The City of Penticton has released a draft of the 2018 budget, hoping to get the community more involved in the budget process. (File photo)

The City of Penticton has released a draft of the 2018 budget, hoping to get the community more involved in the budget process. (File photo)

Penticton growth reflected in 2018 budget

Penticton’s economy expected to continue growing through 2018

Even with a three per cent tax hike expected in the City of Penticton’s 2018 budget, there is some good news too.

Over the last five years, Penticton’s population has grown by about 2.7 per cent, and through 2017 the city was doing a brisk business with increased numbers of planning applications, building permits and business licences.

“Over the last several years, we have seen strong growth. We anticipate that is going to continue for a few more years,” said Jim Bauer, Penticton’s chief financial officer.

He expects the local economy to remain strong through 2018-19, but said it is hard to predict what might happen, given the unpredictable influence of larger economies.

“Activity in the Lower Mainland is generating an influx of people and businesses wanting to locate out up here,” said Bauer. “Depending on what happens there, it (local growth) could continue longer.”

The forecast three per cent tax increase, according to Bauer, equates to about $900,000 increased revenue for the city, but growth is also going to be a factor.

“We also expect that new development that is coming on stream will generate another $500,000 in revenue,” said Bauer.

Of that three per cent, the majority is going to address inflation, 1.5 per cent, with another one per cent to address Penticton’s ageing infrastructure. The remaining 0.5 per cent is to address city council’s 2018 priorities.

Related: Hard choices and a big bill in Penticton’s future

Bauer said the effect on residential property owners depends on what council chooses to do with the business tax rate multiplier, which determines the portion of the tax burden shifted to the business sector.

With the current tax multiplier of 1.58, a three per cent tax hike translates to a yearly increase of about $13 per $100,000 of assessed value in a home.

Council began lowering the business tax multiplier several years ago, but Bauer said it might be time to raise it instead; a 1.8 multiplier would see the home tax increase drop to $5.64 per $100,000, and raising it to 2.0 would see residential property taxes decrease.

“It is considerably lower than everyone else in the valley and most other jurisdictions across B.C.,” said Bauer, noting the business tax multiplier is not part of the budget process but is set later in the year. “We are the sixth lowest in the province.

“If we are going to take it up substantially, it would have to be phased in.”

According to the draft financial plan released Wednesday, city general fund spending is expected to increase 2.4 per cent, to $70.5 million. The largest portion, 16.8 per cent, goes to protective services — RCMP, the fire department and the city’s bylaw department.

The city is proposing to add an additional RCMP officer at a cost of $150,000, along with staffing increases to the bylaw department.

The draft financial plan also indicates more attention to a number of social and criminal issues, such as increased poverty, theft, homelessness as well as mental health and addictions problems.

In advance of the upcoming 2018 budget talks, city hall is attempting to expand public input, releasing the draft plan for review and scheduling three public budget meetings.

Related: Penticton steps up budget engagement

“Part of this is re-connecting with the community, ensuring there is an understanding and awareness in terms of what the proposed financial plan is all about,” said Bauer. “Also, what I think is really critical, is getting their input, getting their feedback.

“When we come before council on Nov. 28 to the 30th, we will have a better sense in terms of what the community is feeling. That way council is more informed to make decisions based on the community’s needs and priorities.”