Penticton council clashed over 9.5 per cent tax increase

Battled over tax boost

Penticton Mayor Julius Bloomfield says budget choices are "not easy decisions to make," but the contentious upcoming 9.5 per cent tax hike will go towards priorities like community safety.

Deliberations ended Thursday with the narrow adoption of the City of Penticton 2023 budget, and raising taxes was a significant sticking point for some on council.

Couns. Helena Konanz, Ryan Graham and James Miller all opposed the budget.

The previous council had deferred a 3.3 per cent tax hike during the pandemic, which is now baked into the 9.5 per cent raise and will come due for the next two years as well.

After two full days of deliberation, Coun. Miller suggested council could have "done a little better" and floated a simple 5 per cent tax and direction to staff to say "you're the people who have to make it work."

Konanz agreed with capping the increase at 5 per cent and just figuring it out before the tax comes into effect.

"We need to bring taxes down to a manageable point for people so that they can survive in the next year ... So we bring it down then we have [months] to get our house in order, to figure out what's going on here," Konanz said.

Coun. Boultbee balked at that thought process, pointing out they had just spent two days going line-by-line deliberating the budget and only managed shave 0.2 per cent off the originally proposed 9.7 per cent tax hike, because of so many pressing needs in the community like RCMP officers, firefighters, infrastructure and amenities upgrades.

"I would absolutely love to come back to the public and say we can help you at 5 per cent. But my understanding is that it's up to council to determine service levels. So it's not really fair or logical for us to go back to staff and tell them to do the impossible," Boultbee said.

"If we want it to be 5 per cent, we have to tell them what's coming out of the budget, and I think the time to do that is now. So if there's something that needs to come out of the budget, staff are here we are here, we've got everything in front of us. Please show me what can come out of this budget because I don't see it."

Konanz floated the idea of using a recently announced $7.2 million government grant coming to the city — only problem being, cautioned CAO Donny van Dyk, conditions on the use of that grant have not yet been communicated, meaning it may not be legal to use it to lower the tax rate.

"I'm having a bit of deja vu to last budget cycle, with using the COVID grant to defer taxes," van Dyk said, explaining its one of the reason this council is now facing three successive years of 3.3 per cent raises baked into the overall budget.

"The problem with using one-time grants to defer taxes is that eventually you run out of them."

Coun. Campbell Watt called artificially lowering taxes through borrowing or grants "a Band-Aid" that was a pandemic choice.

"I don't want to follow up a Band-Aid with another Band-Aid," Watt said.

At the end of the meeting, the $115 million operating expenses budget squeaked by with a vote of 4-3, Couns. Konanz, Miller and Graham opposed.

According to city staff, the 9.5 per cent tax increase will translate to the average homeowner an average $15 more per month and commercial property owners an average of $58 more per month.

Notably included in the budget are four firefighters and two RCMP officers, $12.6 million to repair or replace water, electrical and sewer infrastructure, and $15.2 million for various modern assets including a new community safety building, renovation to the soccer bubble, fixes to roads and sidewalks, updates to the tennis courts, a new fire truck and the completion of the lake-to-lake bike route.

Council deferred a final decision on the business multiplier until April, which may impact the average increases.

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