Penticton looking at 6 per cent tax increase as budget deliberations begin

Penticton property owners are looking at a 6.26 per cent property tax increase — or about $12 a month — for the average home as 2026 budget deliberations officially kicked off Tuesday morning at City Hall.

Angela Campbell, general manager of corporate services, gave an overview of the 2026–2029 draft plan to begin the annual budget deliberations for 2026.

Each department head provided a detailed analysis of their respective department budgets on Tuesday and Wednesday.

Council was given a draft budget on Oct. 21 with the stated goal of a 6.26 per cent property tax increase for 2026, and that remains the goal now that budget deliberations have begun, said Campbell.

The City of Penticton was recognized for its 2025 financial plan and budget document by the provincial financial officers’ association, she noted.

“It recognizes the city’s commitment to providing detailed, transparent budget information to our citizens,” she said.

Consolidated revenues have increased by five per cent over the 2025 adopted budget, with a projected total of $163.3 million, said Campbell.

Expenses have increased 4.7 per cent over 2025, with a projected cost of $149.9 million, she said.

“These figures are net of the taxes collected on behalf of other governments and the difference between revenues and expenses go into reserves, which funds our capital programs and other operational requirements,” she said.

The city’s general fund has increased by five per cent over 2025 to $82 million, up by $3.6 million.

Total expenses amount to $88.5 million, including amortization — an increase of $6.4 million or a 7.8 per cent rise.

After each draft budget is completed for each department, it is reviewed by a member of the financial department team.

“We go through a detailed process looking for other opportunities to decrease impacts with alternatives to taxation,” said Campbell.

The gap between revenues and expenditures was 11 per cent, including inflation, at the start of the budget process.

A thorough review of over 2,000 line items for both revenue and expenses, with a five-year history for trend analysis, took place, she said.

This resulted in savings of over $600,000 and a reduction of 1.2 per cent in property taxes, she said.

The senior management team also reviewed all full-time jobs and cost savings in every department, resulting in another reduction of 1.5 per cent in taxes.

After all this work, the final tally of a 6.26 per cent property tax increase was reached, said Campbell.

The process of reviewing each line item over the past two years has resulted in savings of $3 million, which equates to 6.6 per cent of taxation and 3.4 per cent of the general operating budget for 2026, she said.

Two new RCMP officers being hired are part of the proposed 2026 budget, as is the hiring of four full-time firefighters originally approved in the 2023 budget, said Campbell.

Inflationary impacts on the 2026 budget were originally 4.9 per cent, but after a detailed review, staff were able to reduce that to 2.6 per cent.

Penticton is very competitive with other communities across the Okanagan Valley when it comes to property taxation and utility rate fees and charges, said Campbell.

There are over 5,000 residential properties in Penticton valued at $500,000 or less. A home in this range will see an increase of $9 per month, or $108 in property taxes in 2026.

A home valued at $1 million or higher — of which there are 3,000 — will see an increase of $19 per month, or $228 for the year.

The average assessed value of a Penticton business is $1.43 million, and they would see an increase of $47 per month.

The average of all residential properties would see a property tax increase of $39 per month.

One-quarter of local businesses have an assessed value of $500,000 or less, and they will face an increase in taxes of $16 per month or $196 per year.

A $33 per month increase would be applied to the owner of a business assessed at around $800,000.

There are 300 properties assessed at over $1.4 million, which accounts for over one-third of property taxes collected in Penticton, said Campbell.

Protective services — RCMP and bylaw — make up 38 per cent of the overall general fund spending, said Campbell.

Utility rate increases were adopted in September. Rate increases included eight per cent for electricity, 10.3 per cent for sanitary sewer, 9.4 per cent for water and 30 per cent for stormwater.

“Based on the increases approved through the fees and charges, the average residential property would see an increase of $324 per year or $27 per month for utilities,” said Campbell. “For a business property, the average increase in 2026 is estimated $1,860 a year, or $155 per month.”

