First agenda item on January 23 Council agenda is 2023 budget with a property tax increase of 4.95%. Given the overall economic picture, particularly the interest rate increases and inflation on food and fuel I know that there will be disappointment. My initial response was relief that it was not more. Having spent time reviewing it I can support this budget but I do so recognizing that we may need to do catch up next year as the implications of Bill 23 are still not determined.
Before talking specifics I would like to provide some context.
- In June 2022 Finance did alert Council that there were serious budget pressures: inflation, dramatic increase in insurance rates, fuel prices and the impact of the very low increases recently i.e. average annual tax increases of 1.11% over the last five years. The latter has been achieved by the classic “tightening the belt” which every organization goes through; but decisions to not fill positions cannot continue forever.
- Bill 23 has caused many municipalities to identify serious budget concerns being created if they are to meet their goals of building and providing sustainable and healthy communities. Accordingly I was somewhat surprised to see a recommended tax increase <5% and the very little commentary about Bill 23. Having talked to Finance I do agree with their recommendation to not speculate about the impact until there is good data about impact on King. I anticipate that well in advance of developing the 2024 budget we will have that data.
On page 20 of the budget binder there is summary of the program change requests for 10 new positions. I will admit to being shocked. But when I reviewed the arguments for creating them I could see the need. The need for increase in Planning Staff is clear as before Bill 23 it was very evident that staffing was inadequate. New timelines for development applications and the dramatic changes to the Ontario Heritage Act necessitate more headcount; and in this area I think we are possibly not increasing enough.
Capital budget for 2023 is $32.5 million. Its important to remember that the source of the funds includes funding grants from upper tier governments, development charges and our own reserve funds; often but not in 2023 there may be funds from the operating budget. Also recall that funds identified are those to expensed in 2023; for many projects the capital will be spent across multiple years. In 2023 there are no new projects.
Of particular interest to Ward 5 are the following:
the Township Wide Recreation Centre for $86 million spread across 2018-2024;
the road & related infrastructure improvements include Keele St from Lloydtown Aurora Road to Kettleby;
gravel road conversions includes 18th SDRD west from Jane to end;
Kettleby Road reconstruction for $1.8 million $300,000 in 2023 and the remainder spread out over following two years although work will largely be done in 2024.
If you are wondering what the assumptions are for inflation (water, elctricity, gas and more) see page 25 in the budget binder. Another important input is the magnitude of development charges (DCs)forecasted. On page 40 you can see the projections for such and also you can see the number of new units triggering the DC’s. I do not recall seeing the latter data being provided in previous budgets. A question I have is the degree of certainty on these projections given Bill 23.
Given the uncertainty we are living with these days I am glad that King is well within our debt limit. In 2023 our current debt is 6.9% and declines the following years; our own recommended debt policy limit is 10% which is well below the provincial limit of 25%.
I am disappointed that our 2023 business and budget plan does not really really reflect our declaration of a climate emergency in July 2019. Every department summary should include mitigation and adaptation actions.
As always you are invited to register to make a deputation at Council; and/or you send in your comments for circulation to Council members. For both of these actions please contact clerks@king.ca by noon on Monday, Jan. 23. And I am most interested to hear from you directly.
Budget is the first agenda item; and at the outset there will be presentation.
There will be a presentation at the very beginning.
Hi Debbie,
If I remember correctly, last year staff requested a larger budget increase than the 1.1% that Council finally accepted.
What is preventing Council from again asking staff to find efficiencies and, for example, to make do with less than 10 new full-time staff and one part-time positions? Also, I know this is not an election year, but what is preventing Council from using more of the Tax Stabilization reserve funds? A Tax Stabilization reserve fund that is more than 30% of the Operating Budget seems excessive. Finally, can you tell me what the Mill Rate (Tax Rate) will be for 2023? I can’t seem to find any reference to it in the 2023 Budget Book.
It’s easy to blame budget increases on inflation. However, inflating our municipal budget is not part of the solution. In fact, it will only make national inflation worse. I know that I’m trying to find efficiencies in our family budget, and putting off expenditures whenever possible until costs come down. I would hope that our municipal staff and council would do likewise.
Thank you.
Neva Lorenzon
Hello Neva, you have asked some good questions which I will try to respond.
1. First, my memory of the evolution of the 2022 budget is somewhat different that yours and is in line with what shows on this blog. Staff came to Council with budget proposal of +.16% and Council added some initiatives which we felt were appropriate (e.g. more bylaw support for the the long weekends.) The initial Staff proposal was in response to Council giving direction to be as close to zero as possible. That direction was very much driven by the stresses of COVID. And that followed direction for 2021 to be very low given the stresses of first year of COVID. I only provide this historical perspective as it demonstrates that there has been very specific effort to minimize cost increases due to headcount increases but filling needed jobs with quality persons cannot be avoided forever.
2. Staff have found efficiencies of $405,773. See budget presentation page 7.
3. I can’t comment on your perspective about the tax stabilization reserve being excessive. I assume that you believe it should be used to reduce the increase in 2023. I will pass your comment to Finance Director. Having said that I hope our choices to that would be more than strategic that the election calendar.
4. I will get mill rate for you.
5. At some point in the Monday meeting the Mayor gave very clear direction to Staff that no new vehicles should be purchased until absolutely necessary. I believe his motivation being that i) cost and availability of low carbon options will improve and we want to minimize our asset base of old technology; and ii) avoid buying unless necessary.
Hello Neva, I would like to add to my earlier response. 1) The tax rate (mill rate) will not be finalized until we have the Region and School board. The final tax rate is calculated with the final tax billing in May 2023. 2)
you questioned the magnitude of the tax stabilization reserve. The latter is $4.1 million in December 2022 which would be 12% of draft 2023 operating budget ($33.5 million).