LETTERS: Observation on City of Penticton coffers

That’s like buying a house for $500,000 and then going to court and asking for half your money back because you couldn’t afford it.

For this council to put before the court that it was the increase to the city’s “long term debt that doubled in 2008” as the reason why their asking the court to overturn the firefighters arbitrated wage settlement.

The debt obviously being referred to is the South Okanagan Events Centre. The debt for the SOEC was covered by a tax increase over a three-year term to a maximum of $27-per $300-hundred thousand of property value. No additional tax increase necessary for the SOEC after 2008!

Now the real story of the city’s financial dilemma as I’ve observed it.

In 2008 the city fired several highly qualified management persons, at an undisclosed reported cost of around $3-million. No tax increase, the monies came out of reserves. While this was happening, city council failed to apply the cost of the annual inflation to their budget fro 2008 to date.

Quote the Western News, reduced taxes in 2008, no tax increases in 2011, 2012 and 2013, with small increases in the following years?

So did they take the money out of reserves? Most likely.

Every council has the option to draw from reserves to avoid tax increases. But to draw reserves down so they can’t ever be replenished puts the city in a very bad financial position. They would have no choice but to bring in a substantial tax increase — be prepared.

The city’s budgeting is no different than any one of us constantly drawing from our savings to pay our monthly bills.

City tax increases should always stay close to annual inflation. The fact that since 2008 councils have ignored inflation, has now become a very costly mistake for this council. No business can avoid the cost of inflation, to do so would eventually put them out of business.

The management are now calling for dollars to fix our deteriorating infrastructure. Simple analysis: as a homeowner, do you ignore the need for house renovations this year knowing full well to wait a year will cost you more? Imagine the increase cost to the city when your dealing in million dollar infrastructure projects.

Why then if the city is in such a financial crisis would you grant  10-year property tax exemptions for new development?  Estimated at present of close to a million dollars. Developers only invest in development if there is a market to recover their investment. They don’t invest just because this council exempts the properties from paying taxes for 10 years.

Under this policy, when the units get sold, the city could have several hundred individual property owners paying “zero” taxes into the city’s budget for up to 10 years. Zero contributions to help the city’s financial dilemma?

In the meantime the rest of the property owners will be subsidizing them to enjoy the city’s amenities and costs to catch up with our failing infrastructure.

The judge who hears the city’s appeal on the firefighters arbitrated settlement will love to hear the above property tax decisions made by this council and councils since 2008.

Then this council announces that it put $1.9-million aside to pay the retroactive settlement, which you rightfully had to pay out and then make the ridiculous claim that it was an unfair settlement. But you’ve paid it! So you are now appealing to the courts, which will cost XX dollars in legal fees because you, the council, submit the city can’t afford it?

The analogy: that’s like buying a house for $500,000 and then going to court and asking for half your money back because you couldn’t afford it.

Council ask yourselves, don’t you think the judge will say, “you have the authority as elected persons to increase taxes to keep the municipality financially sound in accordance with your authority under the Municipal Charter.”

Ah well, keep sending bylaw enforcement out at $100 per hour to count Aunt Mary’s backyard chickens. Can we afford it?

Jake Kimberley

Penticton

 

 

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