Kelowna city council has approved it’s 2016 budget.
The budget, part of the city’s current five-year Financial Plan, includes an average increase of 4.11 per cent on the municipal portion of each city property owners’ taxes bill this year.
The hike means the owner of a single-family home with an average assessed value of $501,410 will pay $1,861 for the municipal portion of their property taxes, an increase of $73.55.
But that is not the entire tax bill. The city will also collect more than $100 million in taxes this year for other authorities, such as the regional district, the regional hospital district, the Okanagan Regional Library and the B.C. Assessment Authority, as well as user fees for services such as curbside garbage and recycling collection and local improvement projects.
This year’s average increase to the municipal portion of property taxes is slightly lower than the 4.12 per cent increase approved by council at its provisional budget deliberations in December.
“We often see changes between provisional and final budget,” said financial planning manager George King. “New information is available between December and April, including emergent items, which are included in the final budget. This final budget, we saw an increase in revenues in transit and development services and a reduction in revenues from natural gas sales. These adjustments contribute to the slight reduction in tax demand from provisional budget.”
That new information included lower than expected figures for new construction in the city in 2015, money the city uses each year to lower the annual tax demand.
After several years of increases in the revenue received from new construction, the city saw a drop of nearly $300,000 in 2015 from the $1.96 million originally anticipated based on initial figures from B.C. Assessment.
Thanks to more land in the city being given farm status and a few large assessment appeals that went in favour of the property owners, the new construction revenue figure came in at 1.67 million, said city finance director Genelle Davidson.
This year, the city will take in $119.88 million in property taxes as part of the over all $472.2 million budget. Property taxes will account for approximately one-quarter of Kelowna’s total funding in 2016, with the other three-quarters coming from other sources such as grants, reserve funds, fees and charges.
As in the past, previous years’ budgets include commitments that impacted the 2016 Financial Plan, such as borrowing cost for the new the new police services building currently under construction on Clement Avenue in the city’s North End and the annualization cost of six new officers hired in 2015.
Heading into the 2017 budget, the city knows it will be looking at prior commitments that will have a 1.24 per cent increase impact on that budget, said Davidson. Because of that, like this year, the city expects the average increase in 2017 to also be around four per cent. The preliminary figure, however, will not be known until after 2017 budget deliberations take place this December.
Each year, the council sets the tax rate requirement for the coming year after reviewing the financial plan to determine which projects to fund and which projects to defer or cancel, based on maintaining or improving existing levels of services while planning for its infrastructure needs.
For the last 13 years in a row, the city has received the annual Distinguished Budget Presentation Award for its budget budgets from the Government Finance Officers Association.