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Osoyoos Council aims for 2% property tax hike
The proposed increase to an average single family resident in the Town of Osoyoos for 2014 is just over $30 if members of town council approve a proposed two per cent tax increase and slight increases in user fees for water and sewer services.
Town council began official budget deliberations Tuesday morning with members of council and all of the town’s directors gathered in a meeting room at the Sonora Community Centre.
In the 245-page Town of Osoyoos 2014 Operating and Five Year Capital Plan, members of senior administration recommended a two per cent increase in property taxes, which would result in an increase of $47,250 in tax based revenue, said Jim Zakall, the town’s director of financial services.
Mayor Stu Wells said while the two per cent tax increase will remain the goal over the next several weeks, he warned “many things can happen” during budget deliberations and the two per cent figure is not etched in stone.
The proposed tax increase and user fee hikes would see the cost to an average single family residence in Osoyoos that is assessed at roughly $350,000 pay $1,274, an increase of just under $30 from last year.
The Town of Osoyoos has maintained some of the lowest tax increases in the entire province over the past several years and members of the current council are quite proud of that fact, said Wells.
While he doesn’t foresee any reason to go far beyond the proposed two per cent increase, Wells said the budget process involves a lot of detail and various directors going after projects they believe will benefit the residents of this community.
It’s up to council to balance those requests with the costs and come up with a final tax increase that will not cause undue hardship for local property owners, while allowing the town to continue to improve its infrastructure and complete major capital projects, said Wells.
“I would just like to remind everyone that the two per cent hasn’t been ratified by this council,” he said. “This is what we’re here for now. We’ll be looking at all of the projects that are slated … and all of the directors will be promoting their projects and we will then decide which will go ahead and which will have to be delayed or postponed.”
Zakall said the town has adopted several framework principles in its budget process that don’t change from year to year.
They include ensuring service levels in all operations and facilities are cost effective and meeting the expectations of residents and visitors, priority projects identified by council and department directors in the five-year business plan are completed and identifying sufficient contingency funds to respond to unforeseen expenditures.
Other principles include adjusting capital expenditures to maintain current service levels, maintaining a property tax policy of increases that don’t exceed the cost of living as directed by current financial plan objectives and policy and continuing to contribute to a Police Reserve Fund to lessen the impact when the town’s population officially exceeds 5,000.
More than $100,000 will be in the Police Reserve Fund by the end of 2014 as the town expects to have to pay 70 per cent of policing costs when its official population, as defined by the national census, is released in 2016, said Wells.
Zakall said slight increases to property taxes and marginal increases to user fees have combined to keep overall increases at a reasonable level in Osoyoos over the past many years.
“Property taxes form a large proportion of revenue of the municipality,” he said. “As a revenue source, property taxation offers a number of advantages. For example, it is simple to administer and is fairly easy for residents to understand.
“It offers a stable an reliable source of revenue for services that are difficult or undesirable to fund on a user-pay basis. These include services such as general administration, fire protection, bylaw enforcement, parks maintenance, snow removal, recreation, road maintenance, sidewalks and street lighting.
Sale of service and user fees form another large portion of planned revenue and are applied to the many services than can be measured and charged on a user-pay basis, he said.
“Services where fees and charges can be easily administered include water and sewer usage, building permits, business licenses, cemetery, landfill and sales of service,” he said. “User fees attempt to apportion the value of a service to those who use the service.”
Over the next four years, the town plans to increase the proportion of revenue that is received from user fees and charges by at least two per cent over the current levels, said Zakall.
In early budget deliberations, council rejected a plan to increase tipping fees at the local landfill from $72 per tonne to $90 as recommended by staff and settled on an increase to $82, which would be a break even mark based on last year’s numbers at the landfill, said Zakall.
Coun. C.J. Rhodes argued the increase from $72 to $90 is almost 20 per cent and would cause undue hardship for many local residents.
The town will review all user fee levels to ensure they are adequately meeting both the capital and delivery costs of the services, said Zakall.
“Where possible, the town will endeavor to supplement revenues from user fees and charges, rather than taxation, to lessen the burden on its limited property tax base,” he said.
Residential property taxes generate $1,935,400 or 80 per cent of total property taxation, while business and industrial taxpayers generate $447,000 or 18.5 per cent.
Here are some other highlights in the 2014 budget:
• Garbage and recycling fees are proposed to increase by $8.50 to $127.50 in 2014. This increase is to account for the transportation consumer price index increase to the garbage and recycling contract and tipping fee increases in 2014.
• Sewer rates are proposed to increase by $3.35 to $226.48 in the town and $3.19.48 in Area A of the RDOS annually for a single -family residence. This will result in a $17,400 increase in revenues and is needed to maintain the same level of funding available for capital projects.
• Water rates are proposed to increase by $10 annually for a single-family residence to $307. This will result in a $45,000 increase in revenues and is needed to maintain the current level of funding available for capital projects.
• The water district proposes an increase by $10 annually for a single-family residence to $356. This will generate an additional $13,700 in revenues.
• Significant operating expenditures for 2014 include an increase of $6,500 to hire a civic buildings caretaker, an increase of $8,150 for data processing, an increase of $6,500 in municipal insurance costs, $4,000 to hire a labour negotiator, $18,000 to hold the 2014 municipal election, which includes the upcoming referendum on whether or not to build a new fire hall in town.
The draft budget also has full details on the priority projects detailed in the five-year capital plan.
Copies of the entire draft budget are available at town hall.