City budget

Inside the City's budget

On Monday, April 29, 2019 Council approved the 2019 Final Budget, setting a 4.1 per cent tax demand increase. This includes revising the infrastructure levy to 2.27 per cent and 1.83 per cent for the municipal tax demand.

The combined 4.1 per cent increase means the owner of a single-family home with an average assessed value of $684,450 in Kelowna will pay $2,072 in municipal taxes, an annual increase of $81.49 (or $6.79 per month or $1.56 a week).

Read the 2019 financial plan  Sign up for budget e-updates

The City of Kelowna has been awarded the Government Finance Officers Association (GFOA) Distinguished Budget Presentation Award 17 years in a row. The award program was established to encourage and assist local governments to prepare budget documents of the very highest quality.

Inside the 2019 Budget

This year’s budget highlights the City’s adoption of the Imagine Kelowna vision into the work we do by delivering on a number of the principles’ goals: embracing diverse transportation options, creating great public spaces that bring people together, being resilient in the face of climate change, and building healthy neighbourhoods that support a variety of households.

2019 budget highlights
  • Investments in downtown safety and cleanliness
  • Bolstering first-responder resources with 18 new frontline and support staff personnel
  • Allocating funding for land acquisition specifically for affordable housing partnership opportunities as a new approach towards the housing pressures faced by the community
  • Delivering on balanced transportation networks with the construction of both the Ethel and Sutherland Avenues Active Transportation Corridors, and the accelerated delivery of South Perimeter Road and Gordon Drive extensions
  • Renewing and expanding parkland and waterfront access including City Park, Knox Mountain’s Paul’s Tomb Trail, Glenmore Recreation Park and interim access at the Hobson Road park property
  • Investments in storm drainage improvements to mitigate impacts of flooding and climate change
Plans that influence the budget

A variety of City plans and strategies guide the decision making included in the City's annual budget. These include:

Where the money goes

Kelowna is a vibrant, growing city where your tax dollars help create an active, inclusive and safe community, strong economy, clean, healthy environment, and resilient, well-managed infrastructure. It has become a place where 94 per cent of residents say their quality of life in Kelowna is good or very good and 79 per cent say they receive good value for their taxes (2018 Citizen Survey).

What your tax dollars pay for

Your municipal tax dollars pay for a wide variety of projects and services, from Police and Fire services to parks upgrades and maintenance, transportation and transit to active living and cultural services.

About a quarter (24 per cent) of the City's funding for 2019 will come from property taxes . The remainder of City funding comes from other sources such as reserves & surplus, fees & charges, and borrowing. 
 

 

Learn more about the City's budget by watching this video:

Where the money comes from

Cities pave our streets, fight crime and fires, bring water to our taps, pick up waste and recycling, build and maintain our parks, protect our creeks and wetlands, and provide opportunities for us to get active.

Overview of City revenue sources

Every year presents its own budget challenges and difficult decisions and the City’s annual budget aims for a balance between setting a reasonable tax rate and delivering services expected by residents and businesses.

Kelowna is one of the most fiscally responsible mid-sized cities in Canada, raising approximately three quarter of revenues from sources other than taxation. In our 2018 Citizen Survey, we heard that 79 per cent of residents say they receive very/fairly good value for their municipal tax dollars, and 87 per cent continue to say they are satisfied with the overall quality of services provided by the City.

Revenues

The City of Kelowna raises revenues through:City Funding, where the money comes from 2019 graph

Municipal funds

The City’s resources and operations are separated into various funds. The use of these funds is restricted by the Community Charter and associated municipal bylaws.

General fund

  • The City's largest fund which covers all municipal operations (aside from the utilities and airport funds)
  • Not allowed to operate at a deficit

Water fund

  • Operates the water utility within specific areas of the City not served by water districts
  • Revenues within this fund, or prior years’ surplus, must be sufficient to cover all operating and capital costs of this utility on an annual basis

Wastewater Fund

  • Carries out the capital construction, operation and maintenance of wastewater treatment including sewer mains, lift stations and treatment facilities
  • Revenues generated in this fund, or prior years’ surplus, must be sufficient to offset all operating and capital costs of this utility on an annual basis

Electrical fund

  • FortisBC operates the City of Kelowna's electrical utility, with the City receiving guaranteed annual funds.

