Residents of Penticton should prepare themselves for a hefty tax increase over the next few years as the city tries for better financial health.
“Prudent planning suggests a minimum of a four to 4.25 per cent tax increase for the 2016 and 2017 taxation years,” said city manager Eric Sorenson, as staff and council began a day of deliberations on Penticton’s 2016 operations budget.
For 2018 and after, Sorenson said an annual increase of two per cent is recommended.
According to Sorenson, Penticton needs about a 10 per cent tax increase over the next three years to deal with its structural deficit, which has built up to $2.7 million over the last five years.
Colin Fisher, the city’s chief financial officer, apologized for the small type on his “Financial Reality” slide, showing a list of increased costs, and a few savings, the city will experience in 2016.
He explained that the items on the list were items the city had no control over, like a $343,919 increase in RCMP costs, or a reduction of $200,000 in traffic fine sharing from the province. The total of the items in the list, he said,amounted to $1.495 million, in itself a 5.75 per cent increase in costs over 2015.
“We are at a pinch point now and there are no more rabbits to pull out of the hat,” said Fisher.