Councillors sharpen knives for budget deliberations

Bruce Walkinshaw - Penticton Western News Published: January 20, 2011 6:00 PM
Penticton council resumed its line-by-line budgeting Wednesday morning, continuing its efforts to pair down the city’s $870,000 shortfall.  Council highlighted about another $127,000 worth of items for elimination from the budget, bringing the total so far in its 2011 deliberations to just over $288,000.
Despite his absence, the meeting ended with a lively discussion surrounding Coun. Mike Pearce’s proposal from last week to cut this year’s $857,000 contribution to the $2.95 million equipment replacement reserve by $300,000, even though the city is projected to spend $902,000 replacing items from vehicles and equipment to roof-top units.  City treasurer Doug Leahy asserted the idea would be an imprudent and unsustainable way to balance the budget.  Noting council already took $400,000 out of the reserve last year, Leahy said that currently, even with the $300,000 in place, by the end of 2015 the account will only have a balance of about $1.165 million.  Coun. Dan Albas asked Leahy whether reducing the replacement reserve by a lesser amount could be done in a reasonable manner.  “I would like to know what that number is,” said Albas. “Is it $100,000? Is it $200,000? Or is it $50,000? I would like to know what level of recommendation you would make for that.”  Leahy said he thinks the reserve is already too low.  “I understand where you’re coming from,” countered Coun. John Vassilaki. “We have to put funds aside for the future. I understand that. But what about all the people that are out there? What about their future? “I know of lots of people that go borrow money from the bank in order to pay their taxes because they can’t afford them. They are on fixed incomes. So it is up to us … to relieve them of some of that burden.”

“And I totally get that,” responded Leahy. “The issue, though, from our point of view in administration is that we must look after the City of Penticton’s financial future.”  To not look into the future and just worry about today would be a “very questionable” financial and strategic decision, Leahy said. Council opted to wait until budget deliberations reconvene on Monday, presumably with Pearce in attendance, before voting on the matter.  For a list of all the items cut from the budget on Wednesday, see the story at www.pentictonwesternnews.com.