Airport fund

  • Operates the Kelowna International Airport
  • Responsible for capital construction and ongoing administration, operation and maintenance
  • This fund is required to be self-sufficient so that revenues generated must offset all operating and capital expenditures

Natural gas fund

  • The Natural Gas Legacy Fund was established in 2001 with a 35-year capital lease of the gas distribution system within the City and a 17-year operating lease back to FortisBC Energy Inc. On Oct. 31, 2018, this operating lease back agreement was terminated and the Natural Gas Fund was dissolved. The termination payment, as well as the balance of the Natural Gas Fund were contributed into the new Legacy Reserves in the General Fund.

Land sales reserve fund

  • Sales proceeds from all properties disposed of by the City are required to be placed in this reserve fund
  • Council may, by bylaw, use this fund to purchase land for general municipal or utility purposes

Parking reserve fund

  • Provide funds to purchase land for parking lots, develop on-street parking and to construct parking lots or parkades
  • The General Fund appropriates net revenues from the operations of parking lots, parkades and parking meters to the Parking Reserve Fund

Capital works, machinery and equipment reserve fund

  • Provide funds for such items as the purchase of replacement equipment, retirement of capital debt and replacement of cemetery property
  • Revenue for this reserve is provided from various sources within the General and Utilities Funds

The City of Kelowna also maintains reserves for future expenditures. In the financial plan the use of these reserves for future expenditures is shown under Accumulated Surplus for either revenues or expenditures.

Deferred development cost charges

  • Collected to provide funding for required expansion of roads, drainage works, water works, sewer works, parkland acquisition and wastewater treatment facilities resulting from new development
  • Funds collected may only be used for the specific purpose and in the specific area for which they were collected
Reserves, grants & other revenue

Reserves

Maintenance of adequate levels of reserves and surplus continues to play a significant role in achieving a level of financial stability for Kelowna taxpayers. The City maintains Reserve Funds and General Reserves in order to protect the current and future financial viability of the municipality. Reserve funds are statutory reserves which represent funds that have been put aside, or reserved, for specific purposes. General reserves are reserves that may be used for future operating or capital expenditures. 

Reserves are regularly used to ensure that existing City equipment and infrastructure can be maintained and to ensure that unusual or unforeseen operating conditions can be met without the need for extraordinary tax increases.

Grants

The Ministry of Community & Rural Development provides infrastructure funding to local governments through a variety of grant programs. In 2009 and 2010, the City benefited from economic stimulus funding from provincial and federal governments under Canada's Economic Action Plan. Program funds have been fully allocated from this program.

Other revenue sources

Public/Private Sector Partnerships

To provide the services its residents want, Kelowna has nurtured many partnerships with individuals, community groups and private-sector companies. The City of Kelowna has an award-winning, economically-innovative team of professionals who have launched a number of differing partnering projects to help provide community facilities, programs and services without increasing general taxation.

Major recreational/cultural facilities are budgeted with substantial emphasis on funding from public/private sector partnerships (P3). P3s are effective tools to cost-effective service delivery structures.
 
The City entered into a public/private partnership for:

  • Prospera Place
  • Capital News Centre

The Kelowna Family Y is an example of a public/not-profit partnership.

Municipal Finance Authority

The City of Kelowna benefits from access to capital financing from the Municipal Finance Authority of BC. With triple-A credit ratings, the Authority has the ability to attract capital investments and make funds available to local governments at interest rates that are the lowest in Canada for municipal issuers. Since the Authority's credit rating exceeds those of chartered banks, its rates of borrowing are below those offered by these banks.

