Wednesday, December 22, 2010

Lake Country and the Goldilocks Dilemma

I write a personal blog on a regular basis (if you are interested you can read me at In my very first blog, I wrote about what psychologists call "The Goldilocks Dilemma". You know the story about the family of bears that goes out for a stroll before dinner and the little rude girl called Goldilocks. She enters their house unbeknownst to them and makes a mess out of it. The girl's dilemma, in the story and while she explores her new environment, is to find what is comfortable or suitable to her. The chair is too big or too small, the soup is too cold or too hot, the bed is too hard or too soft. Goldilocks always finds the middle ground and chooses one of the three chairs, or one of the three soups, or one of the three beds that are suitable to her level of comfort. Dr. Steven Berglar, author of the book "Reclaiming the Fire", which explores the Goldilocks Dilemma in professionals, tells us that, "as time goes on, professionals usually become creative and self-directed. Ultimately, though, everyone of them reaches a point where the need for eustress (positive stress or healthy stress) and the predilection to feel in control and protected from the embarrassment or shame of failure achieve a perfect balance." At this point, according to our good doctor, the Goldilocks dilemma ensues, which is: endure an already mastered task whose challenges are too cold (under stimulating and likely to precipitate frustration and ennui), take on challenges that are too hot and threaten to disrupt self-esteem, or find a mechanism that will free them from remaining between two undesirable alternatives.

Lake Country, as a community, like all other communities in Canada and many others in the World, is facing this very same quandary. The dilemma is with respect to what to do with our aging infrastructure. The reality is that we own circa $250 million of infrastructure, which includes roads, water and sewer systems, parks and facilities. We know that in the next 20 to 30 years, we will need to spend $120 million to keep this infrastructure from deteriorating to a point of no use. Where is the money coming from?

The District and all other municipalities are left with the problem and the following limitations:

  • Limited access to revenues. Basically, the only source of revenue is the property tax, which is applied on the assessed value of a property. The District has no control over the assessment, which is done by the Province through BC Assessment.
  • Limited value for taxes collected. Only $8 out of $100 of taxes collected go to municipalities. The rest go to federal and provincial governments.
  • Limited tax base. There has been very little growth in the last two years, so we are not gaining much new growth value.
  • Requests from the residents to keep the same level of services provided (if not better or more). This is becoming more and more costly. Just in 2011, it will cost the District $460,000 more due to inflation increase and contractual obligations. For instance the RCMP contract will cost $135,000 more next year.
  • No industrial tax base. We have no industry (or very limited) and so the overwhelming majority of our taxes comes from residential properties. This is not good as population ages and financial resources decrease.

In order to keep our infrastructure from reaching an unacceptable level of deterioration, we need to spend $4.2 million every year. Again, where does the money come from? As the answer is obvious, the dilemma becomes quite complicated. Council heard about this on December 14th and asked staff to work on a budget that would meet at least three requirements:

  • Maintain the current level of service provided to the community and residents. Councillor told staff that they heard from the taxpayers that they do not want any reduction in services. We cannot go backward but forward.
  • Replenish the current reserves, which have been depleted in the last two years.
  • Address the issue of aging infrastructure, as I explained it before.

We are working on solving the dilemma. Any options must be sensitive to the impact of any increases to individuals and families. However, the community owns its assets and needs to understand that they should be kept to a reasonable level of enjoyment not only for the time being but also for future generations. And people in the community need to be prepared.

Monday, December 20, 2010

Lake Country Budget Meetings

On Tuesday December 14th at the Special Council meeting, Council began their budget deliberations with a presentation from the CAO outlining the alignment to the Council Strategic Priorities and the Corporate Business Plan to the District finances and account allocations.

Staff presented some policy recommendations and will provide a draft budget and 5-year financial plan to Council at the beginning of 2011 for a second budget meeting to be held on January 25th.

In a nutshell, Staff requested Council if they agreed on three main objectives: maintaining the current level of service provided to the community and residents; replenish the current reserves, which have been depleted in the last few years; and address the issue of aging infrastructure that the District, like all other municipalities in Canada, is facing. Council agreed that these three objectives are a financial priority and gave Staff the green light to prepare a budget based on them.

In order to maintain the current level of service provided to its residents, Council needs to deal with a number of increases from other agencies, contractual obligations, and inflation, which in itself is 2.4% alone. For instance, RCMP costs will increase about $135,000. The total increases can be covered with a 4% increase in taxes. Staff will work on options for Council to consider. The effect of a 1% increase for each 100,000 of property value is $2.75 (two dollars and seventy five cents). The average property is assessed at $502,000, so a 1% increase would be a total of $13.80. “To put it in perspective, that would be the cost of a Chai Latte and a packet of cigarettes” said Alberto De Feo, District Administrator, to Council, “a tax increase of 4% would result in the average taxpayer paying around $55, which is the equivalent of a nice dinner. This is very good value for what we get back from the municipality and it’s an annual cost.” In the last five years, Council approved tax increases ranging from as low as 3.2% to as high as 4.9% or an average of 4%.

