City saves $2M from 2012 tax year

by Wayne Moore - Story: 91838 May 10, 2013 / 11:36 am
A lower than anticipated RCMP bill and higher investment revenues helped the City of Kelowna save more than $2M on its anticipated 2012 expenditures.  According to audited financial statements for the year ending December 31, 2012, the city realized a surplus of $2,048,000. Council will be asked to place $1,985,000 into specific reserve funds with the balance, $63,700, into an unappropriated fund. "Police Services was quite a bit under budget in 2012 to the tune of $1.1M. They had a number of members that were off and not able to perhaps get the additional members in that were scheduled to come in," says Grayston. "The second highest area, close to $770,000 was in additional investment revenues. We have a large capital program and if that program is completely expended then our return in investment is going to be quite a bit less." Grayston says the city budgets conservatively for return on investment and, if there are more funds to invest the return will be higher as was the case in 2012. It is being recommended the $1.985M appropriated funds be dispersed among eight different reserve accounts, including:

• $450,000 - Parks Purchase and Development
• $300,000 - Major Facilities
• $300,000 - RCMP Building
• $250,000 - Arterial Roads
• $250,000 - Snow Removal
• $200,000 - Major System Software
• $150,000 - Civic Facilities
• $85,000 - Fire Dispatch

Grayston says the $63,000 unappropriated fund would be held in case of unforeseen emergencies. City Council will be asked to approve the appropriations Monday and, while it can direct the funds at its discretion, Grayston says putting that money specifically to offset next year's anticipated tax hike is not an idea he would recommend. "Lets say they bring in a million dollars from reserve to reduce the tax requirement for 2014, then in 2015, you need to build that one million back plus up to where you expected to be," says Grayston. "So, in 2015, instead of a 3 per cent increase now you need a 4½ per cent increase because you are starting at a lower number."