Kelowna in good shape to weather COVID-19 storm but layoffs still possible - InfoNews

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Kelowna in good shape to weather COVID-19 storm but layoffs still possible

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April 20, 2020 - 2:04 PM

Kelowna Mayor Colin Basran encouraged everyone who can to pay their property taxes by July 2 so the City can keep operating and provide services like police, water and garbage collection.

But, at the same time, the City has the ability to borrow huge sums of money if need be.

“We’re asking the people who have the ability to pay to please do so because it would allow us to not have to borrow or to not have to reduce further services if need be,” Basran said during a news conference today, April 20.

He pointed out that 25 per cent of residents already pay their taxes through monthly mortgage payments and many others own their homes mortgage free.

The City also gets only about 35 per cent of its revenue from taxes, compared to some cities that get more than 70 per cent from taxes. The rest of Kelowna’s money comes from fees and reserves.

The City has cut about 10 per cent of its staff, mostly part-time and casuals in recreation services. Two of the City’s three recreation centres – all of which have closed – are operated by contractors so that looks like a small number of layoffs compared to some cities.

On the flip side, Kelowna has the ability to borrow huge amounts of money.

This afternoon, city council will consider passing a bylaw that allows them to borrow up to $150 million that’s essentially a line of credit that has to be repaid next year.

The province announced last week that cities can also borrow against their capital reserves for the first time. That would be interest free for up to five years but, finance director Genelle Davidson pointed out that would have a huge impact on future projects and existing infrastructure.

Davidson didn’t say how much that would amount to.

The province also said cities could hang on to the school tax portion of the taxes it collects. For Kelowna, that’s about $40 million. It would use that money before borrowing but it does have to be paid to the province by the end of this year.

If staff reductions are necessary, Mayor Basran said that would likely come from recreation and cultural services first then the airport but he noted the City won’t really know what actions need to be taken until taxes are paid, or not, by July 2.

The 10 per cent charge for missing that deadline has been moved to Sept. 1 but the City still has to forward money to regional, hospital and other agencies by Aug. 1.

On May 4, council will review its budget, looking at changes that could include a reduction in the 4.15 per cent tax increase that was projected in December for this year.


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