When Kelowna city council heads into its annual budget deliberation session next week, councillors will be looking at a proposed 2.54 per cent property tax increase for 2013.
That’s the figure city staff have pegged in the annual financial plan to be presented to council during the day-long budget deliberation scheduled for Dec. 13.
The proposed increase, more than twice as high as the final 1.1 per cent hike approved for the 2012 budget, could be lowered depending on what council might agree to cut from the budget.
But if past history is any indication, the final figure will only be slightly lower than the proposed increase.
Coming out of last year’s budget deliberations, Mayor Walter Gray warned the 2013 increase would likely be much larger than the 2012 increase.
Earlier this week Coun. Gerry Zimmermann said he believed it would not be possible to keep 2013’s tax hike as low as one per cent.
This year’s budget, which is expected to generate $357 million in revenue including $103 million from taxation, will include money for 12 new RCMP officers, approved just before the 2012 budget was passed, and another four for 2013.
The new cops were recommended in a police resourcing plan and crime reduction strategy approved by council last year following a review of police services in the city.
The plan recommended a total of 22 additional police officers, with the remaining officers to be added in 2014 and 2015.
During the formulation of this year’s budget, council approved a total of $1.9 million of incremental service costs that were either part-year or were to be phased in over a two-year period and that will impact the 2013 budget.
“The major components of that increase included the new police officers, a one-time street sweeping reduction and several one-time position vacancies,” said city manager Ron Mattiussi in his report to council for its Monday meeting.
In addition to that money, base service contract increases for city staff, RCMP and transit have added another $2.8 million to the city’s 2013 budget requirements.
While some reductions were made, the bottom line for the city, according to Mattiussi, is that the total tax demand in 2013 will jump $3.6 million to $103.1 million from $99.5 million this year.
“For the 2013 financial plan, my goal is to maintain existing core services while providing for the maintenance requirements of existing infrastructure,” said the city manager in his report.
“We need to be prepared for the future while maintaining a solid financial base in the present.”
Mattiussi said revenue growth continues to increase at a slower rate than expenditures in the city and the trend is expected to continue for the near future.
The 2013 budget recognizes the slower pace of growth and expansion projects based on growth will have to be delayed, he added.
In addition to spending more on police, the city is also looking at spending more on acquiring land for parks, maintaining arenas and recreational facilities, and replacing the Mission Creek Bridge if it is successful in getting grant money from the Gas Tax Fund.
There is also the ongoing cost of the phased Bernard Avenue revitalization project, an expansion of Stuart Park downtown once the Kelowna Yacht Club moves on the land currently housing the now empty—and soon to be demolished—Water Street Seniors’ Centre and more money for transit improvements.
But the economy will also play a part. Tax revenues from new construction are expected to be down this year to $1.1 million from $1.65 million last year and preliminary indications are that the City of Kelowna’s residential property values, on average, are three per cent lower this year than last year.