Coun. Helena Konanz says the city could afford to make the planned tax increase a little smaller.
Speaking against the planned 2016 budget at council’s regular meeting Monday, Konanz said the city should use reserve funds to lower the tax increase, as they have done in previous years.
Introducing the final 2016 financial plan, budget analyst Deb Clipperton confirmed it included a 5.5 per cent increase in the city’s tax requirement for 2016.
Konanz said the size of the increase made it impossible for her to support the budget, noting the argument that the increase was required because Penticton had enjoyed minimal tax increases over the last five years.
“That may be, but this is a huge hit on the city of Penticton. I am sure it is higher than any in the Okanagan, probably higher than any in B.C. if we take a look,” said Konanz, suggesting the city dip into the approximate $5 million it is holding in general surplus.
“I say that we take $500,000 out of that and we take it down to a 3.5 per cent increase, which I think is doable for most people in Penticton,” said Konanz. “We have had councillors say that we should not go into our general surplus because that is for a rainy day. A 5.5 per cent increase is a rainy day.”
According to Colin Fisher, the city’s chief financial officer, the increase amounts to about a $76 increase for the average residential homeowner, based on a home assessed at $350,000.
Konanz said that a 3.5 per cent increase was still substantial, but argued that it would be more palatable to the Penticton taxpayers. She met with opposition from other councillors, like Coun. Max Picton, who said the increase was needed to meet the demands of taxpayers for services.
“When you look at the expectations of citizens to have these facilities, to have all this stuff provided … these things need to be paid for somehow, and dipping into the reserves is not a sustainable way to do that,” said Picton, adding that he believes the larger tax increase is in the best long-term interest of Penticton.
Coun. Judy Sentes said the city needs to make some investment into the community, and that the dipping into reserves and deferring work was not sustainable.
“We are facing that now. We tried to hold the line, to cut where it hurt,” said Sentes. ”We have a community that has expectations. They not only want sustainability of what we have, they want it maintained and they want even more things.”
With Konanz opposed, council voted 6-1 to give the financial plan its first three readings. Final approval and adoption of the budget are expected to occur at city council’s March 7 meeting.