Infrastructure planning
Balancing investment in infrastructure for today and the future
Infrastructure is critical to the quality of life for citizens that live, work and play in our city. We invest an average of $70 million annually toward infrastructure to support services like clean drinking water, transportation, parks, utilities, civic, recreation and protective services buildings. Keeping citizens safe and healthy and providing opportunities for economic development is necessary to the sustainability of the community.
The 2030 Infrastructure Plan is the City’s strategic capital plan and sets the direction for infrastructure investment from now to 2030. The 2030 Infrastructure Plan is used to guide the development of the 10-year Capital Plan, which is updated annually to remain accurate and reflect emerging issues along with the community’s changing priorities. In turn, the 10-year Capital Plan is used to support infrastructure investment decisions in the annual budget presented to Council for endorsement each year in December.
2030 Infrastructure Plan 10-year Capital Plan
Council endorses the 10-year Capital Plan annually, which forecasts the City’s infrastructure needs for the next ten years. Kelowna's population is expected to grow by approximately 20,000 over this timeframe and this plan details the infrastructure necessary to accommodate growth, improve services and renew existing infrastructure assets.
Staff continue to explore a variety of proactive ways to fund an infrastructure deficit identified in the 10-Year Capital Plan. The Infrastructure Levy was adopted by Council in 2019 and is one of the ways we can take action and be resourceful in investing in our future so that Kelowna continues to be a great place to live. Read the news release to learn more about Council’s approval of the 2019 final tax increase.
Council endorses the 10-Year Capital Plan annually, which forecasts a total infrastructure investment in excess of billion dollars required to renew existing infrastructure and to put in place the necessary infrastructure to accommodate growth and meet our community’s evolving service expectations. The City has more infrastructure needs than funding can support, and the unfunded portion of the capital plan is termed the "Infrastructure Deficit," which is forecasted at $388 million for the next 10 years.
Similar to an aging house, which needs to be maintained with a roof replacement or new appliances, City infrastructure needs to be renewed to ensure service delivery.
As we evaluate our existing assets and future needs to sustain growth, we know that the most responsible thing to do is to address it today. In recent years, the City has improved our data collection, including making improvements to our asset management program, which keeps us better informed about infrastructure needs.
We need to be responsible and resourceful in investing to renew important community assets such as the recreational facilities, roads, bridges and sewer and water infrastructure, to name a few examples. It’s more cost-effective and efficient to proactively renew infrastructure prior to asset failure to avoid service disruption and costly repairs (i.e. a stitch in time saves nine).
Council approved 2.27 infrastructure levy for 2019 and 2020, ongoing, meaning that the average home owner in Kelowna with a property valued at $684,450 will pay $45.19 for the infrastructure levy portion of their property tax bill in 2019.
Funding opportunities being looked at include, but are not limited to: Development Cost Charges, Drainage Utility, federal and provincial grants, user fees and public/private partnerships. Staff will continue to explore new ways of funding the deficit to maintain, renew and expand roads, parks, recreational facilities and other city infrastructure.
To accommodate continued growth in Kelowna, construction of new services or expansion of existing services will be required. The City’s 20-year Servicing Plan and financing strategy supports the infrastructure needs called for in the Official Community Plan. Although the 20-Year Servicing Plan is a standalone document, all of the infrastructure needs are included in the 10-Year Capital Plan.
The financial strategy acknowledges that:
- The cost of new infrastructure to accommodate growth should primarily be the responsibility of developers
- A portion of new infrastructure is also of benefit to existing residents and some cost should be shared
A municipality’s ability to finance new infrastructure is limited to powers granted by the Local Government Act. The Provincial Government, through legislation, has empowered municipalities with the right to impose Development Cost Charges for major services such as arterial and collector roads, water systems, sanitary sewer systems, drainage systems, parkland acquisition and development.
With an anticipated population increase of 45,000 new residents by 2040, a revised series of DCCs is being proposed to ensure appropriate funding is in place for the required capital projects and future infrastructure needed to adequately service the needs of the community. The last DCC update was in 2019 and since then several changes have occurred. Read the DCC Update 2022 fact sheet to learn more.
A combination of finance mechanisms support the objectives outlined in the Official Community Plan and complement the funding paid by new development:
- Pay-as-you-go (taxation and utility user rates)
- Reserve funds - funds put away in prior years for specific future purposes (parking, equipment replacement, landfill improvements)
- Short-term borrowing
- Long-term borrowing authorized by an alternative approval process or a community referendum
- Developer construct agreements - recovery from benefiting property owners
- Formation of Specified Areas - direct user pay (i.e. those benefiting from a sewer upgrade in their area)
- Grants or cost-sharing programs provided by senior levels of government
- Public/private partnerships
Although major services such as arterial roads, water and waste-water systems and park development form the framework within which the city ultimately develops, other infrastructure needs are required to satisfy operational, recreational, cultural and safety demands within a growing community. These infrastructure needs are funded outside of the Development Cost Charge Program and include:
- Ongoing operations, maintenance and renewal of all infrastructure
- Major new equipment such as snow removal equipment
- Recreational buildings
- Community theatres and art galleries
- New fire halls and new or expanded police facilities
DCC’s do not cover the ongoing operation, maintenance or renewal of infrastructure, which can account for 70 to 80 per cent of the life cycle cost of municipal assets.
