Council limits tax hike to 2%

Jason Luciw - Kelowna Capital News Published: March 26, 2009

A decision to reduce this year’s tax hike from five to two per cent is a matter of principal, according to West Kelowna council. One by one, with the exception of Coun. Rosalind Neis, councillors repeated the message that the present recession demands that the District of West Kelowna show some fiscal restraint. Coun. Duane Ophus’ comments at a meeting Tuesday night, best summed up the majority of council’s sentiments. “It’s really important at this point in our history that we send a signal to the community that we are very financially responsible,” said Ophus. “Obviously, we wouldn’t do it if it had any true negative (effect) on our financial position, but that’s just not the case.” It would be inappropriate to tax today’s taxpayers excessively for something that may or may not occur “somewhere down the road,” said Ophus.

Last year, when economic times appeared brighter, council was championing five per cent tax increases every year to bolster reserves to approximately $35 million by 2013, with the aim of offsetting foreseen cost increases in areas such as policing and road maintenance. The district is currently getting a multimillion dollar break on those items under a provincial agreement that is helping West Kelowna transition from a rural area to a self sufficient municipality. Chief financial officer Jim Zaffino explained that reducing the tax hike to two per cent this year would have a compounding effect over the next five years, leaving the fledgling municipality with only $30 million in reserves by 2013. Coun. David Knowles said that was still a “tremendous” amount of money for the municipality to be saving. That’s provided the municipality doesn’t draw down reserves for unforeseen projects, commented Neis. “There are costs that are coming down the road and from what I’ve heard from people, the more we save now, the better off we’re going to be.”

When phoning constituents to get a sense of what they wanted this year, however, Knowles said most people told him they would be happier with two per cent for this one year. Council can return to five per cent increases next year, in an effort to further bolster reserves, said Knowles. When it comes to taxes, the municipality usually talks averages to give everyone a general idea of the increase they’ll be facing. A home valued at a little more than $450,0000 is the average assessment in West Kelowna. Under a five per cent tax increase, residents would have been paying about $1180 on the municipal portion of taxes this year, or $56 more than in 2008. With a two per cent tax increase, residents are paying $22 more in taxes this year. That leaves about $34 in a taxpayer’s pocket this year.