Kingston city councillors will hear some good news and bad news when they gather virtually next week to open the 2021 budget talks.
Despite plunging municipal revenues and other financial pressures caused by the ongoing COVID-19 lockdown, city staff managed to bring in a balanced budget of more than $393.8 million, which represents a spending increase of $3.3 million over last year.
Then, the bad news.
Taxpayers can expect to dig a little deeper to fund municipal programs and services.
If city council approves the budget recommendation from staff, property taxes will rise by about 2.4 per cent this year, which represents an extra $88 on an average tax bill of $3,778.
The 2.4 per cent increase is in line with council’s pre-determined tax target for 2021.
The proposed tax hike includes 1.4 per cent to cover extra operating costs and inflation, plus another one per cent infrastructure tax that will be earmarked for road repairs, new municipal vehicles, equipment purchases and other capital expenses.
The proposed increase could go even higher based on a previous council decision to add a separate line on tax bills starting in 2021 to reflect the city’s annual share to co-fund Frontenac County’s Fairmount seniors home and Frontenac land ambulance.
“Beginning in 2021, the City’s share of these services will be funded as a separate component on the City’s property tax billing, based on an annual requisition received from the County,” according to the budget report from Desiree Kennedy, chief financial officer and city treasurer.
The city’s share for county-run services is about $11 million a year, which is now removed from the operating budget and installed as a separate tax line that will remind homeowners of the extra cost every year if there is extra funding needed for the nursing home and ambulance service.
City hall’s yearly budget talks, usually held in the late fall but delayed to January because of the pandemic’s uncertainty, are scheduled to unfold over three nights on Jan. 26, 27 and 28 with final approval of the operating, capital and utilities budgets set for Feb. 16.
The weighty document makes several references to the pandemic’s financial toll on city coffers during the past year and projections of a financial impact that could stretch on for years.
The city says it has lost millions of dollars in revenues from transit, parking, recreation and other services during the pandemic, listing examples:
- Transit revenues have been budgeted at 45 per cent of normal levels, a reduction of $4 million, while ridership levels will take about three years to return to pre-pandemic levels.
- Recreation and cultural revenues have been budgeted at 51 per cent of normal levels, a reduction of $5.7 million over 2020, due to the closure or scaled-back operation of municipal rinks, Leon’s Centre, Grand Theatre and recreational programs.
- Parking revenue budgets are down by $383,000 over 2020 budgeted amounts due to reduced demand for parking permits as a result of employees working from home and limited shopping and event capacity.
- Airport revenues are decreasing 48 per cent, or $873,000 over 2020 budget estimates, because of travel restrictions and reduced flights.
Despite the ongoing drop in revenues, the city had some good news to end 2020 — more COVID-19 relief funding from the province, which ultimately helped Kingston bring in a balanced budget of matching expenses and revenues.
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The province’s Safe Restart Funding program in 2020 delivered $7.2 million in pandemic-related funding to assist with Kingston’s operating costs in the first phase, $5.4 million in the second phase, plus another $1.4 million so far this year.
Kennedy says the money will be “used to help offset reduced revenues anticipated as a result of the pandemic.”
The 2021 operating budget is also leaner in wages and benefits for civic workers, down about $945,000 from last year as the city expects pandemic-related staff reductions, delayed hirings and reduced overtime to continue impacting departments like transit, recreation and cultural services.
Non-union salaries and council’s own pay rates will also remain frozen in 2021.
Amid recent public calls to defund Kingston police as part of the Black Lives Matter movement — highlighted in recent public consultation on the budget — the police services board is seeking a 3.6 per cent increase in spending, boosting the crime-fighting budget to a record $41.1 million in 2021.
Council has asked the police chief to deliver a briefing on Jan. 19 “to provide further information on how the police budget is constructed to deal with the concerns raised by BIPOC and Black Lives Matter and how those elements are related to other priorities included in the 2021 police budget.”
On the capital spending side, the 2021 budget includes $62 million in new spending for a variety of projects and purchases, including regular road repairs and affordable housing initiatives, plus other one-time expenses such as transit fare box replacement, turtle fencing on Highway 2 near Westbrook, solar panels on the Kingston East community centre and repairing the limestone steps and walkways around city hall.
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