For the third year in a row, the city of Penticton will include a zero percent tax increase in its budget.
The 2013 budget was passed at Monday's City Council meeting, following five days of deliberations, in which the public was invited to provide feedback.
Mayor Dan Ashton said holding the line on taxes for the third year in the row was an incredible achievement and shows the city's dedication to fiscal responsibility.
"All staff and council members sharpened their pencils and reviewed this budget line by line to ensure spending is in the best interest of taxpayers as these tough economic times continue," he said.
To get there the city had to whittle down a $1.26 million deficit using its accumulated surplus and its interest stabilization reserve, a move two council members opposed.
Councillor John Vassilaki, who voted against the budget, said there were three reasons why he took issue. The first and most important being money should go toward upgrading the downtown core's aging infrastructure, specifically water and sewer, rather than reducing the deficit.
He is also concerned about what he called a band-aid solution to what is happening on the waterfront and the planned work at the Winnipeg Street and Westminster Avenue and Martin Street and Westminster Avenue intersections, which he called a waste of money.
"I am very disappointed for these reasons," he said. "I would have preferred to see the 100 block of Main Street, what we call the north part of the city, to be developed now. It would have tied in with two projects, the waterfront and the downtown, which makes more sense for tourism and economic development in the city.'
Councillor Helena Konanz said she originally had problems with the budget, because she doesn't think the city should dip into reserves to get a zero percent tax increase.
"I think we are going into really unusual times with the fiscal cliff across the border and this is not a time to dip into savings to avoid a tax increase, a mild one would be OK," she said.
Later in the meeting, when she realized no one but Councillor Vassilaki would vote for a tax increase, she decided the responsible thing to do would be to cut spending instead.
Among her suggestions were pushing forward downtown revitalization to 2014 to save exactly $1.2 million.
"I want to do the downtown revitalization," she said. "But we can't have a zero tax increase and do everything we want to do in this city, we also need responsible spending.
I still think staff did a good job in whittling down spending, it's just looking in the crystal ball and being cautious because of what is happening with the U.S. and global economy."
Key initiatives of the budget include:
- West Okanagan Lake waterfront enhancement, featuring a multi-use path reconstruction along Lakeshore Drive. This project is fully maximized with grant support, as the City will contribute $650,000 and gas tax funding will cover $1.2 million.
- The multi-phase Downtown Penticton revitalization process will begin with $1.25 million approved to refurbish the Martin Street-Westminster Avenue-Winnipeg Street area. This project will not only create a gateway entrance to the downtown, but support vibrancy created with the opening of Landmark Cinemas this fall.
- Skaha Lake will get a new playground, which will be constructed in partnership with the community. The South Okanagan Children’s Charity is fundraising to contribute funds toward the “discovery park” concept, and the City has committed $85,000 to the project.