(CHARLOTTE HELSTON / iNFOnews.ca)

In a year where many BC municipalities are bringing in shockingly high tax increases, some have been working for years to find ways to to avoid steep hikes.

It’s easy for municipal government staff and politicians to point the blame at high high inflation, high interest rates and rising labour costs.

Osoyoos is a case in point where residents are facing a hike to their annual tax bill of almost 40% – although that is under review.

For years Osoyoos town councils kept taxes to 3% and, even then, residents complained the increases were too high, Mayor Sue McKortoff told iNFOnews.ca.

Now that they’ve taken a closer look at their water and sewer systems they've discovered the need for major upgrades. Since those services are billed annually the change shows up on the tax bill, accounting for about 25% of the total.

Getting a handle on other ongoing costs, like vehicle replacements, accounts for another big chunk.

READ MORE: Osoyoos chose years of low tax increases, now the bills are due

Osoyoos got an $8,000 grant in 2015 through the Union of BC Municipalities for asset management planning, part of the $400,000 Thompson-Okanagan communities have received since the funding program began in 2014.

A number of communities in the region have embraced the concept of asset management or as Wally Wells, executive director of Asset Management BC, suggested it be called: providing reliable services for people.

It’s been a tough go since the organization – set up through a dozen government and government related bodies – was created about 20 years ago.

“Firstly, people resist change,” Wells told iNFOnews.ca in explaining why there isn't better buy-in. “Councils change every four years and there’s a lot of turnover in staff as well.”

It starts with the basic lack of understanding of just what assets a municipality owns and continues through to determining what those cost to operate, maintain and eventually replace.

“A case in point is a municipality that got a grant,” Wells said. “They built a community centre and after it was built they went to open it and council said: ‘Oh. You mean we have to hire some staff? We can’t do that.'"

Too often municipal government staff create budgets in silos that go to council as unconnected pieces. One may deal with operations while maintenance costs are talked about separately.

Wells gave the hypothetical illustration of a hockey league going to a small town council asking for more ice time.

“So, if council doesn’t think it through, they say: ‘OK. Fine. We’ll just tell the guys to add two more hours ice time and keep the arena open longer,’” Wells said.

“We’re saying: ‘Hold it. Does this mean you’ve got to pay overtime? Does this mean your Zamboni is going to get too much use? Does this mean the equipment gets worn out faster, the lights are going to be on longer? Do you need to hire more staff?'”

For new projects councils have to understand that, on average, the capital cost of a new project is only 20% of its “lifecycle” cost, which are higher for things like arenas than for pipes and roads, Wells said.

The cost to build something is only one-fifth of what it will cost to operate, maintain and replace over time.

“I’ve preached to public works staff all the time. We’re Canadians and we’re all nice and that’s good but you guys get told by council sometimes that ‘we’ve got a tax problem so cut 5% of your operating and maintenance budget,’ and bless your hearts you do it,” Wells said.

“Stop it. What we don’t tell council is the consequences of doing those things.”

Once councils and staff buy into the idea of asset management they also have to understand it’s an ongoing process that's constantly in need of monitoring and updating.

Thompson-Okanagan communities are at different levels in terms of asset management.

“Take Kelowna for example,” Wells said. “We had some good leadership from (former city manager) Ron Mattiussi. Kelowna has done a huge amount of work, really good quality work. Kamloops was a little behind and they are coming along nicely.”

Mattiussi credited his predecessors with getting the asset management attitude firmly in place.

READ MORE: Inflation and 'asset management' behind big tax hikes in the Okanagan, Kamloops

Spallumcheen CAO Doug Allin is co-chair of Asset Management BC so when iNFOnews.ca asked for feedback from 17 Thompson-Okanagan municipalities that accessed grant money, it had the most detailed response.

“It’s very important to council that we are fiscally responsible and asset management is a huge part of that,” Spallumcheen Mayor Christine Fraser said in an email to iNFOnews.ca. “The more information we have, the better decisions we can make.”

Spallumcheen council in 2021 promoting asset management.

Image Credit: Submitted/Township of Spallumcheen

Osoyoos, on the other hand, did not respond, along with half a dozen other communities including the City of Kamloops.

There were 21 Thompson-Okanagan governments that shared in those $400,000 worth of UBCM grants and Kelowna was not one of them.

Here's a look at what some of them are doing with their share of the grant money:

Enderby: $26,000

A 2018 grant was used to assess the city’s roads, water and sanitary services and prioritize replacement planning. A 2021 grant was used for a “lifecycle assessment” of its arena.

The city embraced the idea of asset management as far back as 2012 when it implemented a 1% tax increase for that purpose.

“Although the tax increases over the years is not sufficient to address our asset management deficit, we have been able to leverage the funds to obtain senior government grants, which has made a significant impact to our asset management progress,” CFO Jennifer Bellamy wrote in an email.

