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

The widespread outrage in Osoyoos residents expected to pay an additional $1,500 in taxes, sewer and water fees should not have come as a surprise to Osoyoos Mayor Sue McKortoff.

After all, this is her third term as mayor after serving one term as a town councillor so she brings more than a dozen years of experience to the job of setting budgets.

“I didn’t realize there were all these different ramifications until it was sort of brought up because that’s the way, in Osoyoos, we’ve always done it,” McKortoff told iNFOnews.ca.

The way Osoyoos has always done it is to include water and sewer fees with the annual property tax bill, whereas many other communities bill for water and sewer use separately.

That way of billing means major increases to water and sewer fees are combined with council’s decision to hike property taxes by 13.6% to create a triple whammy that will increase that July 4 bill by almost 40%.

READ MORE: Osoyoos residents are in for massive tax hikes

So, why did McKortoff and fellow councillors not start tackling the need for big spending years ago so it didn’t come all at once?

“For many years we’ve said OK, what are we going to do in terms of budget and let’s try to keep it at 3%,” she said. “Even then people said: ‘Why does it have to go up 3% every year?’”

Then came the COVID pandemic, which essentially killed tourism – one of the mainstays of the town’s economy. Council took pity on residents, keeping taxes at 0% in 2021 and 2.4% in 2021.

“At that point, things kind of got left for awhile because we had so many other things, the pandemic and all those issues to deal with,” McKortoff said. “Things were kind of not attended to as quickly as they should have been.”

Osoyoos is not alone. Former Kelowna city manager and now council trainer Ron Mattiusi told iNFOnews.ca that many other BC communities took a similar approach to dealing with festering replacement costs for major infrastructure.

“A lot of councils are saying: ‘Oh no, I think we’re fine. I’m not prepared to increase taxes in my term to replace something we won’t need to replace for 10 years.’” he said. “But you’re talking about millions of dollars. It’s not like, in 10 years, they’re just going to magically have the $60 million or whatever to replace a wastewater treatment plant.

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

It’s not that Osoyoos council has totally turned a blind eye to the fact its water system needs major upgrades.

“We tried this a couple of years ago,” McKortoff said. “We tried to get a grant for the water treatment plant but we didn’t have all the other pieces organized. This time, we think we’ve done a better job of proving what we’ve done, what we’re willing to do and that helped. That worked.”

What has worked is that a master plan has been adopted for the water system that shows it not only needs more capacity – it was hard pressed last summer to provide water to fight wildfires – but a water treatment plant is also needed to deal with a heavy manganese load in town wells and trace organic compounds.

The town has secured a $9 million provincial grant towards what, initially, was thought to be an $11 million project.

“We have to make sure we get the right sized water treatment plant,” McKortoff said. “Do we have the right pipes for it? Do we have the right treatments? It’s probably going to cost more than we originally thought.”

On the sewage side, one of the cells in the sewage lagoon failed last year and had to be replaced so that put a strain on finances.

But the town is also facing the needs of a growing community and the pressures of being a summer tourist destination.

“So, 5,500 people pay for things and we get 20,000 people here in the summertime,” McKortoff said. “The 14 resort communities in BC – we meet often and we talk about how we should check with the tourism minister and say: ‘You know what? We not only need more money – not just the hotel tax part – but we also need help with the infrastructure because people here are paying for it and the visitors that come here are paying the hotel tax and not anything else.’”

On top of all this comes the provincial government requiring BC municipalities to have new zoning bylaws in place by June to allow for denser infill housing.

“They say we’ve got to build these houses so that means we’ve got to put in water and sewer and make sure that’s safe and up to code as well,” McKortoff said.

While water and sewer make up most of the increase on the July tax bill, much of the 13.6% property tax increase is to start building reserves to deal with the growing need to maintain, enhance and replace other infrastructure, like roads and recreational facilities.

Given the public backlash, council will consider a notice of motion at its Jan. 9 meeting to rescind final reading of its budget and five-year plan in order to look at possible changes.

Last month, Osoyoos CAO Rod Risling indicated that motion was only dealing with the property tax portion of the bill but, in an email to iNFOnews.ca, he’s now said that he believes the intent is to talk about water and sewer rates as well, which is how McKortoff understands the motion.

READ MORE: Partial grassroots victory may not keep Osoyoos tax and fee hike much below 40%

If that motion passes as expected, a special council meeting will be held on Jan. 16. Residents are encouraged to send questions in by email in advance of that event "so that we can understand what it is we need to be talking about," McKortoff said.

“It’s an open council meeting so it will be run like a council meeting,” she said. “We are going to explain what the budget is and what the reasons for doing this are. We will be taking notes. We will not make any decisions at that meeting. Hopefully, they can ask questions. If we can answer them then, OK. If we can’t, then we will absolutely take notes and go back and answer them when we have the information.

“We are absolutely open and willing to make some changes. If that is done, we also need to point out the ramifications of making changes.”

That could mean, she suggested, borrowing money for sewage system upgrades rather than collecting the cost through user fees. Ultimately, of course, loans have to be repaid over time through those same user fees.

The final budget doesn’t actually have to be adopted until May 14.

To contact a reporter for this story, email Rob Munro or call 250-808-0143 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.

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