Kelowna grapples with ability to pay for its new capital plan

Plan calls for $523 million in infrastructure spending over the next seven years.

Kelowna is facing a big bill for all the infrastructure it wants to build over the next seven years.

And while a little less than one third of the estimated $523 million required will come from the taxes it will collect each year from property owners in the city, another $96 million will have to be borrowed and even more will have to be come other levels of government in the form of grants, as well as from partnerships and from developers.

“The additional borrowing will add to the city’s debt,” admitted Joel Shaw, Kelowna’s assets and investment manager.

Saw laid out the 2013-2020 capital plan for city council Monday, revealing a list of 280 projects that the city wants to complete, including new buildings, parks, transportation and transit projects, solid waste programs and water and wastewater treatment projects.

The big price tag caught the attention of councillors, some of whom were quick to point out that city’s appetite for spending appears bigger than its resources.

“Right now, our needs and desires outstrip our ability to pay,” said Coun. Gail Given.

At the top of the capital list a new, $45-million RCMP building, slated for the corner of Clement Avenue and Richter Street. The city is currently early in the design stage and Shaw’s report showed construction of that building alone in 2015 could push up the annual average residential property tax increase substantially in 2016.

Other big ticket items on the list include a major renovation of the Parkinson RecreationCentre at $22 million, an expansion of the library parkade and construction of a new parkade beside Memorial Arena at a combined price of $20 million, the city’s one-third contribution of $16.5 million with the federal and provincial governments for the $50 million extension of Highway 33, a new $12 million Lakeshore Road bridge over Mission Creek, $26 million to repave roads over the next seven years,  the completion of a long-awaited road link from Glenmore to UBCO at a cost of $9 million, transit improvements costing $14 million and upgrades to the water system totalling $29 million. In total, there are 280 projects listed in the plan with a total price tag of $523 million.

But Shaw said the plan is “fluid” and he expected it could change over the years.

While city council expressed concern about the plan, it did approve it in principle, noting each project would have to return for final approval before it could proceed.

A key component to funding much of the work will be securing government grants for several of the projects, something that may prove increasingly difficult if the new Liberal government is serious about curtailing its spending and reducing B.C.’s debt.

The province says it has invested about $1.5 billion in this area over the last 12 years and while the three re-elected local MLAs have vowed to keep lobbying for more provincial money for the area, that could prove difficult to achieve.

Coun. Robert Hobson said in some cases, discussions will have to be had with the community to gauge its willingness to pay for new projects that cannot attract outside funding.

Shaw’s report showed that as of 2016, if the projects in the plan are to be completed, the city may have to break its informal policy of not exceeding five per cent of taxation going to pay for debt servicing.

The report shows that in 2016, mainly because of the RCMP building, that amount could run close to seven per cent.
















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