Update— 4:30 p.m.
Kelowna city council has settled on a 4.43 per cent provisional property tax increase for 2019.
The total includes a 1.95 per cent infrastructure levy, put in place to address an estimated $477 million infrastructure “deficit” the city is predicting over the next 10 years.
Following a day of budget deliberations at city hall Thursday, council arrived at the provisional increase after going through the budget requests item by item. The final figure was just 0.03 per cent higher than the recommended increase in the budget when council started its deliberations earlier in the day. The total rose after council added $10,000 for software to help design storm drains.
While the infrastructure levy was supported unanimously, it generated a great deal of discussion by council members, with Coun. Brad Sieben initially saying he wanted to see it lowered to bring the overall tax hike down to four per cent.
But several of his colleagues disagreed, saying it’s time the city addressed the infrastructure deficit as it will need to not only replace existing infrastructure over the next 10 years, but will also need to add to it to meet the demands of growth.
“There will always be a segment of the community that wants taxes lowered,” said Mayor Colin Basran. “But that’s not the reality in this community,
He called budget “fiscally responsible” not “fiscally conservative.”
“I don’t come into this (budget) process with any ideology like that,” he added.
Basran said he felt at the end of the day council “came in at a good place,” with the take hike, noting the increase for city operations only rose 2.48 per cent.
During the discussion, that figure was compared to neighbouring municipalities such as Lake Country and West Kelowna. In Lake Country, a provisional tax increase has been set t 8.7 per cent, with 4.9 per cent of that for a new fire hall, and in West Kelowna three different increases are being considered—three, four and five per cent, with the second two options putting money aside for the future.
Kelowna mayor and councillors all said they supported the idea of an infrastructure levy and most were supportive of it being pegged at 1.95 per cent.
“If not now, when?” said Coun.Charlie Hodge speaking about the need for a levy. He accused previous councils—of which he sat on— of creating the current situation by not planning adequately for future infrastructure in the past.
He said he would have had no problem with the levy being two per cent “or more.”
But Luke Stack, another council veteran, defended previous council’s say they were more focused on dealing with growth than address infrastructure need well into the future.
The city’s financial staff say similar levies to address future infrastructure needs are in place in 50 B.C. communities, so what Kelowna is doing is not unusual.
Coun. Gail Given pointed out the levy will only raise about 10 per cent of the total needed to address the infrastructure deficit but it’s a start.
Council’s newcomer, Coun. Loyal Wooldridge, said he was not sure about the levy when he first heard about it but has come to believe it is needed.
And, he noted, there are other ways that the city can find money to address the deficit as well.
“(The levy) is just one tool in our toolbox,” he said.
Coun. Maxine DeHart said she has heard opposition to the levy in the community, but said she supports it nonetheless.
“It’s the responsible thing to do,” she said.
The 2019 city budget has a total tax demand of $139 million and and includes additions such as eight more firefighters over the next two years and six more police officers to be funded through money saved by the RCMP in Kelowna because of annual vacancies at the detachment.
The budget will be tweaked in the coming months as the city learns how much new construction revenue it has from 2018 to offset the proposed tax increase. But the change is likely to be minimal.
The proposed tax increase will add about $88 to the municipal portion of the average homes property tax bill.
The budget will get final approval from council in the spring.
Update—1:45 p.m.
The Kelowna RCMP detachment is getting six more officers—and it won’t cost taxpayers any more money says the city.
That’s because the annual cost once the new officers are in place will be covered by the surplus generated by vacancies each year at the detachment due to issues like sick leave, pregnancy, temporary redeployment and other types of leave.
RCMP Supt. Brent Mundle said his detachment crunched the numbers and he is confident it can pay for the new officers on an ongoing basis using the surplus funds.
Police services is the single biggest item in the city’s annual budget with a total price tag of $30.3 million a year.
With the addition of the new officers, the city will budget for 189 officers at the Clement Avenue detachment building.
Mundle said the new officers will allow him to deploy more resources and support his three-year crime reduction strategy in the city.
It will also allow him to create a second PAC team, which will pair another officer with a mental health care worker so people who need health services, rather than spend a night in a jail cell or are taken to Kelowna General Hospital, can get the help they need through appropriate services.
He said while several of the recommendations in the recent report on city safety by retired RCMP superintendent Bill McKinnon were already either in place or being considered when he put together his budget request to city council, the addition of the new officers will help there too.
The total annual cost of the new officers, who will likely not be in place for about a year, will be just over $1 million once thy are one the job.
In addition to the new officers the city has also added an administrative co-ordinator position because that one that currently exists is actually a provincially-funded officer who is part of the West Kelowna detachment and the position is needed there.
Adding the co-ordinator will cost the city $69,000 per year and that money will have to come out of taxation revenues.
In approving the administrative co-ordinator position, council dropped a police request for another forensic video analyst.
Update—12:50 p.m.
The City of Kelowna is adding more staff to deal with two of the most talked about issues that came before council in 2018.
During its budget deliberations Thursday, council agreed to hire a full-time inspections and compliance officer and a another administrative clerk to make sure the rules regarding the sale of cannabis in the city and short-term rentals such as Airbnb are being followed.
According to city staff, the positions are needed to enforce the regulations the city has put in place for cannabis retail stores, and short-term rentals, which limit rentals of no longer than 30 days to just a few areas of the city and not in a resident’s principle residence.
“These (new staff) positions are the heart of the cannabis and short-term rental regulations,” said Coun. Luke Stack, adding without the ability for enforcement there is no point in the city having such rules.
Coun. Ryan Donn, a staunch proponent of short-term rentals in Kelowna, said while he supported having a person to make sure cannabis store sales are handled properly, he had concerns about a similar position to do the same with short-term rentals. His council colleague Coun. Charlie Hodge said also had concern, but in reverse, feeling short-term rental rules need an overseer more than the pot shop rules.
