Shepherd stands behind city spending

Ron Seymour 2009-11-06 Kelowna Daily Courier:

It‘s unrealistic to expect a municipality‘s spending to match increases in the population and inflation rate, Kelowna Mayor Sharon Shepherd says. Between 2000 and 2007, the City of Kelowna‘s spending rose 65 per cent, while a combined measurement of population growth and inflation climbed 34 per cent, according to a study by the Canadian Federation of Independent Business. “This kind of spending is disrespectful to taxpayers and harmful to communities,” the federation‘s Laura Jones said Thursday. “It means property taxes and other municipal fees increase faster than the ability of residents and business owners to pay up.” In the federation‘s second annual survey comparing increases in municipal spending to changes in population and the inflation rate, 129 B.C. communities were examined. There was a rough equivalence in 34 communities.

Kelowna‘s “fiscal sustainability gap” was 1.9, meaning spending increased 1.9 times higher than inflation and growth. Prince George‘s was 2.9, the highest in B.C. But Shepherd said the survey doesn‘t take into consideration municipal spending increases can be driven by increasing public demand for services. “Municipalities look at the level of service their citizens want and demand,” Shepherd said. “Our budgets are based on the needs that have been identified.” For much of the period examined in the CFIB‘s study, the annual Kelowna municipal tax increase was less than half a per cent higher than yearly changes in the consumer price index. “We‘ve always tried to use the cost of living index as a measure when we‘re developing the budget and setting the tax rate,” Shepherd said. But total municipal spending did rise much higher than that because the city took in millions of additional dollars from the owners of newly constructed properties. Shepherd, who has been on city council for 13 years, said she occasionally hears from people about the tax rate when the city budget is set, but that it‘s not an issue that bothers many people.
“There are not that many complaints about our tax rate, honestly,” she said.