Press release from the City of Kelowna on May 4, 2020:
In recognition of the financial challenges presented to many residents as a result of the COVID-19 health crisis, the City is cutting the provisional tax rate increase in half, reducing it to 2.05 percent from 4.15 percent. The amended final 2020 Financial Plan was approved by City Council on Monday, May 4.
The combined 2.05 per cent increase means the owner of a single-family home with an average assessed value of $676,100 in Kelowna will pay an annual increase of $43 in municipal taxes instead of the $86 approved in the Provisional Budget. The tax rate cut means that the City will reduce planned spending for new capital projects, defer or eliminate new positions and reduce operational budgets across City departments.
In December 2019, Council approved an overall tax demand increase of 4.15 per cent. However, due to the COVID-19 pandemic and its ripple effects on the economic and financial situation for its residents, the City has found areas to reduce or hold-off on spending in order to support residents where it can during this challenging time.
“This year, the annual budget prioritizes keeping the taxation demand as low as possible while ensuring we can maintain essential services and continue to invest in important projects that will make a difference for our residents,” said Genelle Davidson, Divisional Director, Financial Services. “We are taking action to support our residents where we can as we work towards financial stability and eventually, economic recovery.”
The City continues to be financially prudent and is adapting by monitoring, planning and making thoughtful and methodological decisions to help meet the current and future needs of the community. “Taxation is just one of many tools in our toolkit,” said Davidson. “The City’s anticipated revenue declines will be addressed with a combination of cost reductions, one-time funding from reserves and borrowing if necessary.”
The City’s net 2020 operating budget is $148.8 million. General municipal taxation in 2020 will account for 25 per cent of the City’s total revenue. As a financially resourceful municipality, the City’s other revenue sources includes grants, reserves and user fees. In the most recent Citizen Survey, 79 per cent of residents said they receive good value for their taxes.
Typically, Council sets the taxation requirement after reviewing the Financial Plan to determine which projects to fund and which projects to defer or cancel, balancing the community’s interest in maintaining existing levels of services while planning for significant infrastructure needs. This year, significant action was required to help ensure the fiscal health of the City and its residents.
“We will continue to maintain the daily essential services for our residents while also investing in areas such as: public safety, great urban spaces, diverse transportation options, and environmental response,” said Davidson. “We also recognize that things are changing rapidly and there may be additional funding required if this crisis extends further than anticipated or goes in a new and unexpected direction.”
For 18 years, the City has received the annual Distinguished Budget Presentation Award, and most recently for the 2019 Budget. Presented by the Government Finance Officers Association, the award recognizes the City’s achievement in meeting the highest principles of governmental budgeting.
Residents will receive their property tax notices in late May. The bill also includes amounts for other taxing authorities, including the Province, the Regional District and the Library. This year, more than ever, it will be important for those who can pay their taxes by the July 2 due date to do so, which will help maintain the cash flow required for essential community services to operate without disruption. The late penalty deferral date of Sept. 1, 2020 is designed for those who really need it.
For more information about the City budget and to view the 2020 Financial Plan, visit kelowna.ca/budget.