gap through new strategies that will require moderate tax increases and continued prudent fiscal management. "While the 2008 Financial Plan is not able to reflect all of the many worthwhile identified needs, I believe it is important to continue to provide services, infrastructure and other amenities consistent with Council priorities that recognize the needs of a vibrant, dynamic and growing community."

Among the highlights of the financial document:

Parks and Recreation: Construction of the $44.1 million Mission Aquatic Centre began with removal of pre-load material in June, 2007. An associated average property owner taxation increase for 2008 of 2.8% is the first of a two-year phase-in, projected to be 4.91% in total.

Protection Services & Public Safety: A continuing community dilemma in addressing issues related to homelessness, drug addiction, crime rates and mental illness has resulted in concerns for those directly impacted. Funding is included in the 2008 budget to provide a greater police presence by adding six new RCMP members beginning May 1, 2008, ringing the total authorized strength at the Kelowna department to 139.

Transportation: Construction of Phase Two of the Central Okanagan Bypass from Spall Road to Highway 33 is not able to be funded in 2008. The cost is estimated at $10.2 million.

Debt Management: There was a conscious effort made to reduce annual general fund debt servicing obligations between the years 1999 to 2003 to better position the City to undertake planned large capital expenditures. Debt servicing of 4.7% of taxation in 1999 was reduced to a low of 1.6% of taxation in 2007. The new Mission Aquatic Facility will increase debt servicing to 3.7% of tax demand in 2008.

Mattiussi says the projected General Taxation Demand of $89.8 million in 2008, is up from $80.7 million in 2007. Kelowna City Council will debate the budget in detail Thursday, December 13. The final budget won't be finalized until May, 2008.