Developer-paid reserves dwindling at Kamloops city hall

Kamloops city hall has spent millions of reserve funds in the past two years, and developer fees aren’t refilling the accounts.

In 2023, the city had $37 million from fees paid by developers in its reserve accounts. That amount has dropped to less than $1 million, according to council committee meeting documents.

Development cost charges, used to fund all kinds of civic projects, are typically used to lessen the burden on taxpayers for major expenses. For the first time in 20 years, council opted to reduce those fees in the hopes it would encourage homebuilders two years ago.

With 2024 construction activity surpassing 2023, and this year trending in the same direction, it may have helped, but council appears to have spent more than what was coming in throughout that time.

Councillor Kelly Hall raised the dwindling reserve accounts during a council meeting last week as he proposed the city stop waiving the development fees for BC Housing.

“That fund will disappear if we don’t start charging like other communities,” he said of city hall’s affordable housing fund, which gets its money through development fees.

His two-part motion was approved by council, meaning staff will write up proposed bylaw changes that remove exemptions for supportive housing projects.

It’s not clear whether council will consider charging developers more once it updates the bylaw next year, but it’s not the only city to have blown through some of its reserve funds recently.

West Kelowna’s savings accounts for major capital or infrastructure projects started 2025 at $44 million, but now sit at just $14 million. Some councillors raised an alarm last month, calling for the city to stop spending until reserve accounts are refilled.