City proposes budget cuts, project delays and smaller tax bump

Photo: City of Kelowna

The City of Kelowna is proposing a reduced tax increase this year in the wake of the COVID-19 crisis.

A promised modified 2020 city budget will be brought forward to city council Monday, which includes lower operating costs and 2.1 per cent decrease in taxes.

That means the 2020 tax increase imposed on residents would be lowered from 4.15 per cent to 2.05 per cent.

“Difficult decisions are being thoughtfully and methodically made to ensure we can weather this crisis as we simultaneously plan for economic recovery,” said Genelle Davidson, financial services director.

“To reduce the taxation demand for the 2020 final budget, we propose ongoing and one-time cuts to base budgets, the elimination or delay of new positions and programs and the deferral of some capital projects.”

While the new budget does not include any new layoffs at city hall, it does mention the elimination or deferral of 11 new positions initially approved as part of the budget.

Projects including construction of the Central Okanagan Rugby fieldhouse in Rutland Recreational Park, the KLO Road/ Mission Creek Bridge replacement and the Houghton Road Active Transportation Development have all been deferred.

"Despite the financial challenges resulting from the COVID-19 pandemic, and in order to meet the demands of a growing population, it is our responsibility today to continue to deliver programs, services and infrastructure," staff indicated in its report for council.

The city also says 2020 spending will ensure essential services such as water, wastewater and sewer, police, bylaw enforcement and fire are maintained for the wellbeing and safety of our community, with measures put in place to keep staff and front-line responders safe.  

Typically, property taxes fund about one-third of city operations. Adoption of the revised budget would mean 25 per cent of operations would be funded through direct taxation.

“Many things remain uncertain, but readiness, resiliency and recovery are our goals as we navigate this evolving economic landscape,” said Davidson.

“We continue to be financially prudent and will adapt by monitoring, planning and making strategic decisions to help us meet the current and future needs of our community.”

The tax reduction comes as hundreds of businesses were forced to close, resulting in more than 2,000 layoffs within the city.

It is one of several measures the city has implemented to assist taxpayers, including delaying late penalty fees, supporting free transit and parking, and waiving several charges and fees.