Property owners in West Kelowna could be hit with a new tax.
City staff are raising the possibility of a so-called infrastructure levy to fund capital projects for which they say there is currently no money.
“As the community grows and critical assets age, our overall risk to level of service increases,” city finance director Warren Everton says.
“It may be time to start looking at an infrastructure levy similar to what Vernon and Kelowna have implemented in the last few years,” Everton writes in a report going to city council Tuesday.
West Kelowna’s total financial reserves of $30 million are said to be below those of similarly sized cities in B.C.
The comparable figures are $60 million in Vernon, $64 million in Penticton and $48 million in Campbell River.
West Kelowna incorporated in 2008.
“West Kelowna, being an 11-year-old city, has not had much time to build reserves,” Everton says.
Since incorporation, West Kelowna’s annual tax increases have averaged just under 3%. This year, however, the tax hike was almost 4%.
The city’s capital general fund will have a projected year-end balance of $4.3 million. But as much as $45 million would be needed to “fund all capital projects identified as capital-funded in the 10-year capital plan,” Everton’s report states.
This year, the City of Kelowna introduced a new infrastructure levy of almost 2% on top of the general tax increase of 2.5%.
Kelowna officials say an investment of $1 billion is needed over the next decade in municipal infrastructure. But without the infrastructure levy, only $573 million would have been available through existing revenue sources such as taxation and development cost charges, leaving a deficit of $477 million.
Kelowna’s new infrastructure levy will net the city $44 million over the next decade — 9% of the amount that’s said to be necessary to upgrade and improve roads, parks and civic buildings.
“The levy you’re proposing doesn’t solve our problem. It just makes inroads,” Coun. Luke Stack told Kelowna officials when the new tax was approved as part of the 2019 municipal budget.