Draft 2026 Budget and Financial Plan

Streetlight LED conversion has been delayed by supplier and contractor issues. Work has begun and the project should be wrapped up by the middle of 2026

1. The $130M figure applies only to twinning the existing system. The estimated cost to supply all customers with Okanagan Lake water and construct a water treatment plant is approximately $180M (in 2025 dollars). If water treatment were triggered as a regulatory or operational requirement, it would likely occur in the 15–20+ year timeframe; however, this remains an assumption.
2. The current estimate to add Okanagan Lake water supply to the Eldorado site is approximately $28M (in 2025 dollars). This is also assumed to be required in the 15–20+ year range and would be undertaken when necessary.
3. We understand the challenges with Beaver Lake water quality as a source; however, based on growth projections, neither Okanagan Lake nor Beaver Lake alone has sufficient year-round capacity to meet future demand. As a result, Beaver Lake water remains necessary. Once a treatment plant is in place, and when to your average person finds treated Beaver Lake water indistinguishable from Okanagan Lake water at the tap, it would likely be most cost effective to operate the treatment plant year-round and supplement seasonally with Okanagan Lake water. This approach is more economical than relying primarily on pumped Okanagan Lake water.

That item has been reviewed many times over the years by multiple engineering firms, always returning with the same recommendation to build the Eldorado Water Treatment Plant. 

Twinning the system and relying on Okanagan Lake as the potable water source carries a significantly higher capital cost than constructing a water treatment plant (in excess of $130 million), in addition to causing substantial community disruption. From a lifecycle cost perspective, it takes approximately 75 years before the combined construction and operating costs of a water treatment plant become less financially favorable.

But with that said, once filtration is required for Okanagan Lake, which is considered an eventual requirement, twinning the system using Okanagan Lake water becomes the most expensive option to implement.

The Eldorado Water Treatment Plant will initially treat Beaver Lake water, with a planned future capability to also treat Okanagan Lake water.

Please note that our 2026-2030 Draft Financial Plan is the most recent budget which has had 1^st reading and will be going for 2^nd & 3^rd reading in February 2026 and adopted in March 2026. You can find the document here: Home | OpenBook. You’ll see that the Eldorado Water Treatment Plan is now listed for 2028. It is dependent on receiving a significant government grant of likely $25m - $40m to be feasible. It is being planned for but typically shows as year 2-3 of our 5 year financial plan and continually gets pushed back a year up until we’re able to get a grant at some point in order to be able to proceed. A significant portion will also be funded through development cost charges given that a portion of it is related to growth & development.

Thank you for the comments. The current culture budget (not including theatre or facilities costs on behalf of some cultural buildings) is $461,000 including grants to the art gallery, museum, and the Public Art Advisory Commission. Funding levels are set by Council and as such your comments have been passed on to them.

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.