Given that one person will deal with both issues, both Donn and Hodge said they would support the addition of the new staff members, despite their respective concerns.
The two positions will cost the city a total of $255,600 next year and $315,000 per year after that (because the 2019 expenditure is only for part of the year). But those costs will be more than offset by the revenue the city will take in for licence fees from both pot shops and short-term renters, as well as permitting fees.
In fact, the city could end up taking in more money than the cost of the staff, according to the budget.
The cost of an annual fee for a cannabis retail store will be pegged at $9,465 and the cost of getting land rezoned to allow for a store is a total of $10,450.
Update—11:06 a.m.
Council is considering adding more money than originally planned in 2019 to help address the need for affordable and supportive housing in the city.
While the provisional budget allocated $750,000 from reserves to pay for land next year, council has set the item aside for later discussion, possibly to add more money.
The city regularly partners with B.C. Housing for the development of affordable and supportive housing projects, often providing land for developments built by the provincial agency.
Kelowna has a Housing Opportunity Reserve Fund to provide money for such land purchases but the fund does not have enough money in it now to buy a parcel of land.
City staff say says given the need for affordable housing and the ability of the city to partner with other levels of government, the money was included.
At the request of Coun. Brad Sieben, the item was set aside and council will consider adding more than the budgeted amount after all other budget requests have been considered and what the final tax increase amount comes out at.
Update—Dec. 13, 10:15 a.m.
Kelowna city council has approved the hiring of eight more firefighter over the next two years.
The move will complete the plan introduced this year to establish a full-time firehall in the Glemore area.
The city will hire four more firefighters in 2019 and an additional four in 2020. Fire chief Travis Whiting called the hires critical for fire suppression in the city.
The Glenmore station is the fifth full-time firehall in the city, joining the main one on Enterprise Way, the downtown hall, and halls in Rutland and the Mission.
The city will spend just under $1.6 million to pay for the staffing additions between 2019 and 2021.
Councillor Luke stack said he liked the plan to phase in the eight new firefighters given the move was a big hit to the budget’s bottom line.
He noted there was controversy last year when council put off hiring the new firefighters to this year to keep the 2017 budget in line.
The hall is currently staffed by four firefighters.
The addition of the new personnel not only allows the city to complete the full-time hall plan, it also allows for a rescue unit to be based out of the hall.
Whiting said it will help the fire department respond quicker to calls at the north end of the city and also respond to calls for assistance in neighbouring Lake Country quicker.
The money for the new firefighter will come from taxation revenue.
Original story:
The Kelowna city council deliberations over its 2019 budget have begun.
The all-day session at city hall today will determine the financial plan the city will follow next year. Some tweaks may be made early in the new year when the city learns how much new construction revenue from 2018 can be used to offset the annual tax demand.
The final budget will be approved in May and, historically the change, if any, from the result of the deliberations, is minimal.
This year, heading into the deliberations, the city is looking at a total 4.4 per cent tax increase, 1.95 per cent of which would be an infrastructure levy to help pay for an estimated $477 infrastructure “deficit” the city is facing over the next 10 years.
The proposed tax increase for 2019 would result in an $88 increase in the municipal property taxes for the average single-detached home in Kelowna with an assessed value of $682,260.
Last year, the city raised taxes an average 2.99 per cent. The provisional 2019 budget calls for a 2.45 per cent increase in municipal taxes plus the 1.95 per cent infrastructure levy.
The provisional 2019 budget highlights also include:
• Investment in downtown safety and cleanliness
• Bolstering first-responder resources such as police and fire fighting with 16 new front line personnel, including eight more firefighters to staff a full-time fire hall in the Glenmore area and six more police offers over the next two years. Both the RCMP and fire department are also asking for more support staff. The fire department wants two more casual dispatchers and the RCMP wants an operational intelligence clerk and a forensics video analyst. The budget estimates the total cost of police services next year at $33.4 million and the total cost of fire protection at $19.6 million.
• Allocating funding for land acquisition, specifically for affordable housing partnership opportunities as a new approach towards housing pressures faced by the community
• Delivering on “balanced” transportation networks with the construction of both the Ethel Avenue and Sutherland Avenue active transportation corridors and the accelerated delivery of the South Perimeter Road and Gordon Drive extensions
• Renewing and expanding parkland and waterfront access including City Park, Knox Mountain’s Paul’s Tomb Trail, Glenmore Recreation Park and interim access at the Hobson Road park property
• Investments in storm drainage improvements to mitigate impacts of flooding and climate change
Transportation is the largest capital expenditure in the budget at $28.4 million.
As part of the budget deliberations, city staff will recommend council consider the introduction of the controversial 1.95 per cent infrastructure levy in both 2019 and 2020 budgets. It is one of the options being proposed to fund a infrastructure deficit staff have identified in the city’s 10-Year Capital Plan.
“It is one of the ways we can take action and be resourceful in investing in our future so that Kelowna continues to be a great place to live,” says the staff report.
“As a financially resourceful municipality, the City of Kelowna has multiple revenue sources. Taxation represents 36 per cent. User fees and charges, grants, sponsorship and advertising, reserves and surpluses are other forms of revenue sources.”
The net taxation demand in the provisional Budget calls for collection of $139.4 million.
Capital investment, not including the Kelowna International Airport or the city’s utilities is pegged at $60.9 million with $13.6 million funded from taxation. The report says 39 per cent of that will go the renewal of infrastructure, 49 per cent for growth and 12 per cent for new infrastructure
For 2019, the budget includes $11.1 million in operating requests, with $7.1 million to be funded from taxation. There is also $217,000 in expenditure reductions.
(More to come)
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