For the record: South Perimeter Road

February 9, 2018

Readers of a recent letter Taxpayers are the real losers in the Kelowna Daily Courier, criticizing the decision to accelerate construction of South Perimeter Road (SPR), should be aware that it contains incorrect information.

The biggest error is the claim that the city will provide the developer behind this project with a 28 per cent Development Cost Charges (DCC) subsidy “to offset any road, park, sewer and water servicing costs needed by his subdivision project.” This is simply not true.

Under the proposed agreement, a third-party developer will finance and construct SPR along with an extension of Gordon Drive for no more than $9.263 million. While the City will compensate the developer with DCC revenue collected in the Southwest Mission, this does not exempt the developer from paying DCCs related to any of its own projects it may have in the benefitting area. The developer is not getting a subsidy, rather they are being paid for constructing the road, as would any other third-party contractor that does work for the City.

It is anticipated to take five to seven years to completely pay for this construction. The 35-year period mentioned is the maximum amount of time allowed for repayment, not the amount of time it is actually expected to take.

The writer also accuses Kelowna’s Mayor and City Council of ignoring taxpayers with this decision and diverting funds away from “much-needed and long-sought after road upgrades to Lakeshore Road.” On the contrary, before proceeding with this project, the City of Kelowna sought extensive community input on the impact of accelerating SPR on other planned road projects in the Mission area, including Lakeshore Road. The results showed that there is strong support for proceeding with SPR.

More than 300 residents attended an open house and in exit surveys, 62.5 per cent of respondents indicated they support accelerating construction of SPR. This was backed up by a statistically valid survey of 300 randomly selected Mission area residents. It found that 64 per cent of residents support the accelerated construction.

In addition, proceeding with SPR does not mean the City will be unable to go ahead with other road work. We are intentionally retaining 20 per cent of DCC revenues to make sure we have the flexibility to accommodate critical projects that need to be completed before SPR is repaid.

Ultimately, residents will have the final say on this project through the Alternate Approval Process. And while it’s a good thing for residents to debate the merits of the project before making a final decision, we believe it is important to ensure the dialogue is based on facts.    

Johannes Säufferer
Real Estate Services Manager
City of Kelowna