To replenish the reserves, Staff have recommended that the portion of property taxes that goes into reserve accounts be increased from 4.5% to 5%. This is not a tax increase but a transfer of money from what is collected to those reserves.

Finally, the total value of Lake Country infrastructure is about $250 million. Half of it needs to be replaced in the next 20 to 30 years as it is aging and deteriorating. This is prevalent in all Canada and all municipalities have been or are going to raise money, specifically to address this issue. It is called infrastructure deficit, in the sense that money is needed to be set aside for future repairs or rebuild. In the case of Lake Country, in order to adequately address this issue, the District needs to spend an average of $4.2 million in capital projects on roads, water, sewer and other infrastructure annually. In 2010, only $500,000 from property taxes, parcel tax, and direct fees were spent for this purpose. Staff are recommending that a long term solution be sought to achieve the appropriate level of funding. “We have a responsibility to create a long-term strategy” Councillor Geoff Greenwell said during the meeting.

“Staff have outlined our options in a very informative manner” Mayor James Baker said, “we need to look at the future and we need to expand our tax base to make our budget and quality of life sustainable in Lake Country and what we heard is the right way of doing it.”

De Feo closed his presentation by telling Council that options will be provided with the intent to look at a fair distribution of the burden. “Although, we do not have control over the assessment of property values, we are sensitive to the impact of any increases to individuals and families” De Feo said, “However, the community owns this infrastructure and it understands the need to keep it to a reasonable level of enjoyment and use, not just for the time being but also for future generations.

Again, Council will review a detailed budget and 5-year financial plan at its January 25th Special Meeting.

Click here to view the full report to Council that outlines the current financial situation (revenues & expenses), comparison revenues (expenditures), allocation of property tax and user fees and an analysis of the 2010 budget.

For more information contact: Mayor James Baker, Phone: 250-766-6670 email

Thursday, December 9, 2010

Council Meeting Highlights from December 7th

A Selfless Act

Mayor Baker presented Mr. Steve Swetlishoft with the Governor General's Certificate of Commendation Award for his selfless actions in rescuing a man who had fallen through the ice last winter. Click here to view the full news release.

Tis the Season!

Skate with Santa on Sunday, December 12 from 3 to 4:30 pm at the Winfield Arena! Admission is free! The Salvation Army Christmas bus will be at the Municipal Hall parking lot from 5 to 7 pm on Tuesday, December 14th, and the Municipal Hall will be closed on Friday December 24th and will re-open on Monday January 3, 2011.

The Prison Issue

Rich Coleman, BC’s Solicitor General announced today that they are once again looking for a new home for a prison in the Okanagan. Consultations are underway with the Okanagan Nation Alliance and the Solicitor General is asking local governments for their feedback by April 2011. Click here to view the Castanet news item for more details.

The District wants to hear your thoughts and opinions on this issue! In the previous discussions regarding locating the prison on Jim Bailey Road, no supporting comments were received for that proposed location. We will keep our website up to date with as much information as possible for you. Email, call 250.766.6670 or drop your written comments off at the Municipal Hall. Please make sure to let us know if you would like a response. We will make sure that all comments are forwarded to the Solicitor General.

Historical Markers Unveiled

The first of four Historical Markers, that were a combined effort by the District, the Lake Country Museum and a whole bunch of volunteers, will be located in each of Lake Country’s wards: Carr’s Landing, Okanagan Centre, Oyama and Winfield. Each of the markers recognizes a unique heritage site and includes a view of one of the nearby lakes as seen from that ward. Each marker links each of the heritage sites, includes a map of the District and information about the municipality’s beginnings and formation under a ward constituency system. Click here for the full news release!

Regional Growth Strategy

The Regional Growth Strategy is a planning tool that will be used to guide growth and create an action plan in order to reach the region’s vision over the next 20 years. The RGS is not a land use document but is a common vision of values for the region. The RDCO wants to raise the level awareness of the RGS and will be conducting early and on-going consultation to determine the future regional vision. They will have information available on their website and in their newsletters. Click here to view the presentation from the RDCO to Council.

Early and On-going Consultation

The Development Services Department presented several items for Council’s consideration under Section 879 of the LGA. This section requires that Council consider the need for early and ongoing consultation with residents of the community, organizations and authorities such as adjoining municipalities, the local school district, and senior government affected by OCP bylaws.

