City of Kamloops' surplus fund now at $15 million

That money is not earmarked for anything specific and is utilized as a rainy-day fund. The city surplus comes amid deficit spending announced by the provincial and federal governments. Cities are not allowed to plan to run a deficit, but instead build up reserve funds for future use.

This year’s property tax mill rates will be set this week and notices will be delivered around the Victoria Day long weekend, with taxes due in July.

This year, there will be no delayed timeline to pay property taxes, but the city has sought to keep property tax increases low. City of Kamloops corporate services director Kathy Humphrey said the city continues to be concerned about the ability of residents to pay taxes during the COVID-19 pandemic.

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“Last year, we were really nervous and people came through and we were able to do what we were supposed to do,” she said. “But with lots of people having a really difficult past year and the pandemic still here, we are hopeful people will still be able to pay their taxes, but trying to be conservative to make sure that we can weather, if people are late paying.”

The city has passed a $175.5-million budget, funded by $118.8 million in property taxes, $30 million in user fees (utilities, building permits, recreational services, fines, parking and more), $22.5 million in grants and grants in lieu and $3.5 in investment revenues. In 2020, the city collected $116 million in property taxes.

The city’s property tax increase this year is the lowest since 2006, according to Humphrey, at just shy of one per cent — 0.93 per cent.

Humphrey said council approved cost-cutting measures, such as reducing temperatures in city facilities, and offset lost revenues during the pandemic using COVID-19 Safe Restart funding. Meanwhile, the city added two parks staff, due to increased parks usage during the pandemic, and cost of living increases were felt across the board.

The city’s 2020 financial statement will be presented to city council on Tuesday, May 4, by its auditor, BDO Canada. It shows a general operating surplus in 2020 of $1.4 million. Humphrey said the surplus is small, considering assumptions and estimates made by the finance department during the pandemic. She said it is similar to previous years.

The money filters into the city’s general surplus fund, which now totals $15 million. That money is not earmarked for anything specific and is utilized as a rainy-day fund. The city surplus comes amid deficit spending announced by the provincial and federal governments. Cities are not allowed to plan to run a deficit, but instead build up reserve funds for future use. Humphrey said the city’s reserves are “healthy.”

“I think that we were very strategic last year in terms of spending from our reserves, but also setting aside money still into our reserves for asset management and for capital maintenance and all of those sorts of things,” Humphrey said.

She noted the significance of going a year without realizing any gambling revenue. The city usually receives $3 million per year in revenues from the two casinos in Kamloops, but Cascades and Chances remain closed due to the pandemic.

“So, that is a big hit for the nice-to-have activities because that’s generally where we would fund those activities,” Humphrey said. “We will have to, going forward, sort of think about where we fund some of those projects.”

On Tuesday, council will vote to adopt property tax mill rates, following a recent committee of the whole meeting and first three readings of the tax rates bylaw. Changes do not usually occur between the first three readings of the bylaw and adoption.

This year’s mill rates per $1,000 of assessed property value are:

• $66.60 for major industry;

• $40 for utilities;

• $18.95 for light industry;

• $16.50 for managed forest;

• $14.03 for farm.

• $14.02 for recreational/non-profit organization;

• $13.59 for business/other;

• $5.16 for supportive housing;

• $4.64 for residential;

Broken down, residential ratepayers will pay the bulk of the tab, at $76.5 million. Businesses will pay $31.5 million, major industry will pay $5.2 million, utilities will pay $3.3 million, light industry will pay $2.1 million, recreational properties and non-profits will pay $208,000 and farms will pay $78,000.

This year, the business class category used for offices, retail, warehousing, hotels and motels, reportedly saw negative market growth of -2.35 per cent. Humphrey said it may have resulted from vacancies amid the pandemic, as the value of such properties is based on rentability. The city has seen a slight uptick in the number of business licences issued despite the pandemic, but about a third of all such licences are now for home-based operations.

For your information:

Property notices include not only city property taxes, but also hospital taxes, regional district taxes and school taxes. Last year, the province gave a break to commercial properties on school taxes as part of support for businesses. The tax will be reinstated this year. In order to calculate the city portion of your property taxes, take the assessed value of your home, divide it by 1,000 and multiply it by your respective mill rate. For example, a house assessed at $500,000 would pay $2,320 in city property taxes (before the homeowner grant is claimed).

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