Draft 2026 Budget and Financial Plan

Lake Country inherited many gravel roads at the time of incorporation from the Regional District. Most of these roads are rural in nature or provide access to crown lands beyond District boundaries. The District currently has no plans to pave the existing gravel roads until further development occurs. Costs for future paving of these roads would be borne by the developers as it occurs.  

While the tax roll expanding does help offset some of the tax increase, it is not nearly enough to fully offset the extra costs we’re facing. For example, this year’s 6.25% increase is after deducting 1.50% that we’re expecting to get from growth. It is a common question why our tax increase is above CPI. CPI is a measure of a consumer basket of goods cost increases, the District purchases things like asphalt, concrete, pipes, manhole covers, fire trucks, chlorine rather than the milk, eggs, clothing, shelter etc. that goes into consumer CPI. When looking at those costs they’ve increased significantly more over the past several years. While BC CPI increased by 20.7% from 2019 to 2025, chlorine increased 178.9%, manhole equipment increased 48.4%, asphalt 80%, insurance 82%, fire trucks 126%, and our RCMP budget 182%.

While population growth slightly correlates with staff growth, the number of staff is more closely tied to the levels of service set by council. FTEs (note includes employees funded by water & sewer fees, not just taxation)

2026 – 118.35 $12,249,000

2025 – 112.60 $11,947,000

2024 – 106.90 $10,901,000

2023 – 100.90 $10,019,000

2022 – 94.70 $8,790,000

Regarding the mill rate, I believe you might be referring to our presentation on December 2 which at one point explained how the common misconception that the market value of properties in the District provides the District more tax revenue. To demonstrate that we do not in fact get more tax revenue from property tax values going up we showed that the mill rate has actually dropped slightly over the last 12 years. For example if the average property is worth $600,000 one year and then the following year the average property increases by 10% to $660,000, if your property also increased by 10%, your taxes related to your assessed value going up would not be impacted at all. Your taxes are adjusted only by the increase required to increase the property tax revenue required to balance the municipal budget.

To explain this further, in a hypothetical town with only 2 houses, both worth $500,000, needs $10,000 in revenue to cover the town expenses, the mill rate would be 10.00 so $10 per $1,000 of assessed value. Each property would pay $5,000.

The next year both houses doubled to $1,000,000 in value. Say the town still only needed $10,000 to cover town expenses, the mill rate now drops to 5.00 so $5 per $1,000 of assessed value, each property still pays $5,000 even though their assessed value doubled because their value went up by the average increase. The mill rate was halved but their tax bill is the same because the properties are now worth more. Now say they both doubled to $1,000,000 but now the town needs a 10% tax increase to $11,000 to cover town expenses, the mill rate now goes to 5.5 or $5.50 per $1,000 of assessed value. Now both properties pay $5,500 in tax. So the mill rate dropped from 10 to 5.5, the property assessments doubled and their taxes increased by 10%.  Comparing this to the District, over those 12 years because property values went up along the way we adjust the mill rate down to reflect the property tax assessments increasing, but at the same time the mill rate slightly rises to reflect the increase in taxes needed to fund the municipality. Whether the net of these two results in a mill rate increase or decrease depends on the average assessment values and the property tax revenue needed to balance the budget.

While not your property specifically, in an analysis last year we determined that yes municipal taxes doubled over the 12 year period from 2013 to 2025.  In addition the massive rise in the cost of things like asphalt, chlorine, fire trucks etc. mentioned above, the following table shows during that time not only did the District face massive cost increases therefore tax increases were needed just to maintain the same level of service, certain service areas have been boosted.

In the area of roads specifically, if the contributions to the Road Reserve & Capital Works Reserve had only risen by 36% inflation from 2013 – 2025, there would be approx. $1.2 million less available annually over the next 5 years. The District would only be able to deliver on approximately half the road projects identified in the long term plan if this wasn’t adjusted.