Many municipalities across the province are faced with dramatic tax increases, with several of them looking at increases ranging from 10 to 26 per cent, she said.

“Managing these financial challenges has resulted in a shortfall of just under $3.1 million in the 2026 general operating fund,” she said. “This shortall is comprised of $1.3 million for inflation, with the remainder consisting of $1.8 million for investment into community safety and community vibrancy and culture.”

Staff looked at ways of reducing the impact on the general funding shortfall, including funding one-time projects through reserve transfers, she said.

There were just over 125 job postings in 2025, including full-time firefighters, a procurement specialist, lifeguards, supervisors for the water and wastewater treatment plants, and a fleet supervisor.

At the beginning of 2025, the city employed 360 full-time employees, with seven new hires proposed as part of the 2026 budget process, said Campbell.

The city’s various reserve funds have significant balances, but many of them have restricted uses, leaving only a “small portion” that is eligible to be drawn from, she said.

The 2026 draft capital plan has in excess of $30 million in reserves, on top of a significant 2025 plan that includes over $60 million of carry-forward projects, she said.

“We’re just under $100 million of approved capital projects underway or scheduled,” she said.

The city owns more than $1.4 billion in assets; these reserves represent less than 10 per cent of asset values, with a large portion being used to fund capital projects, she said.

A total of $20.6 million in capital reserves of more than $130 million in total reserves is available for general use as of the end of 2024, said Campbell.

A complete review of utility rates was undertaken in 2023 and proposed annual rate increases between 2024 and 2027.

One of the main recommendations from that review was that annual rate increases should support the city’s asset management investment plan.

The capital budget has once again been separated from the operating budget, and capital budget discussions between senior staff and council won’t begin until all operational budget discussions have taken place, she said.

Council can reconsider any budget area throughout deliberations until official adoption of the financial plan takes place next spring, said Campbell.

All budget information from each city department and division was finalized by early September, with reviews by senior staff completed before the end of that month.

Numerous public engagement opportunities were provided to allow local residents to voice concerns, priorities and input on the budget, said Campbell.

There are 38 strategic initiatives included in plans for 2026, several of which are continuing over multiple years and a few carried over from 2025.

Initiatives to support the city’s priority of having a safe and resilient community include support for the Fairview encampment response, advancement of building a new fire hall and upgraded satellite station, extension of the memorandum of agreement with 100 More Homes Penticton, technology advancements for the bylaw enforcement department, and continued work with the province on the Heart and Hearth program to bring a maximum of 50 tiny homes to the city’s industrial park, said Campbell.

Other priorities include advancing design work on a proposed twin-pad arena complex, finalizing upgrades for the city’s lakeshore and esplanade area downtown, developing the downtown area plan, and creating a master trail plan.

Chief administrative officer Anthony Haddad commented that this is the final budget of the current council, with the next municipal election in British Columbia scheduled for next October.

“While it’s sometimes hard to see the results of the work that comes out of each of the budget processes, looking back at the legacy of a council term may not be seen for many years,” he said. “We’re three years in and the community has seen many changes around the council table. Be proud of the focus that you’ve all shown, because without that focus, not much can be accomplished.”

What makes Penticton the envy of many other communities in British Columbia is that this is a community “that certainly steps up to the challenges and a community that attracts new residents, talent, businesses and economic opportunity.

“While it’s not always easy, and I know you know that, it’s the continued push and investment in all areas across our community that will have continued access into the future.”

Council remains forward-looking as it has invested in housing, with more than 900 residential units currently under construction across all housing types, he said.

“Council has invested in affordable housing through the use of city-owned land, but we certainly need more as well,” he said.

Upgrades to the city’s skateboard park (new lighting), growth of Frost Fest, upgrades in alternative transportation infrastructure, a new splash park, new dog parks, continued beach accessibility, more pickleball courts and parkland investment are just some of the priorities council has committed to since the last municipal election three years ago, said Haddad.

— This story was originally published by the Penticton Herald