Summerland council moves ahead with infrastructure funding amidst pushback from citizen watchdog

The ongoing dispute between Summerland council and local watchdog Brad Besler resurfaced at Tuesday’s council meeting, as Besler again objected to the funding plan for two downtown infrastructure projects.

Last year, council approved borrowing $5 million from the provincial government to help finance upgrades to Wharton Street and Victoria Road, with the total project cost estimated at $12 million. Council used the Alternative Approval Process (AAP), which allows borrowing to proceed unless at least 10% of registered voters object. The bylaws received 7% and 9% opposition, respectively — below the threshold — so the borrowing was approved.

However, a recent judicial review filed by Besler has delayed the long-term borrowing. In response, council has opted to use reserve funds to keep the projects on track.

“As you know, the District is prevented from long-term borrowing until my judicial review is heard,” Besler told council. “Because of that, CAO Graham Statt has recommended using reserve funds instead.”

Statt maintains the judicial review is “without merit,” but Besler disagrees. He said if the court rules in his favour and voids the AAP, taxpayers may face significant cost increases.

“He claims that if borrowing resumes, reserves will be repaid with interest,” Besler said.

“But if the District loses and the AAP is overturned, repayment would require a major tax hike.”

Besler argued the AAP process was flawed, alleging that staff withheld key financial data from both council and the public. “That was unreasonable and procedurally unfair,” he said. “It’s not just me objecting. Many residents are upset.”

He cautioned that depleting reserves now could be risky. “Unexpected costs can arise. Using almost all of our roads, water, and parks reserves would be financially reckless,” he warned.

Statt confirmed that the judicial review has paused the approved borrowing, which would have allowed repayment over 25 years at affordable rates.

“The projects have been council priorities since 2022,” said Statt. “We’re now using taxpayer funds to defend this litigation, which we believe is meritless.”

The case will be heard in June, and a ruling is expected within two months. If appealed, delays could extend further. Statt warned that even a one-year delay could raise project costs by $250,000 to $620,000 due to inflation and contract uncertainties.

The Ministry of Municipal Affairs has confirmed that municipalities can use reserve funds through internal borrowing. “If the review is dismissed, long-term borrowing can resume and reserves will be repaid. If not, we’ll need to consider a tax increase or restart the AAP process,” said Statt.

David Svetlichny, Director of Finance, outlined the changes in funding. The Wharton Street upgrade remains budgeted at $8.56 million. Originally, $3.365 million was to be externally borrowed. Now, the revised plan proposes $1.8 million from the roads development reserve, $240,000 from the storm drainage reserve, and $400,000 from the parks development reserve. Another $912,000 will come from federal gas tax funds, delaying two capital projects planned for 2029.

Under the original plan, borrowing was spread over 25 years with annual payments of $232,000 — about a 2.15% tax increase or $40 per year for the average homeowner. Under the internal borrowing plan, the $1.81 million will be repaid in five years at $410,000 annually — resulting in a 3.7% tax increase or $69 per year.

The Victoria Road project remains budgeted at $3.85 million. The original plan included $2.69 million in borrowing. The revised plan includes $1 million in new senior government funding, allowing a reduction in borrowing. The District now plans to borrow $500,000 from the water capital reserve and $845,000 from the parks dedication reserve.

With the new grant, the external borrowing is reduced to $1.639 million, repaid over 25 years with annual payments of $117,000, adding $10 to annual property taxes and $10 to water bills. If the judicial review is upheld, internal borrowing of $1.34 million over five years would mean annual payments of $295,000 — raising taxes by $50 per year.

Coun. Richard Barkwill supported the reserve fund strategy, saying it could reduce interest costs.

“It’s like choosing between financing options for a car. You need it either way,” he said.

Coun. Adrienne Betts said council followed due process. “These projects were prioritized in 2022. We have approval to proceed.”

Deputy Mayor Erin Trainer expressed confidence in the funding strategy. “We’ve reviewed this with the province, lawyers, and other municipalities. I believe in the process,” she said.

Mayor Doug Holmes emphasized public support. “Infrastructure was a top election issue in 2022. We informed residents, businesses, and schools throughout. Legal challenges are unfortunate, but we believe we have the mandate.”

Meanwhile, Besler has launched a second legal action. In February, he filed a lawsuit alleging the District withheld financial information about a $2.1 million expense related to the sewage treatment plant during the AAP process. He claims staff knew by May 2024 that a new pump gallery was needed but didn’t inform council or the public until January 2025.

“The District failed to issue a press release and intentionally withheld financial data,” Besler wrote in his court filing.

Coun. Doug Patan criticized staff during a January meeting. “As the engineer, you should have provided base pricing earlier,” he told a project consultant.

Besler said he first learned of the $2.7 million shortfall from the Penticton Herald.

In another legal development, a judge recently overturned a restriction limiting Besler to one Freedom of Information (FOI) request at a time. Justice Briana Hardwick ruled the previous order was overly broad, especially since it applied to his family members.

“The order is quashed and sent back to the Office of the Information and Privacy Commissioner (OIPC) for reconsideration,” she ruled.

While Besler won on procedural grounds, the FOI process will not restart automatically. CAO Statt said the District is reviewing its legal options. “The order was set aside due to notice issues — not because the OIPC’s conclusions were legally flawed,” he said.

Barkwill commented on social media that the outcome is unlikely to change. “The OIPC may come to the same decision after resolving the notice issue,” he said.

After a lengthy debate, Summerland council voted unanimously to proceed with internal borrowing to complete the Wharton Street and Victoria Road upgrades.

This article is published as part of the Local Journalism Initiative.