Penticton Western: September 16, 2008
In the city’s 2008 budget, general surplus is down a little, but city treasurer Doug Leahy says that’s par for the course. “This isn’t unusual,” he said. “If the city wants to hold the line on taxes, it’s certainly going to be a tight budget. No change.” Council adopted three pages of amendments to the budget on Monday. Usually, the city keeps $2.2 million in its surplus budget, but that is now down to just over $2 million even though the city used only $310,000 of the surplus funds this year instead of the $523,000 originally planned to be spent. “We adopt a budget in January, but we don’t use that particular budget to set tax rates until May,” explained Leahy. “We’re certainly hoping that we’re going to have more surpluses.” That could happen if current city projects come in on or under budget. “A lot of times when I present a budget forward, it’s a worst-case scenario. We’re certainly hoping we’re going to generate surpluses in various accounts in 2008.” Things are almost right on target, noted Leahy.
The city’s fiscal year ends Dec. 31. Jack Kler, the city’s director of corporate services, noted that the surplus account is one of several city accounts used to balance the budget which at the end of 2007 amounted to $39 million. While the city has plenty of money in other reserves, from an accountant’s point of view, it’s best that each fund is able to stand on its own. The amended 2008 budget will include $592,000 to retrofit the Penticton Community Centre with energy-efficient upgrades — possibly solar energy panels and more efficient light fixtures in the pool and gymnasium. That money will come from federal gas tax revenues.
The city has also finalized an agreement with Lake City Casinos which will contribute $30 million over the next 10-13 years for construction of the South Okanagan Events Centre. As Leahy said, the cost, which includes all the off-site work such as relocating recreation and ball fields, costs a total of $79 million. To accommodate that, property owners have had to pay very little more on their taxes. The SOEC’s share of property taxes is only 0.67 per cent of their property values which began to be collected last year for three years, and will go up another 0.67 per cent in 2009. The residential tax impact of SOEC this year is minimal. For example homeowners with a property worth $372,000, pay only $9.05 this year to support the new events centre. Owners with a home assessed at $501,000 will pay $12.18 this year.
A $2.2 million surplus fund would provide a good comfort zone, according to Coun. Randy Manuel. In the last quarter of each year, city council looks at all projects to ensure they’re on budget or to see whether they could come in under budget. As well, it is sometimes possible to delay some projects to the next budget year and pump up the surplus. The preliminary budget for 2009 will be discussed in depth in December. Currently, each department is putting its budget together — wages, office supplies, etc. — for 2009. By Oct. 15, all groups that receive grants from the city must have their requests in so they can be part of the overall document city council will debate. The city gets a little more than 16 per cent annually of Penticton’s Lake City Casino revenues. Most other communities in the province receive only 10 per cent, said Manuel. The City of Penticton receives between $2.3 and $2.4 million from casino funding, one-third of which goes directly to capital projects such as the SOEC. The SOEC will be paid off within 10 years, said Leahy. “It’s a very short time period. The casino money has helped us shorten the time period to 10 years.”
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