The long-anticipated downtown Kamloops performing arts centre is one of two projects eyed in a pair of proposed $275 million loans. Opposing voters have until Sept. 13, 2024 to sign petitions.

(LEVI LANDRY / iNFOnews.ca)

Kamloops homeowners have heard the 'Build Kamloops' loans will cost them $25 more in taxes each year, but it's too soon to say whether that will remain unchanged after five years.

It's an amount based on the value of the average Kamloops home shouldering a one per cent tax increase annually for five years, all before either of the two proposed facilities are built.

The funding scheme is pitched to stop at $125 and remain there, but it could still change later on. When asked if the $125 increase will remain after 2029, City spokesperson Kristen Rodrigue said it's difficult to say for both staff and council today.

"We expect that there will be ongoing growth in the city in both population and changing community needs and expectations. What’s important to remember is that the City always maintains a level of debt servicing within its budget every year," she said in a written response. "Ultimately this will be a decision that is placed on the elected city council at that point in time."

Although the City is pitching the increase as an additional $25 per year, it's not a number that applies to everyone. It's based on a single family home valued by BC Assessment at roughly $800,000, which would have paid $3,336 this year, according to the City's property tax estimator tool.

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The first 1% increase was already approved earlier this year, meaning the City will reap an additional $1.34 million to pay off debts on top of the $6 million that's already put toward the City's debt annually. In 2029, the average home will pay $125 more per year than it does now toward the City's debt, while City Hall will collect a total $14 million per year for its debt if all goes as currently planned.

The tax increases are all meant to be put in place before the loans are taken out to avoid a single jump in taxes later on, according to City officials.

"Council is implementing a funding approach that will gradually increase our debt servicing capacity and allow us to afford a larger loan payment when we need it," Rodrigue said in a June council meeting.

By 2029, the $125 annual loan payment that comes from the average Kamloops home will remain in place for the next 30 years as the City pays off the $275 million it plans to borrow. It's roughly double what the average home contributes to pay off debt through its annual taxes, according to City of Kamloops figures.

Assuming the loans for both the planned performing arts centre and arena multiplex are approved by voters, the City will take on the $275 million debt only once they're built. The plan is that both will be built by 2029. Although the total in City loan payments will be higher than $14 million per year until 2038, the early tax increases ahead of time mean homeowners shouldn't pay anymore than they have in 2029.

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"It's a position that gets continuously stronger over the next four years and will strengthen even more as interest rates drop," Rodrigue said in that meeting.

It may take up to 30 years to pay off the $275 million in borrowing, but there may be opportunities for grant funding later on to pay off the projects sooner, Rodrigue told iNFOnews.ca. Along with the potential for grant funding, City council could change the loan payment scheme at the end of the five years.

But if that funding scheme remains unchanged, it adds up to $3,250 in total over 30 years for the average home to pay off the City's debt.

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The sales pitch to voters assumes both loans will go through, but the province forced the City to issue two separate petitions for the loans. That means it's possible just one of the loans could be approved, between the $140 million performing arts centre and the $135 million arena.

It's not clear how taxes will change if that happens, and it's possible council could still approve the same plan of $25 average increases over five years.

"(Council) could choose to adjust the planned increase to support only the approved level of borrowing, either through a lower percentage per year or through a 1% increase for fewer years," Rodrigue said.

Voters against the borrowing have until Sept. 13 to sign petitions for City Hall. It will take 10% of the electorate, or nearly 9,000 people, to successfully oppose the plan. That would likely force a referendum on the projects.

Go here for more of our coverage of the Kamloops performing arts centre.

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