The City has accessed low-rate loans to fund :

Previous budgets

Each year, we build a budget that balances setting a reasonable tax rate and delivering services expected by residents and businesses. Take a look inside previous years' budgets and read past Financial Plans.

2018 Budget

Kelowna City Council approved the final 2018 Financial Plan, with a municipal tax increase of 2.99 per cent – the lowest it has been since 2014.

“It’s not uncommon for there to be a change from provisional to final budget,” says Financial Planning Manager George King. “Our role is to manage finances to ensure residents continue to enjoy City services they have come to expect, receive value for their tax dollars and that we continue to protect our infrastructure. The 2018 budget delivers just that, while reducing the tax rate from what was anticipated back in December.”

The 0.61 per cent reduction since Provisional Budget in December is a result of debt interest rate resets and increased revenue from the FortisBC Gas Franchise Fee and City investments. The reduction has been partially offset by nine additional items Council approved on Monday.

The 2018 Budget prioritizes safety with a total of 20 frontline safety personnel being added this year – this includes four bylaw officers added at Final Budget for ongoing safety in the downtown area. At Council’s direction, Final Budget also includes the development of Phase 3 of Rutland Centennial Park to expand the playground, infrastructure and irrigation for the park.

Through strong financial management, taxation for the City of Kelowna’s 2018 Budget accounts for 26 per cent of the City’s total revenue needed to deliver services to residents. Other revenue sources come from grants, reserve funds and fees and charges.

Council sets the tax rate requirement after reviewing the Financial Plan to determine which projects to fund and which projects to defer or cancel, balancing the community’s interest in maintaining existing levels of services while planning for significant infrastructure needs.

For 17 years, the City has received the annual Distinguished Budget Presentation Award, and most recently for the 2018 Budget. Presented by the Government Finance Officers Association, the award recognizes the City’s achievement in meeting the highest principles of governmental budgeting.

For more information, review the 2018 Financial Plan that includes Council's changes to Provisional - volume 1 on Dec. 14, 2017, and the Carryover - volume 2 document reviewed and adopted by Council on March 19, 2018. Final budget was presented to Council for review/adoption on April 30, 2018.

2018 Financial Plan summary

 Actual 2016Revised 2017Final 2018
General revenues(12,259,088)(12,120,800)(12,406,798)
Net operating budget120,106,984127,044,820133,223,025
2016 surplus151,970  
Pay-as-you-go-capital11,880,18212,160,00012,664,940
Taxation demand119,880,048127,084,020133,481,167
    
New construction tax revenue (1,667,000)(2,600,000)(2,600,000)
    
Fire Department  1.59%
Other  1.40%
Net property owner impact4.11%3.84%2.99%

 

2017 budget

Every year presents its unique budget challenges and difficult decisions. The 2017 budget is about supporting core City services affected by population growth, finding innovative ways to reduce costs and constantly improving City services.

During the City Manager’s preliminary budget meeting with Council in September, three priorities emerged and the 2017 budget will reflect City investment in:

  • areas that are directly impacted by growth (e.g. development, homelessness)
  • processes that improve how we work and save us real money (e.g. cost savings from new energy technologies)
  • projects that improve the services we provide (e.g. enhancing online service)

This year’s proposed 3.84 per cent taxation increase is necessary to meet previous years’ commitments and provide the resources or funding needed to keep up with our growing population, including our homeless population.    

For more information, review the 2017 Financial Plan that includes Council's changes to Provisional - volume 1 on December 15, 2016, and the Carryover - volume 2 document reviewed and adopted by Council on March 13, 2017. Final budget was presented to Council for review/adoption on May 1, 2017.

Meeting the needs of a growing city

As an innovative City, we are agile enough to adapt when new and growing issues arise, such as homelessness.

Homelessness has intensified as a concern in cities across the country in recent years, and Kelowna is no exception. It requires a focused response from all levels of government, including the local level. Developing a balanced strategy to address homelessness in Kelowna, such as adding enforcement and support staff, will be an ongoing focus of City budgets. As financial and staff resources are diverted to address homelessness, other City services may receive less funding to minimize the tax demand.