Keremeos: $20,000

The grants in 2017 and 2018 were used to develop plans for things like maintaining its roads, water distribution system, sanitary sewer, storm drains, buildings, furniture, vehicles and equipment.

“Keremeos sees our asset management program as a living process whereby we continue to advance our ability to have continued asset maintenance and replacement strategies in place,” CAO Marg Coulson said in an email.

Lake Country: $10,000

After getting the grant in 2015 to assess its systems and practices, Lake Country hired an information manager to oversee its ongoing review of its water, sewer, storm water, mobility and parks and recreation systems.

“Asset management goes beyond the mere administration of assets, extending to a way of working that delivers diverse services to citizens and the community,” Greg Buchholz, Lake Country’s director of utilities, said in an email.

“Essentially, it involves reconciling the level of services provided to the community with their ability or willingness to pay for these services."

Logan Lake: $20,000

The 2015 and 2016 grants helped Logan Lake create integrated water, wastewater and road plans along with a 10-year vehicle replacement plan. It’s now in the process of updating its 2011 parks master plan.

Lumby: $10,000

The grant kickstarted Lumby’s planning process by first collecting the data then assessing the age, life expectancy and replacement costs of water, sewer, drainage, flood protection, roads, parks, vehicle fleet and natural resources.

While UBCM only lists the one grant, two subsequent grants helped further develop the process, Lumby director of Public Works and Engineering, Roger Hustron, said in an email.

Merritt: $10,000

Merritt’s grant was awarded in 2015. A further grant of $15,000 was approved in 2021 but cancelled after flooding prevented the work from going ahead. The city is focusing on its water and sewer systems.

“The objective is to minimize the building of new infrastructure that is not imperative to the community without significant external funding,” said an email from the city.

Peachland: $10,000

The district could not provide details of its 2015 grant but is currently seeking funding to conduct capacity reviews for its sewer, water and road infrastructure.

Penticton: $35,000

The city started the asset management process with a $10,000 grant in 2015 to create a “prioritization framework,” followed by two other grants in 2017 and 2018 to do risk assessments of water, sanitary sewer, storm water, roads and electrical assets. That has helped the city with things like setting utility rates to cover maintenance and future replacement costs. Plans call for similar work in other areas such as natural resources.

Spallumcheen: $15,000

The 2018 grant helped the township create its Integrated Asset Management and Climate Change Planning for Sustainable Service Delivery plan that was adopted in 2019.

“It allows council to make informed infrastructure decisions, improve governance, build financial capacity to renew infrastructure as well as operate and maintain existing infrastructure so that the municipality can continue to provide service effectively while identifying and managing risks and provide taxpayers with the best value for money,” it said in an email.

Spallumcheen spends $1.5 million annually on its road system and its asset management plan has helped it win $31 million in grant funding since 2017.

“The township’s reserve balances are a priority for council to review each year,” Mayor Christine Fraser said in the email. “Council is very aware of the global financial impacts to the community over the last few years and has worked hard to ensure that tax increases are balanced against the needs and wants of the community and the amount of risk the community can absorb.

“A water main may be engineered to last for 20 years but will it fail in 20 years? Can we look at amortizing that replacement value over 30 years… 50 years? What are those risks? This is the type of information that council considers when we look at a responsible asset management approach to budgeting. Where can we add value and where can we accept reasonable risk to help ensure our residents and businesses aren’t subject to huge tax increases?”

Thompson Nicola Regional District: $43,300

The regional district received four grants totalling about $43,300 between 2015 and 2018 and matched those funds to review its utilities, buildings, solid waste, recycling, fleet, equipment, water and sewer systems.

It has created a “criticality and probability rating tool” for each utility along with a “benchmark assessment report” for its solid waste and recycling services.

“Successful asset management requires building up reserve funds to be able to repair assets and replace assets at the end of their useful life,” the regional district said in an email. “Asset management planning is crucial to maintaining and replacing TNRD assets, and it’s also important, in some cases, for successful grant applications to do necessary projects.”

As an example, work done in 2017 helped the regional district get a $4.95 million grant in 2020 to help fund the Pritchard water treatment plant.

The regional district recently applied for another $25,000 grant and approved matching funds to develop a full asset management strategy and to provide ongoing training and workshops for staff.

It has also applied for grants for a $146,000 assessment of its water system and how it is being impacted by climate change.

Vernon: $27,500

Three grants from 2015 to 2019 helped fund things like reviews of Vernon's wastewater treatment and disposal system and inter-municipal fire training.

A 1.9% cumulative infrastructure tax levy was designed to reach the city's target for annual, sustainable investment in its infrastructure by 2022.

Along with its sewer system plans there are management plans for things like flood protection, roads, civic buildings and parks. It's planning four updates this year, including the O'Keefe Ranch Asset Management Plan.

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