West Kelowna starting with a proposed four per cent tax hike

West Kelowna council has decided to move forward with a provisional tax increase of just over four per cent in its 2011 budget.

  • Jan. 21, 2011 6:00 a.m.

Coun. Gord Milsom

West Kelowna council has decided to move forward with a provisional tax increase of just over four per cent in its 2011 budget.

But the vote was not unamimous.

Coun. Gord Milsom noted that after seeing all the district’s financial information, he believes West Kelowna is in a very healthy financial position.

And he said the district could afford to increase taxes for 2011 by a percentage close to the rate of inflation, two per cent, and still be in a position to build reserves.

But his council colleagues disagreed and voted to move ahead with a 4.0741 per cent provisional increase.

Coun. Bryden Winsby said he would have been almost happy with three per cent, but thought a commendable job had been done with the budget. He noted West Kelowna is looking at essentially an 18 per cent increase in operating expenses.

“We’re not hugely encumbered by debt, something we have to watch carefully.”

He supported an increase in the number of municipal staff, with the additions of a facilities operator and an irrigation technologist, as well as the RCMP’s part-time traffic reservist.

Winsby pointed out much of the funds raised from the tax hike will go towards years to come, so West Kelowna will not burden its taxpayers with large increases.

One source of a potential future increase would be the replacment of part of the district’s $750 million in water network, road network or buildings.

Director of engineering Gary O’Rourke said West Kelowna is identical to almost every other municipality in the country when it comes to not keeping up with infrastructure renewal.

But he pointed out the district has to look at what it can do.

“We have to get a really good handle on our water utilities,” said O’Rourke. “We’re going to have to up our spending to keep up with that long-term.”

He added the 300 kilometres of road within district boundaries should last for another 20 to 30 years.

“We should be doing eight to 10 kilometres per year of roadwork to keep up. We’re not doing that at this point.”

O’Rourke noted the fact that financial reserves are increasing is positive.

Coun. Rosalind Neis said she is not a huge fan of having millions of dollars in the bank and then taking out loans to buy what it needs.

She asked Zaffino how much the municipality would want before dipping into reserves and starting to use it.

Projections are for West Kelowna to have $30 million set aside in reserves by 2015.

Zaffino noted council authorized a minimum of eight per cent of total operating costs for the district being set aside for reserves.

He pointed out there is a minimum balance needed in reserves.

“And that’s based on a very conservative estimate, because we’re a new municipality,” said Zaffino.

Chief administrative officer Jason Johnson noted different councils look at budget decisions differently.

He said many master plans will be completed by the end of 2011, and council will be in much better shape to make decisions around infrastructure.

Neis said while it hurts her and every member of the municipality to pay a little bit more, she did support the tax increase.

She noted it’s difficult to know how much to pay now to protect the district from the future, because council does not know what’s coming.

“I’m sure it’s not going to be well-received by the public if it passes, but I think we are doing the right thing for our community by having this increase now,” she said.

Coun. Duane Ophus pointed out the 4.0741 per cent increase is a provisional hike, and is subject to change.

He noted a two per cent tax hike at this time would have a $2.5 million effect on West Kelowna reserves.

He added the municipality has to be careful about setting proper tax rates and saving so it can meet the contingencies it knows are down the road.

He pointed out the infrastructure deficit faced by West Kelowna is faced by every other municipality.

“It’s just a reality. You just have to face priorities and live within your means.”

Ophus noted the district is not going to be able to afford some of the things it may have considered necessities in the past.

“Bearing all of those things in mind, this is the year to be more careful and cautious, and leave future councils in the best position we can,” he said.

Mayor Doug Findlater said he was concerned with the four per cent hike.

The mayor noted there are at least two sessions for the public to have input into the budget process.

“We have to put this out there and do the education about why this is the way it is.”

He added West Kelowna’s real challenge is in making sure there’s not too much of a hit from the Regional District of Central Okanagan, based on what CORD puts in its budget.

In regard to capital projects and infrastructure challenges, Findlater noted funding from senior levels of government is cyclical.

He said West Kelowna had a good dose of money in the past because of bad economic conditions, with less coming now as provincial and federal organizations try to clean up their deficits.

He feels such funding will return, whether from bad times or from good times, when senior governments can afford to give more money away.

“We’ll get that kind of help further down the line,” predicted the mayor.

West Kelowna has to be prepared, and putting money into reserves now is important to match those kinds of opportunities, added Findlater.

Coun. David Knowles said he found the budget to be balanced overall.

He said he would have liked seeing some small concession towards the business community.

“To me, that would have sent a really good message,” said Knowles.

As for Milsom, he said he recognized there are infrastructure issues out there, but the district needs to be careful about how much it taxes its residents.

“Our citizens, they’re facing constant tax increases,” said Milsom.

He noted that at some point, municipal officials need to restrain increases and find other solutions to solve the municipality’s financial problems.

The motion to support a 4.0741 per cent tax increase was carried, with Milsom the only one opposing it.

msimmons@kelownacapnews.com

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