Community safety continues to be a significant part of the City’s budget, with requests brought forward for two new RCMP members, ongoing RCMP contract costs, continued work on the Police Services Building, Glenmore Firehall upgrades, needle sterilization and disposal, a safety coordinator and the Homelessness Strategy term position.

2017 Financial Plan summary

 Actual 2015Revised 2016Final 2017
General Revenues(12,421,826)(12,211,640)(12,120,800)
Net operating budget113,008,079120,062,230127,044,820
           2015 surplus135,594  
Pay-as-you-go capital12,819,59412,028,84012,160,000
Taxation demand113,541,441119,879,430127,084,020
    
New construction tax revenue (1,456,700)(1,667,000)(2,600,000)
New BCAA desktop review revenue(940,000)00
    
Police Services: building & contract1.77%1.97%1.56%
Other1.43%2.14%2.28%
Net property owner impact3.20%4.11%3.84%
2016 budget

Every year presents its own budget challenges and difficult decisions. This year, the City budget focuses on innovation, finding new ways to generate revenue and supporting core services; foundational support that may not be as visible as major construction projects, but just as important.

Council approved final budget requests on April 25, 2016 and set a 4.11 per cent increase. A tax rate of 4.11 per cent means the owner of a single-family home with an average assessed value of $501,410 will pay $1,861 for the municipal portion of their property taxes. 

A City property tax bill will also include other user fees such as curbside collection and levies for other taxing authorities (e.g. School District, Regional District of Central Okanagan, Library, Hospital and B.C. Assessment Authority). 

The increase is slightly lower than the 4.12 per cent increase approved by Council at the provisional budget deliberations in December 2015. 

City Manager's Message

From the City Manager's message from the provisional Financial Plan: 

The 2016 Financial Plan presents Council with responsible choices that follow through on [...] priorities while keeping property taxes and fees affordable. A corporate culture of innovation and continuous improvement continues to produce the highest value for citizens when delivering Council priorities.

Documents

For more information about this year's budget, check out the full financial plan ( online magazine ) or the following PDFs:

Financial Plan Summary

General FundActual
2014
Revised
2015
Financial Plan
2016
General Revenues(12,405,223)(11,944,730)(12,211,640)
Net Operating Budget106,097,818 112,777,905120,062,230

2014 Surplus

 111,133  
Pay-as-you-go Capital13,894,29412,707,54512,028,840
Taxation Demand107,698,022

113,540,720

119,879,430
New Construction Tax
Revenue

 (1,452,200)

(1,456,700) (1,667,000)
New BC Assessment
Desktop Revenue
 (940,000) 
Protective Services 1.77%1.97%
Other 1.43%2.14%
Net Property Owner Impact2.50%3.20%4.11%

 

2015 budget

Based on the 2015 Financial Plan, Kelowna's property tax increase for 2015 is 3.2 per cent, an average increase of $55.42 for a Kelowna homeowner.

With work beginning on the new Police Services building and Police contract cost increases, Protective Services will account for more than one-half of the tax demand in 2015: 1.77 per cent is for the new Police Services Building project and Police contract cost increases associated with indirect costs for pension and recruit training; and 1.43 per cent is for all other City operations and capital projects in 2015.

Property taxes will provide $113.5 million of Kelowna's overall $477.3 million budget. Taxation makes up 24 per cent of total revenues.

A total of $212.7 million will be invested in capital projects in 2015. 

2015 Financial Plan     

Financial Plan

2014 budget

The provisional 2014 Financial Plan sets an average municipal tax increase of 2.49 per cent. Property taxes will provide $107.9 million of Kelowna's overall $288.8 million budget. Taxation makes up 25 per cent of total revenues.

A total of $44.5 million will be invested in capital projects in 2014.

2014 Financial Plan   

 Carryover Requests Volume Two

 Final Budget Volume Three