Mayor Basran touted city's financial shape during chamber event

City in good financial shape

Kelowna's mayor says the city is in better shape financially than many others in the province as local governments navigate through the uncertainty of COVID-19.

But, speaking during a virtual Chamber of Commerce luncheon, Colin Basran warned that any measures the city takes to assist residents and businesses, including lowering taxes or postponing capital projects, will have a negative impact.

"Borrowing is not free," said Basran, referring to measures allowing municipalities to borrow large sums to make up for lagging tax revenue, and to carry debt for up to a year.

"Neither is pushing back much needed projects."

Basran did say the city is in good financial shape at the moment, because only about one third of its revenue actually comes from taxation.

The city, says the mayor, gets the other two third from reserve and fees and charges.

Some municipalities rely more strongly on taxation, as much as 70 per cent in some cases he indicated.

However, as the city faces the reality that many businesses forced to close their doors, and residents out of work as a result, will not be able to pay their taxes on time, or at all, decisions on budget cuts and deferral of capital projects are imminent.

City council is expected to review a series of cost-cutting measures on May 4.

Those decisions says Basran, including the prospect of laying off more city hall employees, will be difficult.

To date, the city has laid off 10 per cent of its work force, most in the Active Living department and at the airport.

The massive building project at Kelowna International Airport has also been put on hold as airport revenues, which pay for those projects, dries up.

Basran reiterated that, while residential tax penalties have been pushed back to Sept. 2 and business penalties to the end of September, those who can afford to pay their taxes on time need to do so to keep the city's cash flow moving.

As for restrictions around the city, Basran says the city does have a plan in place to close city parks and beaches if such a mandate comes down from the provincial health officer.

"Dr. Bonnie Henry has no intention to do that unless physical distancing measures are not met."

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