City of Kelowna Infrastructure and Engineering manager Joel Shaw outlines ways the city can get hundreds of millions of dollars from residents and developers to pay for roads, parks and buildings, Monday, April 1, 2019.

(ROB MUNRO / iNFOnews.ca)

KELOWNA - Developers are going to be hit first but everyone paying to use a City of Kelowna service won’t be far behind as the city tries to dig its way out of its $478 million deficit for new roads, parks and civic buildings.

City council was presented today, April 1, with a number of options by administrative staff to cut that infrastructure deficit by as much as $341 million over the next 10 years, if all options were implemented.

In all, the city has plans for $1.5 billion worth of projects over the next 10 years, but funding for only about $1 billion has been identified, leaving a deficit of $478 million.

“There seems to be a consensus among both the public in the community and developers in the community, that the parks development DCC (is acceptable) - we are ready for that,” Coun. Ryan Donn said after today's presentation. “Let’s take the easy wins when we can.”

Developers are charged fees called Development Cost Charges or DCCs when they build to help pay for things like new roads and parks. The cost charges collected for parks currently only pay to buy land, not to develop it.

The strongest consensus among councillors was to start charging developers to build parks, although Coun. Luke Stack sounded a cautionary note. He said such a move failed in the past because of strong resistance from developers.

City staff, anticipating council’s support, is already moving ahead on the idea. A report is expected to go to council on May 13, followed by a meeting with the Urban Development Institute two days later.

Next on council’s priority list is an increase in fees for city services such as ice rinks, recreation centres and theatres in order to offset the cost of replacing worn out facilities.

Not so widely praised, but not discarded all together, were things like Community Amenities Contributions and parcel taxes. Developers don't like Community Amenities Contributions because they feel forced to pay for even more things than they do now with no real ability to negotiate with the city. Parcel taxes are extra fees for each residential lot to pay for things like recreation centres.

Even if all the fees and charges under consideration were implemented there would still be a shortfall, so another future part of the discussion will be service levels. For example, the city could reduce the amount of parkland it wants for each resident or delay replacing some facilities.

The city started cutting into that deficit during the budget debate in December by adding a 1.95 per cent Infrastructure Tax to the general tax increase that totals 4.4 per cent for this year. A similar increase is planned for next year.

For the average homeowner, that means an extra $40 in taxes this year. New parcel and storm drainage fees could add $80 to $130 per year to the average tax bill.

If all the options presented to council today were adopted they would add $218 to $341 million to city coffers, but would fall far short of eliminating the infrastructure deficit. They would, however, add to the cost of new housing and boost everyone’s tax bill.

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News from © iNFOnews, 2019