Council breaks down the numbers

City’s outstanding debt stood at $43M at end of 2016, with total reserves at $53M

Some eye-popping numbers, ranging from lawyers’ fees to renegotiate deals with Trio Marine Group to the $43 million in debt owned by the city, were up for discussion as Penticton city council worked through its second full day of budget deliberation on Wednesday.

Legal costs

Drawing up four revised agreements with Trio Marine Group cost taxpayers $34,500 in legal fees alone, according to corporate officer Dana Schmidt.

The agreements were renegotiated primarily to eliminate the possibility of a waterslides development in Skaha Lake Park. Staff time devoted to the matter was not tracked

All told, the city spent $448,000 on legal fees in 2016, down from $619,000 in 2015. Finance manager Jim Bauer said those figures were inflated by higher-than-expected costs from insurance claims and settlements. Legal fees for 2017 are budgeted to ring in at $307,000.

Communications department

Maintaining an improved dialogue with citizens is expected to double the communications budget in 2017.

Staff has proposed a $406,000 total cost for communications this year, up from $203,000 in 2016.

The increase is driven largely by the cost of a full-time engagement officer on a term position through October, which will bump up the cost for salaries and benefits from $88,000 to $169,000.

Business development officer Stephanie Chambers argued the new focus on engagement with the public has paid off.

She said the number of visits to the city’s website increased by 5,300 from 2015 to 2016, while social media impressions increased 121 per cent. Meanwhile, the Shape Your City website has received 6,800 hits since it launched mid-2016.

Information technology

Shoring up the city’s ailing information-technology systems, which includes everything from cellphones and servers to computers and cameras, is going to cost an extra $500,000

The IT operating budget is expected to rise to $2 million in 2017 as staff begins tackling a variety of improvements recommended by a consultant last year to improve reliability and security. That would include hiring a business analyst on a three-year contract to helping bring those upgrades to life.

As it stands today, staff “is spending the majority of its time keeping the lights on . . . but has little or no capacity for transformational projects,” said IT manager Dave Polvere.

Another $1.2 million has been set aside for capital expenditures, nearly half of which is meant to add more data to, and improve, the geographic information system.

Debt

Outstanding debt totalled $43 million at the end of 2016.

Staff was unable to immediately provide comparison data from past years to show how debt level has changed over time or how it compares to like-sized municipalities.

Payments on the city’s debt last year totalled $8.4 million, $3.9 million of which covered interest, while the remainder was applied to the principals of the various debt sources.

Council also heard the debt attached to building the South Okanagan Events Centre will be retired in 2018.

Once it’s gone, it would free up enough cash to borrow a fresh $13.5 million over 10 years, or $24.5 million over 20 years, for a new project without increasing taxes.

Anything over that amount would require a four per cent tax increase for each $1 million borrowed.

Reserves

Total reserves at the end of 2016 stood at $53 million, but only about $4.4 million of that is unreserved and available to bring into the operating budget to offset a tax increase.

Council was also asked to bump up its contribution to the arts reserve to $50,000 in 2017, which would help fund a proposed deal with Valley First.

That agreement would see the city pay the bank $18,000 to acquire about 40 square metres of sidewalk outside its downtown headquarters. The city would then use that $18,000, plus a matching amount of its own, to install a sculpture there for public enjoyment.

“As long as the art isn’t Frank, the Banker, we’ll be OK,” quipped Mayor Andrew Jakubeit, referencing the 2005 controversy surrounding the Frank, the Baggage Handler nude statue.