By adding another $20,000 to the 2016 municipal budget to cover the cost of refurbishing the City of Kelowna parade float, Kelowna city council nudged up the provisional property tax increase for 2016 slightly to 4.12 per cent from 4.11 per cent.
An estimated two per cent of the total increase is required to cover the cost of borrowing for the new police services building under construction on Clement Avenue.
The parade float addition was the only change council made to the provisional budget that will impact the the tax increase next year. Council also agreed to fund six new RCMP officers instead of three, but the money for the additional three officers will come from city reserves and not have an impact on the $120 million the city plans to collect in taxes next year, said city manager. Ron Mattiussi.
The proposed tax increase will add a little over $73 to the municipal portion of the 2016 property tax bill for an average priced house in Kelowna.
Call it the catch-up budget.
Kelowna city council approved its 2016 municipal budget Thursday, with Mayor Colin Basran saying that the time had come to address underfunded programs of the past.
“When you defer these things, they come back to bite you,” said Basran during a break in the discussions.
He pointed to the road resurfacing program that he said had been underfunded for years.
As a result, the number of complaints about the condition of local roads has shot up.
In the 2016 budget, that will mean an increase in spending on resurfacing road costs, to the tune of $3.4 million.
According to city manager Ron Mattiussi, after years of “robbing Peter to pay Paul,” the municipal budget presented to council Thursday put the city’s financial footprint “back in equilibrium.”
Mattiussi told council the 2016 budget invests heavily in areas such as infrastructure and information technology in which Kelowna is playing catch-up.
The city will spend nearly $4 million on IT services and development of what it calls its “dark fibre,” a fibre optic network that allows for the transfer of large amounts of information.
The city is looking to make money by selling use of the network to the private sector.
Major transportation projects include the roads resurfacing program, budgeted at $3.4 million for the annual work maintaining the city’s road network; transportation infrastructure renewal for $575,000; and $670,000 for traffic control infrastructure.
Projects related to transit add up to $2.8 million, while $3.6 million will be spent on active transportation. Funding for these projects will come from a combination of reserves, grants and taxation.
Heading into the deliberations, the provisional budget called for a 4.11 per cent tax increase next year with a total taxation demand of $120 million, up from $113.6 million collected this year.
That proposed increase would add $73 to the annual municipal tax bill of an average Kelowna house.
Basran asked his councillors to keep in mind who they are building the city for as they went through the budget—city residents.
He said while he feels residents are getting good value for their tax dollars, council needed to keep its strategic plan and its goals in mind.
According to the city’s finance department, 3.6 per cent of the proposed increase is accounted for by the police services building currently under construction on Clement Avenue in the city’s North End, new contracts for unionized city workers, firefighters and airport employees, a mandated pay hike for RCMP officers and the cost of the six RCMP officers added in last year’s budget.
This year, another six RCMP officers were requested by Kelowna’s top cop Supt. Nick Romanchuk, but only three were recommended in the budget.
However, council agreed to fund all six by sticking with the original recommendation for the three officers and using money from reserves to pay for the other three.
The tightness of the budget did not leave council much wiggle room to add projects or additional staff—such as the three extra cops—to the budget this year.
In the past, Kelowna city councils have aimed at keeping the annual municipal tax hike to around two per cent.
But last year they were told the starting point would be 1.97 per cent thanks to the new police services building.
The cost of the new officers and the labour contracts subsequently added to that percentage.
This year the city plans to spend a total of $32.6 million on capital projects, of which $12.1 million will come from money the city collects in tax. The rest will come from provincial and federal grants as well as other revenues generated by the city.
It will also spend nearly $2 million on four major park projects: $350,000 on Kerry Park improvements downtown, $250,000 on a new playground at Rutland Centennial Park, $250,000 on the Upper Mission Trail Building Partnership and $450,000 to start planning the new Glenmore Recreation Park. That recreation park will likely take years to build and could cost as much as of $50 million when all is said and done.
On Thursday, council also approved spending for several transportation projects, including $572,000 on a new automatic information system for transit to give users real-time information about the arrival of buses both at the transit shelters and via cell phones and tablets.
The money for that project will be provided by the province and federal governments, expected to be in place next year. Kelowna will be only the third system in B.C. to have it. Similar systems already exist in the Lower Mainland and Victoria.
Mattiussi said the spending called for in the 2016 budget strikes a balance between renewing existing infrastructure and operations while funding new assets and the requisite staff.
“Investment in recent years focused primarily on new assets, while spending on some existing assets and operations was deferred,” he said in his budget report to council.
“We have reached a point where renewal of some assets is necessary to maintain service levels and avoid the costlier option of replacement.”
Despite that, he said he believes the public is happy with how the city spends its money.
“Overall we know (from the annual city survey of residents) the citizens are not just relatively happy, they are very happy,” said Mattiussi.
The budget approved by council Thursday is provisional and will be finalized in M ay.