The City of Penticton is on track to stay on budget for 2022, despite increased inflation and other unexpected costs.
According to the second quarter financial update, being presented to council on Aug. 16, the general budget is expected to pull on less of the city’s surplus.
The city is currently on track to use $660,000 less from the general surplus thanks in part to higher revenue from city services and successful grant applications. The 2022 financial plan originally called for $1.26 million to be pulled from the reserve to balance the budget.
The largest portion of those increased revenues comes from higher than average building permits for the year so far, which have generated an extra $200,000.
The city is expecting $100,000 less in taxes for the year because of BC Assessment values, which is offset by the other revenue increases in the general budget.
Depending on how BC Assessment’s appeals go, the city could see a further potential tax reduction ranging between $323,000 to $969,000, according to the city’s report. That value hasn’t been included in their budget forecast for the year, and any shortfall would be made by increasing the pull from the surplus.
Increased fuel costs has also impacted the budget by $95,000.
The budget for the city’s planning department increased $85,000 to support 100 More Homes housing and homeless initiatives, which might be offset by potential grant funding.
While the city’s electrical budget isn’t expecting any significant changes, the city’s water fund is expecting to see a reduced transfer to the surplus due to an increased number of repairs and higher costs, with only $917,000 is expected to be transferred out of the original forecast of $1.5 million.
The extra repairs to the city’s water mains cost an estimated $350,000 due to extreme weather according to the city, while the wetter start to the year led to lower water revenue.
Another unexpected expense was repairs to CN Tugboat No. 6 at the S.S. Sicamous Heritage Park, after damage to the hull led to contaminated water. The repairs for the hull and clearing the water is expected to cost $125,000 and come from the city’s asset emergency reserve.
Of the 51 strategic priorities and initiatives, 44 are on track to be complete by the end of 2022.
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