Bug-control scheme about to face cash-flow problems
A long-established bug control scheme that protects Okanagan orchards could soon experience a cash flow problem.
Directors of the Sterile Insect Release program, which targets the codling moth insect, say they need to borrow money for the first time in the organization's history.
Unless approval to do so is given, “a cash flow analysis predicts a likely shortfall through June and July 2020,” according to a report to be reviewed this Thursday by Central Okanagan regional district directors.
Unlike local governments, the SIR board cannot borrow money to fund its operations. Instead, it relies on taxes collected on its behalf by regional districts in the Okanagan.
The SIR taxes, which are levied on both farmers and city residents, have not been increased since 2010.
While tax revenues are still sufficient to cover the program’s costs, the problem is a mismatch between the timing of most expenses and the receipt of taxes.
Many SIR expenses, particularly seasonal labour costs, are highest from May through August, but tax revenues aren't generally passed along from the regional districts until August.
That could be even more of a problem this year as many local governments are expecting significantly lower tax collections, at least through the summer, because of the financial distress caused by COVID-19.
As well, the SIR has been steadily drawing down its reserves to set aside money for the decommissioning of a device that irradiates insects, making them sterile before they are released from an Osoyoos facility.
The reserve fund has declined from $3.5 million in 2016 to $2 million earlier this year, setting the stage for a money problem.
“Having started the 2020 fiscal with only $2M in the general fund, a cash flow analysis predicts a likely shortfall through June and July 2020 until (tax) requisitions are received,” reads part of a report from Shirley Fowler, an Armstrong councillor and chair of the SIR board.
Before the SIR can borrow funds to make sure it doesn't run out of money this summer, approval must be given by the Central Okanagan, North Okanagan, Okanagan Similkameen and Columbia-Shuswap regional districts.
Established in the early 1990s, SIR is hailed as a pesticide-free program that has virtually eradicated the codling moth, which previously caused extensive damage in Okanagan orchards.
Sterile moths are released from the Osoyoos rearing facility. They mate with wild moths, but no offspring is produced, and over time this has reduced infestation rates by 90 to 95 per cent.
Moth damage at time of harvest is now said to amount to less than two-tenths of one per cent of all the fruit produced by 90 per cent of Okanagan orchards.