Osoyoos reconsiders nearly $11 million in budget

By Don Urquhart, Times Chronicle

Osoyoos’ elected officials effectively pruned nearly $11 million from the 2024 budget during a special open meeting held at Sonora Community Centre on Feb. 15, mostly through deferring and reallocating budget items to 2025 rather than outright cutting. 

The trimming of various items from the 2024 budget addressed some but by no means all of the issues raised by angry taxpayers over the preceding weeks since being caught off guard by the hefty hike in taxes and user fees that had been discussed for months. 

Water
Councillor Johnny Cheong kicked off the budget slimming process with a motion to divert two streams of infrastructure grant funding that were earmarked for the Main Street to bridge deck reconstruction project (2024 Operating and 5 Year Capital/Project Plan, p. 54) back into the reserves. 

This would effectively subsidize the water-related increases to tax levels.

This would be accomplished by shifting $2.5 million from the Growing Communities Fund towards the $3.2 million water metering project (p. 161) allowing for money to shift back into reserves.

He also asked for $1.4 million from the Community Works Fund to be shifted towards wells auxiliary projects (p. 150). 

All together this will enable $3.9 million to be shifted back into reserves which would then be split over four years to subsidize asset management and water fees as opposed to raising the funds through taxation. 

Director of Finance and Deputy CAO, Jim Zakall said the money earmarked for the Asset Management Plan would be reduced by approximately 35.4 per cent and the requirement would be reduced over four years for the rate increase to water.

Councillor Jim King was next up to bat taking aim at the water operating budget where $720,743 was allocated to “Borrowing on Capital Projects” (p.135).

“That’s actually interest on purchasing,” which hasn’t happened yet he noted adding he would like to see it removed from the budget. This was passed unanimously by council.

King also highlighted the Capital Contingency item at $400,000 and the Public Service Accounting Board (PSAB) 3280 item also at $400,000 (p.135).

“I think that’s a substantial amount of money to put aside in one year,” King said. He suggested lowering the amounts to $100,000 each.

 “I think we’ve got to start thinking ahead to the future but the impact on the taxpayers at $400,000 for both are quite high,” he said.

“Mayor Sue McKortoff said she was “glad it was not taken off totally because it is something that we do need to look at in the future and we keep it on the books at a much reduced rate, that makes sense to me.”

Council approved the motion to reduce both to $100,000.

King also sought more details on one other issue from the water operating budget, that being the 74th Ave. water main upsizing project (p.149) listed at $675,000. 

Acknowledging the need to increase the capacity of water mains in town, King noted the recent provincial changes that are pushing municipalities to increase the density of residential lots. 

Clarifying the matter was Director of Operational Services Jared Brounstein who said this was the last of the water main upgrades that have been done in the area to facilitate better water flow for fire fighting and domestic consumption.

No changes were made to that item. 

Councillor Myers Bennett raised the issue of standby power generation (p.150).  Noting that it’s not clear at this point what the future of Osoyoos’ water supply will be – whether it is well water or water drawn from the lake – he questioned the need for five power generators for the three wells and two booster stations.

“I would like to reduce those down to one portable generator and later down the road if we keep those water wells then we can look at how we can protect them. If we buy five maybe two years down the road we aren’t even using those wells,” he added.

A total of $1.5 million was allocated for wells 3, 4/5, and 1 along with the 340 Booster Station and Fairways Hills Booster Station.

Councillor Zach Poturica asked if any of the wells are currently set up with connections for portable generators, to which Brounstein replied that currently none of Osoyoos’ wells can accept standby power. 

“They are not electrically sound for that so we would have to upgrade the wells to allow for standby power generation,” he said. 

McKortoff then asked if the power outage on Feb. 11 which caused one reservoir to run dry and another to become critically low, Brounstein said a backup generator would have averted the problem.

Cheong then suggested that two generators be purchased which would cover the two booster stations (340 and Fairways Hills). 

King then raised the issue that even after reducing the number of generators to one or two, the electrical connection infrastructure would still need to be installed at all five well sites. Brounstein did not at that time have a cost estimate for those connections. 

He added that a portable generator would be workable but as King noted electrical upgrades would be needed at each site to accept the portable generator. 

