Kelowna city council has little room to move when it comes to spending your money - InfoNews

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Kelowna city council has little room to move when it comes to spending your money

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November 20, 2018 - 5:00 PM

KELOWNA - Kelowna city council is getting ready to make the tough decisions required to set your property tax increase for 2019.

That process actually started last summer and, technically, doesn’t end until revenue from new construction is calculated and the final tax rate set in the spring. But the big provisional budget discussions are happening over the next few weeks.

City council was given a two-hour overview yesterday, Nov. 19, of how staff does its job to get the budget to council.

The reality is, there’s a huge cost carried forward from past decisions, so council only affect a small portion of the budget, financial planning manager George King explained to council. Police, fire, city staff and other ongoing costs take up most of the tax revenue.

Kelowna collected $133.5 million in taxes this year, but $127.1 million was ongoing costs decided upon many years ago. So, in one sense, council only has control over $6.4 million in new taxes – or about 4.5 per cent of the total.

Of course, it’s not a straightforward tax to expenditure picture since there are various sources of revenues and ways to fund spending.

Kelowna's budget is consolidated to include self-funding utilities like water, sewer and the airport.

That brings the total amount of money spent by the city in 2018 to an estimated $518.6 million, only 26 per cent of which comes from taxes. Reserves and surpluses contribute another 25 per cent with Fees and Charges bring in 23 per cent.

The rest comes from a multitude of other sources and it takes an accountant to sort the “city” portion from the utilities.

The airport, for example, was projected to spend $67 million in 2018 but only brought in $32 million through things like fees charged to passengers and airlines. But it had a healthy cash surplus at the start of the year and borrowed money for new construction needed to deal with its rapid growth to the expected over two million passengers by the end of this year. Current plans call for the airport to be near to debt free by 2030.

With so many fixed costs just to maintain the status quo and deal with the cost of inflation, which Kelowna finance director Genelle Davidson says is different for municipalities than for the general public, it’s unlikely that any government is going to cut taxes – not that governments anywhere are known to do that.

No one is saying what the projected tax increase will be in Kelowna, but given the past practice of this council – which only has one new face this term – something in the neighbourhood of double the rate of the Consumer Price Index can be expected.

Provisional budget day in Kelowna is Dec. 13.


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