The City of Penticton is following through on a warning given during last year’s budget process that residents should expect significant tax increases over the next few years.
The 2017 budget projects a five per cent increase in municipal taxes. The final 2016 budget included a 5.5 per cent increase, higher than the 4.25 per cent increase projected by then city manager Eric Sorensen.
According to Sorenson, Penticton needed a 10 per cent tax increase over 2016 to 2018, to make up for years of no tax increases and deferred spending that added up to a $2.7 million structural deficit.
“Sooner or later, you have to pay the piper,” said Mayor Andrew Jakubeit. Last year’s increase translated to an increase of about $76 on an average $350,000 home.
“It is always difficult to find that balance. On paper it is easy to say cut here or cut there but there are repercussions after every decision you make,” said Jakubeit.
The proposed increase breaks down to approximately 2.1 per cent for asset management, 1.5 per cent for inflation and1.3 per cent for general increases. The final tax rate will be set by May 15 after final assessments are received and council has approved the budget.
“Development services could use some extra help,” said Jakubeit, noting that there was $198 million in construction activity last year. “This year already seems busy. The sooner we get things added to our tax roll, the better.”
The draft budget contains investments to modernize city systems and aging infrastructure with $500,000 proposed for system and process improvements and $16.4 million earmarked for capital investment.
“Moving to a digital era is critical to enhance services to our citizens, create efficiencies and better manage the city’s infrastructure,” said chief financial officer Jim Bauer. Prior to taking over as CFO in October 2016, Bauer was awarded a $70,000 contract to identify improvements for the city’s information technology systems.
“2017 will see more work on analyzing and prioritizing our infrastructure needs and we will be adding to our asset management reserve bringing the total to $1.2 million as we start to build funding to address our infrastructure deficit,” said Bauer.
Budget discussions are scheduled for Feb. 21 to 23. Agendas for the three days, as well as copies of the presentations, are available online at penticton.ca. The meetings, in council chambers at City Hall, are open to the public and are also live-streamed through the city website.
A designated section of the city’s community engagement website ShapeYourCityPenticton.ca has been set up to receive budget inquiries and you can also follow the City’s twitter feed for live updates and to ask questions.