King also asked if it’s possible to lease a portable generator. Brounstein said he is not aware of anyone offering this equipment on a lease basis but will look into it. 

“You can rent one for summer demand times but the problem is we don’t know when we’re going to have a power failure,” Brounstein added. The motion to reduce the number of generators from five to two was approved. 

Still on water, Cheong moved a motion to defer the $2 million project to develop new domestic production wells nine and ten (p.151) until the final report is in on the pilot program on well #3. 

Brounstein agreed it was likely prudent to defer for a year or two given that the town may end up going to a different water source, ie. lake water. This deferral was also approved.

The issue of wells potentially not being used in the future saw Bennett question putting money into electrical and computer (Supervisory Control And Data Acquisition – SCADA) upgrades (p.158). 

Brounstein replied that the water aspect could be deferred but the sewer upgrades were still needed as those pumps will still be required regardless of what direction the water supply goes in. 

The budget for upgrades for water is $95,704 while sewer is $158,429. The deferral of the water portion was approved.

Water Councillor Claude Moreira put forth a motion asking town administration to look into the separation of the domestic water system from the agricultural irrigation supply from an accounting perspective so that the two systems operate as separate systems funded by their users. 

Osoyoos CAO Rod Risling noted it can be done but it will take administration “several months” to come back to complete it and it will only impact the 2025 budget. The motion was passed.

Responding to a request for a clarification on how the two water systems are funded, Zakall explained that the Water District system is the water supply outside of town boundaries which the town took over in 1995 as mandated by the province. 

There is a portion of that system that is domestic supply and a portion that is irrigation. Interior Health has required the town to provide potable water to all of the residents on those systems. The town has been working on the water twinning project to get domestic supply to those on the system. 

Zakall noted that the cost increases are being supported by user fees for all water district and town water users. Separating out the domestic and irrigation water would see each funded separately as compared to now where the two entities are treated as one. 

Moreira further made a motion to grant a 10 per cent discount to the approximately 70 homeowners who have not been reached as yet by the twinning project and hence do not have domestic water supply. Council approved this motion.

Sewer
Similar to his budget alterations for water King requested the Borrowing on Capital Projects at $209,248 removed (p.105). “Again those projects haven’t really started and yet we’re charging interest so I think it would be prudent … we don’t even know if those projects are going forward in this year so I would like to see the money come off this budget.” 

This motion was carried along with a motion to reduce the Capital Contingency and PSAB3280 down to $100,000 each similar to the water category.

General
Moving to the General Operating Budget Councillor Zack Poturica identified the Public Service Accountability Board (PSAB) 3280 item at $250,000 which he wished to see reduced to $100,000. This motion was carried.

Cheong next suggested that an $80,000 executive assistant position that is currently unfilled be shifted to subsidizing the communications staff position cost to taxpayers. That motion failed to gain enough votes and was defeated.

King next focused on the Transportation, Recreation & Buildings projected at $159,781 (p.17). “I don’t think we’ve finalized the assessment and would like to defer to 2025.” Because some of these are occurring this year it was suggested that it be lowered but not removed. As such it was reduced to $100,000 and passed.

The Lake Health and Buoy Capacity Assessment Project (p.51) at $40,000 came under the microscope with Bennett suggesting that because there is so much information that is needed to be gathered around the issue of buoys and foreshore issues it’s better to hold off.

Risling noted that the issue with this is that the town has foreshore leases and the province has been pushing municipalities to address the inconsistencies with these leases. “Our leases come due this April or May and the intent with this project was to show the province that we’re moving forward in trying to address some of the issues in the hopes they won’t pull our leases for non-compliance.

“So this was put in as somewhat of ‘bargaining chip’ with the province to let us work through our issues until we put a plan in place to deal with the issue long term. Again we don’t know if the province will see this as a step in addressing the issues,” he added.

Council agreed to remove this item from the budget.

King moved that the Cemetery Consultant Review (p.48) at $75,000 be moved to next year. Poturica asked, that given the popularity in recent years of being buried in the cemetery when was the last time a review of the fees had been carried out. 

It’s been approximately seven years since a review was carried out replied Zakall, “however, we had built the CPI increase into it, but it is on our workload to do again.”

Council agreed to defer this item to next year’s budget.