We understand that the rising cost of just about everything is impacting everyone in the community in a big way, unfortunately not only do we face the same challenges, but as has been demonstrated our costs are rising even faster than inflation. While raising taxes more than usual is not ideal, the alternative of cutting services has not been the desire of the majority of the community that has been engaged in the past several budgets. We continue to look to ways to be more efficient, cut costs where possible, and focus on diversifying our tax base through promoting development in the commercial/business and light industrial spaces.

Note: this question was submitted through another channel and is being posted by the Communications team.

Thank you for your comments, the budget is still in the draft phase and has multiple opportunities for revisions based on Council’s direction and community input. We as staff and Council who has received your email and this response appreciate your feedback.

We can assure you that we do not take it lightly that property tax increases greatly impact members of the community, particularly when many are struggling and already stretching their dollars further than the past. The unfortunate situation we are in is that the majority of the tax increase is not from increasing services where Council can simply opt to put off the improvement or not go ahead with it all together. The majority is related to appropriately funding the existing levels of service and the necessary reserve contributions to pay for long term infrastructure plans including replacement of existing, aging infrastructure. Put another way, the only way to significantly eliminate the tax increase would be to reduce levels of service. For the past few years, when engaging with the community with the prospect of either taking on larger than normal tax increases or scaling back levels of service, the general consensus has been that while no one wants the higher taxes, they value the services enough to not reduce them. 

While we are limited in the revenue streams available to us as a municipality to help offset the burden on taxpayers, we are doing our best and actively pursuing ways to help. For example, approximately 94% of the assessed value of the District is in the residential class, 4% in business and 0.5% in light industry, meaning that when cost increases happen, it’s residential properties that have to take on most of the burden. In comparison, the City of Kelowna is made up of 82% residential, 16% business and 1.5% light industry meaning they have a larger business & light industry tax base to share the load. This is why diversifying the District’s tax base has been a priority of Council. The District is looking to expand our business and light industry tax base with the largest project in this area being the Lake Country Business Park. In 2025 the District also added a specialized grant coordinator to help the District go after and be successful in more grant applications to lessen the reliance on taxation and this strategy is already paying dividends.

Thank you again for your feedback, we encourage you to either watch or attend the December 2 budget meeting where the budget will be presented and Council will have their first chance at providing feedback. There will be opportunities to attend at open house events in January & February to provide additional feedback as well.

Note: this question was submitted through another channel and is being posted by the Communications team.

Economic Development and diversifying the tax base is a key strategic priority for Council and the District including the areas you’ve mentioned. While it is up to the specific property owners to actually develop and the District cannot force development, the District tries to incentivize using some of the limited tools at its disposal. The District has a Main Street Revitalization Bylaw which includes significant tax exemptions for any development in a specified area near main street. The District has also recently put an enhanced focus on trying to attract business and development through a specified economic development function after recently updating an economic development strategy: economic-development-and-tourism-strategy.

With over 210km per road and a relatively small tax base to support it (one of the highest ratio of km of road per capita in the province especially among communities our size) it is always a fine balance between providing and maintaining roads to an acceptable standard and keeping property taxes at a reasonable level. Improving road infrastructure has been a major priority of council and there has been significant investment in this area particularly lately. In 2013 the transfer into our road reserve was only $100,000 with an additional $400,000 of annual resurfacing budget in addition to $450,000 to our capital works reserve (approx. half of which is designated for roads). If contributions to the Road Reserve & Capital Works Reserve had only risen by inflation from 2013-2025 the road program would have approx. $1.2 million less available annually for roads projects. Only approximately half of the road projects identified in the capital plan in the upcoming 10 years would be achievable if these adjustments had not been made. This does however come with a price tag and has been one of the major drivers of tax increases. Raises for council are based on a Council Remuneration Policy which is reviewed by an independent committee of community members for what is determined to be fair and is adjusted based on BC CPI each year.

