A last-minute push to tap the city’s general surplus to slash the 2023 tax hike to 5% just narrowly failed by a 4-3 vote Thursday, leaving Penticton property owners on the hook for a 9.5% jolt instead.
The effort to draw on the accumulated surplus or possibly an incoming $7.2-million infrastructure grant from the B.C. government — which hasn’t yet specified the conditions attached to it — was led by Coun. Helena Konanz and supported by Couns. Ryan Graham and James Miller.
But to do so would have been a “terrible mistake,” warned Coun. Campbell Watt, who was a part of the last council that is responsible for a 3.3% deferred hike this year and the next two.
“This is not sustainable, it’s not something we can do every year. So, ultimately, instead of 3.3% next year, maybe we’re looking at an automatic 6% and that doesn’t make any sense to me. I do not want to follow up — I won’t say a mistake — but follow up a Band-Aid with another Band-Aid,” said Watt.
The main budget was approved by an identical 4-3 vote with Couns. Graham, Konanz and Miller opposed.
Through two full days of deliberations, council managed to shave just 0.2% off the 9.7% increase proposed by staff.
The 9.5% tax hike will see the owner of an average home worth $662,000 pay an extra $177 this year on top of utility rate increases that will tack on another $61.
For the average commercial property worth $1.2 million, the tax hit will be an additional $674 on top of an extra $380 in utility fees.
Those estimates prepared by city staff are based on a business tax multiplier of 2.22, which is up from 2.14 this year, but will be “revenue-neutral,” according to finance manager Angela Campbell, since residential property assessments grew at a larger rate than commercial assessments in 2022.
There was talk of maintaining the business tax multiplier at 2.14 though and it won’t actually be set until April.
Konanz’s bid to chop the tax hike to 5% came late Thursday afternoon just ahead of the final vote in what she pitched as an effort to support small businesses and residents who are struggling to keep up with inflation and a potential economic downturn on the horizon.
“We need to bring taxes down to a manageable point for people for the year and then we can get our house in order,” said Konanz, who noted the city’s general fund expenditures will be up 42% from 2020.
Throughout budget deliberations, Konanz frequently found herself on the losing end of 4-3 votes to cut costs along with Couns. Amelia Boultbee and Miller.
But by the time the final vote rolled around, Boultbee said she was satisfied with the books and the “lean team” in place at city hall.
“I’ve had contact with other government roles before where the waste is absolutely colossal and it’s easy to see where you can save. And I have to say that I’m not seeing it here at city hall. I’m not seeing that we have excess staff. I think we have staff in proportion to the services we are offering,” said Boultbee.
Ahead of final budget deliberations, council reversed a decision it made two days earlier and reinserted the $1.5-million for the final leg of the lake-to-lake bike route into the 2023 capital budget.
It was pulled out at the tail end of Tuesday’s meeting by a 4-3 vote with Couns. Boultbee, Graham, Konanz and Miller in support.
At the end of Wednesday’s meeting, however, Graham announced he had misunderstood the motion and would be seeking reconsideration Thursday.
During his explanation Thursday, Graham said he thought the motion was for $1.5 million to be spent on new bike lanes, as opposed to the final leg of the lake-to-lake route.
Graham acknowledged he’s been publicly opposed the lake-to-lake route, but now wants it over with.
“I just want to get these bike lanes done, completed and move forward,” he said.
Graham’s change of heart was questioned by Miller, who asked Graham if he spoke to anyone on council or staff Tuesday in the 90 minutes between the original vote and Graham alerting colleagues by email that he’d realized his mistake. Graham said he reached out only to city manager Donny van Dyk, then notified council.
Big-ticket budget items include four new firefighters at $442,000, two new RCMP officers at $408,000 and one civilian RCMP employee at $99,000.
The city’s annual operating expenses are pegged at approximately $115 million in 2023, up from $107.4 million budgeted in 2022.
The five-year financial plan contains three consecutive years of 3.3% tax increases to cover past deferrals, which were ordered by the previous council in November 2021 while the pandemic was raging and staff was proposing a 10% tax increase.