Harbour Key Drive  Road and Erosion Improvements (p.55) at $1.8 million were suggested to be removed by King. He noted that work is needed and flooding had taken place a couple of years ago but there is no certainty as to whether it will flood again or not. 

“I know people there are happy there, they live on the lake and I guess people who buy there should be aware that their property can flood,” he added.

According to Brounstein, “Harbour Key is one of those roads that has deteriorated to the point of no return. The reason this road was put on the list was because it was identified as a high risk during a 2014 road assessment.” 

He also noted that if erosion started to occur along the east side of the road it could damage the water and sewer under the road.  

King asked if possible to charge people who live on that street part of the cost. This is usually done 

Zakall noted that by deferring the project it keeps it on the books in terms of applying for gran funding. Council voted to defer the project until 2025. 

Next up was the Material Storage Upgrades at the Operational Services Yard (p.77) identified by McKortoff which carried a $200,000 price tag. After a brief discussion around the potential efficiency gains of having the storage co-located with pubic works it was decided to defer this project until next year. 

Cheong then raised the transportation asset management and master plan (pg. 58) which focuses on roads, sidewalks and other related infrastructure which has a projected cost of $200,000. The assessment may be necessary for grant funding but this could not be confirmed with all certainty by Brounstein. 

“I do know that roads and sidewalks are looked at all the time by our Operational Services Department,” added McKortoff with council voting to remove this item from the budget. 

Bennett then took a swing at the $100,000 earmarked for the resurfacing of the pickleball courts (p.67) which had been requested by the Desert Pickleball Club for a total project cost of $250,000. A total of $120,000 was approved by council in 2023 and the club had committed to raising $30,000 in 2024. 

Bennett expressed his desire to see it deferred until next year and also noted that the park assessment has not yet been completed, which may impact the future location of the courts.

McKortoff highlighted that the club should be given credit for undertaking its own fundraising for the project. This was deferred until next year.

On the issue of fleet replacement (pg. 63) King raised the issue of possibly purchasing one light truck this year and a second next year. The current trucks are 20 years old. The total budget for both is $160,000. Council agreed to defer one (not specified which truck was being deferred) until next year.

The staff housing item ($75,000 in 2024) raised by Cheong was deferred until next year to enable the town to look at more cost effective solutions for staff housing.  Further discussion around the property ensued after King inquired whether the property could be put to other uses such as building rental units through perhaps a private-public partnership.

Zakall noted that the property is “Crown-granted to the town,” and as such cannot be sold and if the town determines it will no longer use the property, it will revert back to the province as Crown Land.

King also asked if rental units were built could they be rented out to anybody, not just town staff. 

“This was one of the things we asked the province if we could actually rebuild on that site, added Risling. “They indicated yes but more for staff housing.” 

He notes that when they were planning around this property one of the possibilities discussed was to rent it out to other agencies such as Interior Health or school board for instance. “That’s likely the angle that the province would allow, there’s still a lot of steps and negotiations that are required before we get to that stage,” Risling added. 

The budget item was deferred until 2025 and a new motion was approved to task town administration to enquire with the province how the town can best use the property. 

Cheong raised the issue of retroactive RCMP pay (pg. 44) which municipalities across the country are required to pay back to the federal government after a wage settlement. 

The tax requisition was to be increased by $19.38 to pay for that component over the next two years. Zakall noted there is funding in the town’s RCMP reserves by which it can be paid rather than through a tax increase. The retroactive amount for 2024 is $78,804 and the adjustment was passed by council.

King sought to defer a $150,000 project to increase the operational services office space (pg. 75) which includes training, storage, changing and lunch room space for instance for the current headcount of 21 staff that was built in the 1980s for a much smaller staff number. King’s motion failed to receive a seconding and failed.

King also failed to gain a seconder for his motion to defer the Full Time Equivalent for a communications person. There was discussion around the alternatives which include the possibility of sharing resources with other municipal governments such as the RDOS. Risling noted there have been some preliminary discussions around that issue.

On a final note Zakall clarified the tax items that Osoyoos has no control over. These include Library, Regional District, Hospital, School, BC Assessment Authority, Municipal Finance Authority, Sterile Insect Release and 911. These rates are received by end March to early May. 

McKortoff concluded the meeting by saying the items voted on at the meeting will be used to rework the budget for consideration at the next council meeting.