Budget season arrives in London Monday afternoon.
London city council passed the 2017 budget with relative ease but 2018 could be a different story.
The projected tax increase for 2018 sits at 2.9 per cent but that doesn’t include Ontario’s decision to raise the minimum wage to $14 an hour in 2018.
City hall officials say raising the minimum wage will have an impact on the bottom line, with additional costs estimated to be in excess of $1 million in 2018 and at least another $1 million when the minimum wage rises to $15 an hour in 2019.
City officials budgeted for modest increases to the minimum wage but the proposed increase for 2018 and 2019 goes beyond their budget forecasts.
Ward 7 Coun. Josh Morgan anticipates a hard time trying to find savings.
“We’ve already put directions for our staff to find savings in our multi-year budget. I moved a motion at the start of the budget to have staff work through the budget while finding savings,” he said.
City staff were able to find $500,000 of permanent savings in 2016, $1 million in 2017 and were directed to find another $1 million for 2018, all before the added pressure of an increase in the minimum wage.
The city of London switched to a multi-year budget in 2016 following the election of the current council in the 2014 municipal election. The multi-year budget will carry London through 2019. Despite budgeting for a four-year period, city councillors must still approve the budget for each fiscal year, allowing for changes to be made.
An increase in the minimum wage isn’t the only budget pressure facing city politicians.
Earlier this year they were told there were significant issues with the state of London’s social housing.
The London and Middlesex Housing Corporation said it would cost $223 million over the next five years to maintain their current properties. The LMHC currently has 3,200 units at 31 properties across London and Middlesex County with 2,800 people on the waiting list.
The organization is the largest provider of rent-geared-to-income housing in the area.
Despite the budget pressures, Morgan says it’s still possible city council could meet its target of a 2.9 per cent tax hike for 2018. He suggests council could look at delaying some of their strategic objectives.
“There’s nothing to stop us from going back and reviewing some of the ones that haven’t started yet and changing the implementation of those. Whether we push it back into the next multi-year budget, whether we decide not to do them because we talked about it years ago,” he said.
The budget process won’t get any easier in 2019.
The four-year contract for London police agreed to in 2015 includes a “market value adjustment” on Dec. 1, 2018. That means the salaries for first-class constables in London will rise to match the average of the 11 largest police services in Ontario.
It’s possible salaries for first-class constables won’t rise, but that would depend on those 11 municipalities agreeing to deals that weren’t richer than London’s.
Comments