Please keep in mind that the budget is in draft form and is currently only proposed to Council, ultimately Council will decide what they want to include which includes incorporating feedback from community members such as yourself. While a significant portion of the tax increase is to keep most established services at the same level of service and deal with continually rising costs, there are service improvements in the budget if approved. Examples include:

• $190,000 additional annual funding towards infrastructure
  1. From 2013-2025 if the District had only increased the road program by inflation, the road program would have approx. $1.2 million less available annually for roads projects. This is one example of how tax increases are enhancing our long term infrastructure plans
• $87,000 towards expanding transit Route 32 mid-day service, adding 1,300 of scheduling annually between 10am – 1pm and continuous service between 6am – 8pm weekdays.
• $86,000 towards additional bylaw support to allow for enhance focus on District and Council bylaw priority areas
• $19.8 million of budgeted capital/infrastructure projects
  1. Includes leveraging developer contributions and grant funding to supplement our projects
  2. Largest projects include:
     • Installation, replacement an upsizing watermains in parts of Okanagan Centre improving reliability and meeting modern fire suppression standards
     • Enhancements to facility at 9718 Bottom Wood Lake Road to accommodate interim recreational and community programming
     • Woodsdale Recreation Park including ball fields, vehicle parking, off-leash dog area, community gardens, washroom and equipment storage, landscaping and shade trees.
     • Oyama isthmus boat launch & swim area improvements.

Please note that the budget package is for the 2026 financial plan, the 2025 costs you’re referring to have much more detailed information located in the 2025 plan located here.The 5 jobs you’re referring to from that year added $245,000 in costs as there was other funding used for the remainder, for example re-allocating budgets for legal contracted services to the wages for in-house, grant funding & capital funding for grant specialist etc. Detailed descriptions on the value of these positions and why they were put forward and approved are included in the 2025 plan in the link provided.

As with the entire budget, while CPI and inflation are considered, an automatic or blanket increase is not applied to every budget line. Grants in particular are reviewed at specific times and adjusted if approved by Council as necessary. For example, while there isn’t an automatic increase, the museum grant went from $47,500 in 2022 to $57,500 in 2023 and the art gallery grant went from $65,000 in 2022 to $75,000 in 2023 and then to $90,000 in 2024 which far outpaces inflation in those years.

The District of Lake Country continues to work with the Ministry of Water, Land and Resource Stewardship (WLRS) regarding the applications submitted. Unfortunately, there has been no estimated timeline provided by the Ministry on when approvals would be forthcoming. When this is better understood, the appropriate funding amount and source will be reviewed based on the approvals provided.

The District has taken steps to enhance protective services to improve community safety while minimizing the impact on taxpayers in any given year. The most significant enhancement for emergency response was the addition of two new career staff positions in the 2024 Budget and subsequent restructuring of the fire department. These additional positions and restructuring expanded career staffing from 8 am to 4:30 pm Monday through Friday up to 6 am to 6 pm seven days a week. The proposal to add one additional position in 2026 will ensure that each of the two shifts of career staff are allocated: one deputy fire chief and three fire and rescue technicians. These shifts of career staff work as a team with the fire department’s paid-on-call firefighters to respond to emergencies across the community. 

The 2024 fire department restructuring established an organizational framework that can to grow towards 24-hour per day career staffing. At the same time the District has continued to invest in the recruitment and training of its paid-on-call firefighter program to ensure that the fire department has an effective composite firefighting force. 

Other investments in protective services include:

• Construction of a new Fire Station 71 which was officially opened in 2022
• Adoption of a new 25-year fire fleet and equipment plan in 2022
• Renewal of the RDCO Fire Department Mutual-Aid Agreement which included Automatic-Aid Enhancements between the City of Kelowna and the District of Lake Country in 2023
• Negotiation and Signing of a new Fire Department Mutual-Aid Agreement between the City of Vernon and the District of Lake Country in 2025