City of Kelowna budget defers large expenses

Monday, December 14th, 2009 | 8:30 pm By Adrian Nieoczym Kelowna.com

Kelowna city staff are recommending council approve a budget which will limit next year’s property tax increase to 1.2 per cent without reducing service levels. But limiting the pain this year may simply mean more pain in the future. “It’s really a deferral,” said city manager Ron Matiussi, who provided council with a verbal update on the budget this afternoon. “This is a recognition that in the community there are sectors of our community that are hurting [because of the recession.]” The 1.2 per cent tax hike will mean an increase of about $19 for the average homeowner whose home has an assessed value of $486,000. To keep the increase down, city staff are recommending council hold the line on service levels, which would include rejecting an RCMP request for more police officers.

But it also means not putting as much money into reserves for future projects, including the city’s pay-as-you-go capital expenditure program. Council policy is to try and put 50 per cent of the revenue generated by new construction into the program, an objective which has not been met for several years. “Over time, we know in our infrastructure plan that we could have something like $340 million that we’ll need [to spend] to replace the waste water treatment plant in year 20 and all those types of things. And so it’s really trying to keep pace with our projected costs and put money aside in those reserves,” said Matiussi. “Over the last number of years we’ve been eroding that.”

As Kelowna grows, so too does the demand for services and the impact on municipal infrastructure. By putting money away in the expenditure program, it spreads the cost of dealing with that growth over many years, “so that no one council is faced with…a 25 per cent tax increase to pay for some major facility,” said Matiussi. “Things are going to happen so some council at some point in time will be paying for it.” The final tax increase for next year is still subject to change. Council has the last word and will hold an all day public session dealing with the budget on Thursday.