Penticton again avoids tax hike
For the third year in a row, Penticton residents won’t be seeing any increase in their municipal taxes.
City council approved the 2013 budget this year, holding the line on taxes, even though the city had a $1.2 million deficit to deal with in the operating side of the budget. Rather than raising taxes 4.8 per cent to cover the deficit, council chose to draw on reserve funds to make up the difference.
However, the 2013 budget didn’t pass unanimously, with Couns. Helena Konanz and John Vassilaki both voting against it after suggesting significant amendments.
Konanz was concerned that with current economic conditions around the world, the time was not right to be drawing on the city’s savings to ensure a zero tax increase.
“The trouble is that we have to dip into our surpluses to get it. I don’t think this is a good time to do that,” said Konanz, listing off a number of costs, like the increase in the RCMP contract costs, that are outside city control. “Everything that is costing the city more, just like it is costing everyone in Penticton more to live.”
Konanz likened it to a parent spending savings on extravagant Christmas presents during tough times. Sometimes, she said, you just have to say no.
“This next year could be very shaky, to dip into our savings is not the responsible thing to do right now,” said Konanz, making a motion that $1.2 million earmarked for part of the 2013 downtown revitalization be deferred and the money instead used to balance the budget.
“It’s exactly what our deficit is in the budget. It’s the one toy you can’t (have) this year,” said Konanz, noting that the city would still be able to do the planned conversion of the Ellis Street bus barn into a downtown market. “This is the one thing that would make it a zero base budget, but still allow us to give lots of new services to Penticton. It really is the responsible thing to do.”
The money Konanz wanted to redirect is intended for upgrades to Westminster Avenue, Martin and Winnipeg Streets. Vassilaki agreed that it was not a wise expenditure, though his amendment would have seen money directed to improving underground infrastructure in downtown.
“I can assure you that no one is going to come to Penticton just to see us spend $1.2 million on those three intersections,” said Vassilaki.
Both amendments failed, and the budget passed with a 5-2 vote.
While there are no municipal tax increases in the budget, that doesn’t mean that Penticton residents won’t be putting more money in city coffers. The budget also includes rate increases for some services, including a $2 increase in garbage/recycling fees and hikes to electrical and water rates.
“We have a five per cent user fee increase that is being proposed and that is mainly to cover the replacement of our aging infrastructure,” said chief financial officer Doug Leahy, noting that the water rate has not been increased since 2009. “We have expended a significant amount of works and our water utility has forecast to be at a $40,000 surplus at the end of 2013, which is quite low.”
Likewise, council voted to increase electricity rates by 7.03 per cent, applying a 5.8 per cent increase in costs from FortisBC to an average of wholesale and retail rates as well as a 1.28 per cent revenue adjustment from the city utility itself. Those rate will be confirmed in January when council approves an amendment to the fees and charges bylaw.
While Konanz’ plan to defer part of the downtown revitalization didn’t fly, the budget does include some major deferments.
“The major road recapping infrastructure that we have expended in previous years has been deferred until 2014,” said Leahy, explaining that had been done to focus on the downtown and waterfront revitalization priorities. “That being said, staff have recognized that we have to do some significant patching of our roads, so there has been an increase in our operating budget for patching of our roadways.”
Mitch Moroziuk, director of operations, said that the recapping budget is expected to be $750,000 in 2014, climbing to $1 million in 2015.
The capital budget includes some major work revolving around the to revitalization priorities. The city will be spending $1.75 million on the West Okanagan Lake waterfront enhancement, with the city paying $650,000 and gas tax funding covering the remaining $1.2 million. The Skaha waterfront area will also be receiving some attention, with the city putting $30,000 towards a new playground, with the South Okanagan Children’s Charity raising the remaining $55,000 needed to build a “discovery park.”
The 2013 portion of the multi-phase Downtown Penticton revitalization process has a $1,625,000 budget, with $1.25 million approved to refurbish the Martin Street-Westminster Avenue-Winnipeg Street area and the remainder earmarked for the bus barn to downtown market renovation.