City Council could finalize its budget tonight

JOHN MOORHOUSE/Penticton Herald Monday, April 19, 2010
Penticton property taxes stand to increase 1.9 per cent this year, under the 2010 financial plan being presented to city council tonight. Debt costs for the city‘s $7-million debt on the $23-million community centre pool upgrade account for a 1.3 per cent tax hike alone. City treasurer Doug Leahy states in a report to be presented to council, the financial plan calls for the city‘s tax revenue to increase by $453,000 this year as the city addresses a “structural deficit” of $227,000. That‘s down substantially from the $1.2 million structural deficit when the proposed budget was presented in January. “A structural deficit occurs when expenses exceed revenues and cannot be addressed without addressing the various cost drivers across an organization,” Leahy explained. The city will save $640,000 in staffing costs due to the closure of the community centre for its year-long upgrade. There will also be a 25 per cent reduction in road improvements and the city will save $400,000 by deferring depreciation of its fleet of vehicles. The budget does not contain provisions for employee wage increases or cost-of-living adjustments. Mayor Dan Ashton admitted Sunday there are differing philosophies amongst council members and predicted some lively debate this evening as council is scheduled to adopt the budget in principle. The tax rate must be set by mid-May. Ashton said further budget adjustments could come in the months ahead as council looks to implement recommendations from the recently completed core services review. “The core services review is partly initiated and there could be more coming down the pipe,” he said. “That‘s not fully implemented.” Ashton said council has looked for cost-savings wherever it could, noting the budget deliberations were difficult. “Never in my history of being on council, has there been as much discussion, investigation and re-evaluation of the budget as there has happened this year,” he said. “It‘s a reflection of the times, it‘s a reflection of the economy here, and it‘s a reflection that things needed to change. That‘s what we‘re doing.” The mayor said a higher than expected operating shortfall for the South Okanagan Events Centre is also cause for concern. However, he is looking for improvement as the city works with private sector operator Global Spectrum to try to turn things around. Also on tonight‘s agenda is a final council decision on the fate of a proposed 13-storey highrise development in the 200 block of Haynes Street. Many nearby residents voiced their opposition to the project at a public hearing on April 6.