Following a recent judicial review petition filed by a Summerland resident, the approval of long-term borrowing for two infrastructure projects has been delayed and is expected to put a higher cost on taxpayers.
The long-term borrowing for the Wharton Street Revitalization Project and the Victoria Road Project are the subjects to the review in the petition, which was filed by Brad Besler on Feb. 10, before their funding was even secured.
The two projects received public assent through the Alternative Approval Process which followed the requirements set out in the Community Charter and wrapped up on Feb. 25.
Summerland council has said the two projects are council priorities and need to continue, and delaying the work would result in an increase in the total costs.
As a result, the district's staff have proposed using internal borrowing to keep the projects going forward, which will come at an increased cost to residents.
In addition, a report to council from Graham Statt, Summerland鈥檚 chief administrative officer, said the municipality must spend money as a result of this legal action.
鈥淭axpayer funds are now being use to defend this litigation, which is believed to be without merit,鈥� he said in the report.
An item on the May 6 Summerland council agenda calls for using revised funding strategies to continue with the two projects.
An internal borrowing process has been recommended until the legal case has run its course.
Statt believes the process, with subsequent appeals, could take between eight months and one year. He added that delaying the two projects for this period would become costly.
鈥淚f we do not do the internal borrowing and have to put the work on hold, then by the time we come back to them, the costs will go up,鈥� he said.
The increases could be between $250,000 and $620,000, he said.
The Wharton Street project has a total cost of $8,557,800 while the Victoria Road project is estimated to cost $3,850,000.
The external borrowing for the Wharton Street project is for up to $3,365,080, while the Victoria Road project includes borrowing of $1,850,000 for water work and $843,470 for general work.
While restructured finances and internal borrowing do not change the total costs of either project, internal borrowing would increase how much taxpayers will pay.
For the Wharton Street project, the external borrowing was estimated to result in a 2.15 per cent tax increase, costing the average homeowner $39.39 a year. If internal borrowing is used instead, the expected tax increase would be 3.77 per cent and the cost to the average homeowner would be $69.21 a year.
For the Victoria Road work, the proposed tax increase was 0.57 per cent, at a cost of $10.09 a year. The project was also partially funded through the water utility, which expected a 1.06 per cent rate increase or $10.33 a year.
Without the external borrowing, the tax increase for the Victoria Road project would come to 1.71 per cent, with a cost of $31.30 for the average homeowner. The water rate increase would be 1.97 per cent, or $19.20 a year for an average homeowner.
The costs for the legal battle over the borrowing for the two projects is separate and was not shared.
Council is expected to make a decision on the funding changes at the May 6 council meeting.
