Council sets 2019 provisional tax rate increase, approves infrastructure levy

December 13, 2018

Kelowna City Council has set a provisional overall taxation increase of 4.43 per cent for 2019, following today’s all-day budget deliberation meeting. This includes a 2.48 per cent general municipal tax rate increase for 2019 and the approval of a 1.95 per cent infrastructure levy as one of the ways to address the City’s capital deficit.

The final budget and tax rate increase will be presented to Council in late April 2019.

Combined, the 4.43 per cent increase will mean an $88 increase on a City of Kelowna property tax bill, based on an average home assessed at $682,260.

The City’s net 2019 operating budget is $139.5 million. General municipal taxation accounts for 33 per cent of the City’s total revenue. As a financially resourceful municipality, the City’s other revenue sources includes grants, reserves and user fees.

The infrastructure levy is one of the ways the City can take action and responsibly invest in the future so that Kelowna continues to be a great place to live. The 1.95 per cent levy will cost $40 for the average household in 2019, and an additional $40 in 2020. The fixed rate will be included annually thereafter.

“Each budget presents its own challenges and difficult decisions, but is also an opportunity to be forward-thinking in balancing the needs of our community today and for future generations,” said George King, Financial Planning Manager. “The provisional budget and Council’s decisions aim to balance the community’s interest in maintaining existing levels of services while planning for significant infrastructure needs. Similar to an aging house, it’s important to maintain and renew what we already have. This is more cost effective than to wait until it gets to a point where it needs to be replaced.”

The 2019 budget aligns with and adopts the Imagine Kelowna principles and goals to serve the needs of our community so that Kelowna continues to be a vibrant, inclusive and sustainable city. Council’s decisions support investments in community safety, housing affordability, balanced transportation, renewal and expansion of parks and waterfront access and environmental resiliency.

Community safety remains top of mind. The 2019 Financial Plan will provide immediate solutions to increase downtown safety and cleanliness and will see the addition of 16 new frontline emergency personnel resources: six RCMP officers, two bylaw enforcement officers and eight firefighters (four each in 2019 and 2020).

As the community grows, so do the pressures for housing diversity and affordability. A new approach for 2019 will allocate $750,000 to acquire land specifically for affordable housing partnership opportunities. In addition, the Healthy Housing Strategy will be implemented and the City’s annual rental housing grants program will be increased.

As the largest capital expenditure, $28.4 million will continue to be invested to build on the successful momentum of delivering balanced transportation networks. Significant projects include the accelerated delivery of the South Perimeter Road and Gordon Drive extensions as a result of a successful Alternative Approval Process last year and the construction of the Ethel Street and Sutherland Avenue Active Transportation Corridors.

Creating beautiful public places where all residents and visitors can enjoy our spectacular outdoor natural environment is a priority. Investments in park and waterfront access in 2019 include: renewing Knox Mountain’s Paul’s Tomb Trail, providing interim waterfront access at the newly acquired Hobson Road park property, shoreline protection and waterfront pedestrian path between Strathcona and Royal Avenues and initiating Phase 2 construction at Glenmore Recreation Park with the installation of two grass sport fields.

Staff will proceed with applying for a $6.57 million senior government Community, Culture & Recreation Grant to help fund a $9 million City Park Promenade renewal project. Council has approved the project pending the success of the grant application. Plans would include promenade restoration, seawall repairs, shoreline restoration, a new boardwalk and pier along Cold Sands Beach and a new children’s playground.

Flooding, wildfire and slope stability are becoming an all-too-familiar local reality. Ensuring our community is well-positioned for these challenges is important to keep our community safe. Investing $1.5 million in capital storm drainage improvements will help us mitigate the impacts of flooding and climate change.

Last year’s Freshet had a $2.1-million combined capital and operating impact on City infrastructure. Council had approved an emergency $500,000 budget request to tend to immediate needs in 2018, and as part of the 2019 Budget have now approved $1.6 million needed to fund the remaining portion of repairs and recovery (Federal and Provincial government funding programs will fund $1.3 million, with the remaining $324,000 to be paid by taxation).

City Staff had proposed a 4.4 per cent overall taxation increase impact (2.45 per cent general municipal taxation and 1.95 per cent for the infrastructure levy) at the Dec. 10 Council meeting. Council sets the provisional tax rate increase requirement after reviewing the 2019 Financial Plan to determine which projects to fund and which projects to defer or cancel. Carryover requests will be brought to Council in March and the final tax rate increase will be decided by Council in April 2019.

To review the 2019 Financial Plan, subscribe for e-updates and for more information about the City of Kelowna budget, visit kelowna.ca/budget. For information about the infrastructure deficit and levy visit kelowna.ca/infrastructureplanning.