Council agreed with staff’s assessment that the consultation undertaken to date has been appropriate for 2 of the 3 OCP applications. Those are, The Lakes to fix minor discrepancies between the surveyed plans and concept plans, and Compass Developments (Oceola Road) to change the future land designation of 2500m2 of land from Urban Residential to Mixed Use Commercial. These bylaws will now be forwarded to a public hearing.

The third OCP amendment which creates a new growth area applies to the Juniper Cove neighbourhood requires additional public review and will be presented to the community at an open house at the Carr’s Landing Fire hall. After the open house staff will prepare the bylaw for Council’s consideration. Keep checking our website for details on the open house!

Youth Councillors

Earlier this year, Council asked staff to investigate the idea of having a Youth Councillor attend Council meetings and help add another perspective to Council’s discussions. This has gone over well in other communities and will help to increase the youth involvement in the District. The principal of GESS recommended that 2 grade 12 students participate alternately so that they can balance their Council commitment with their academic commitments. The Director of Corporate Services will help the new Youth Councillors with background information and answer any questions they have. Keep an eye out at the first meeting in January for our new Youth Councillors!

Apex Drive Park Concept Plan

The Lakes Neighbourhood Association and the District have been working together to develop a 1 acre parcel of land on Apex Drive into a neighbourhood park. After various meetings with committees and residents and open houses, all the input, comments and ideas were consolidated and the concept plan was approved by Council. The park will be developed in 4 phases over a number of years and includes a large flat grass area, 2 playgrounds and a small amphitheatre gathering area. Click here to see the concept plan!

Gas Tax Agreement

Council is supporting the RDCO’s request to the UBCM to move from Tier 2 to Tier 1 under the Gas Tax Agreement. What does this mean? The Gas Tax Fund provides federal funding for B.C. local governments for a variety of capital and planning projects. As a Tier 2 regional district, 50% of the funds are given directly to the member municipalities within the region and 50% is set aside for regional projects through an application process. By moving to Tier 1, this would mean that local municipalities would directly receive 75% of the funds and only 25% would go towards regional priorities. For the District, this would mean an approximate increase of $150,000 in annual funding from the Gas Tax Agreement.

Friday, December 3, 2010

Taxes and Local Governments

The Canadian Federation of Independent Business (CFIB) has just released a report on municipal tax trends with respect to business taxpayers in British Columbia stating that local governments operating expenses are too high in proportion to two factors: population and inflation growth. Business organizations have been lobbying the provincial government for some time to pressure local governments to reduce fiscal 'burden' on business and to introduce legislation, in fact, to do exactly that.

The Union of BC Municipalities has responded that the cost of local government is increasing but for good reasons. All local governments are dealing with an infrastructure deficit. Communities have deferred capital improvements for years in order to keep tax increases down, but can no longer afford to do so. Municipalities are also faced with increasing standards for things like water treatment, wastewater treatment and climate action. The majority of British Columbians agree with these higher standards – we want clean, healthy, sustainable communities, but better standards come at a higher cost. In addition, local governments have faced increasing pressure to take on new responsibilities in areas such as affordable housing or homelessness. Expansion of service also comes at a cost, in fact new costs.

From my perspective, CFIB is missing the point altogether. I am a pro-business individual. I believe that business, especially small business, has the innovative force to create progress, change and a better quality of life. However, CFIB has the wrong target. First of all, local government is the only government legislated to balance its budget. We cannot run a deficit and if, for some reason, it happens that municipalities cannot balance their books, there are dire consequences. The business community needs to ask why the federal and provincial governments are allowed to run a deficit. This creates a vicious cycle whereas more money is needed to cover the deficit and more taxes are raised to do so. For every 100$ collected in taxes by the three levels of government, $92 go to the federal and provincial governments and only $8 to local governments. And will get worse. Is it too much to ask for better accountability at the higher levels of government?

Your local government would love to fix your roads, give you the best water systems in the world, and be green in all things, but how can it do that if the money is getting less and less? Let's do the math again: federal and provincial governments are taking more money from the taxpayers and yet downloading more responsibilities to local governments, and they do that by legislation. In addition, they can run a deficit. A triple dip at the expense of the taxpayer (there is only one in my books) and to the immediate services you need.

The District of Lake Country has an infrastructure deficit of about $120 million. If we do not do anything about it, our infrastructure will deteriorate more and more. It is already happening and it will become unsustainable in less than 20 years. The taxpayer needs to understand this and make some choices. The taxpayer also needs to ask the hard questions to the other levels of government, not just their local government.

Local governments are open, transparent and accountable. Many of our employees are taxpayers in their own right as well. They are hard workers. Our budget is discussed and adopted in public meetings. But most important, we are regulated in all we do.

I agree that the tax burden has become difficult but all need to work together for a better system. To only blame local government is not constructive and could have serious consequences for the future of our communities and upcoming generations.