City staff pitch 2.8 per cent tax hike for London, Ont. 2022 budget update

Tuesday marked the first unveiling of the latest draft annual update to London's multi-year budget with a final approval from city council scheduled for Dec. 21. Global News

City councillors in London, Ont., have received their first look at the latest proposed annual update to the city’s multi-year budget, which is set to bring the smallest increase to property taxes so far this budget cycle.

London operates on a four-year budget cycle with its current financial plan covering costs and spending between 2020 and 2023.

A draft version of the latest update, which proposes a set of budget amendments for 2022, was unveiled before the strategic priorities and policy committee on Tuesday.

The update lists 12 amendments to London’s property tax-supported budget. If all are approved, London home owners would see their property tax jump to 2.8 per cent next year.

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The increase is down from the 3.9-per cent hike that city staff had projected for 2022 following the approval of 2021’s annual update.

2020 and 2021 saw tax hikes of 4.4 per cent and 3.4 per cent, respectively.

2023 is on track to levy a property tax increase of 3.9 per cent, assuming 2022’s 12 budget amendments are approved.

“While (the 2023) increase is certainly high, I think we’ve been successful in reducing the previously anticipated tax levy increases over the past two annual budget updates,” said Kyle Murray, London’s director of financial planning and business support, during city staff’s presentation of its annual budget update on Tuesday.

A summary of past increases and potential future increases to property tax rates in London, Ont. via City of London

The biggest savings stem from more than $3.7 million found in budgeting reviews of different departments within the city. On top of the savings this will bring for 2022, city staff say these reviews have unveiled permanent budget reductions that will last beyond the current multi-year budget cycle.

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Another chunk of change was found in a reduction to required investments to child care and the Ontario Works program, both of which are the result of the COVID-19 pandemic.

The pandemic delayed the development of anticipated child care centres, while other government supports that aim to offset the impacts of COVID-19 have to led to a decreased caseload for Ontario Works, according to city staff. These changes have resulted in more than $2.7 million in savings for 2022.

City staff are also recommending bumping the penalty for illegally parking on private property from $45 to $60, which would bring a permanent budget reduction of $100,000 each year. However, they noted on Tuesday that this recommendation is intended to deter repetitive trespassing for parking purposes, rather than find savings.

Not all amendments result in budget savings. A necessary budget increase for the Middlesex-London Health Unit will see the City of London pay $640,000, with another $122,000 coming from the County of Middlesex.

City staff say this increase is “made up largely of inflationary and incremental premises cost pressures.”

Two amendments are listed as “for consideration,” meaning they’re not recommended by city staff, but rather presented as options that could create more savings.

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One includes a 50 per cent funding cut to the Neighbourhood Decision Making program, a 50 per cent reduction to the Neighbourhood Small Events Fund and a $100,000 cut to London’s Athletic Travel Grants program. This would result in a $235,000 permanent budget reduction.

The other would reduce grass-cutting in some parts of city parks, while reducing funding for London’s proactive tree trimming budget, resulting in $258,000 in permanent savings.

Four of the amendments are tied to London’s capital budget, however they have no impact on property tax.

Tuesday’s meeting did not allow for debate between city councillors, but the group of politicians were given a chance to ask questions.

The first came from Ward 12 Coun. and budget chair Elizabeth Peloza who asked if Ontario’s recently announced raise of its minimum wage to $15 in 2022 would have any impact.

City treasurer Anna Lisa Barbon said an analysis of its impact is currently underway, but is expected to range between $300,000 to $500,000.

“We believe for 2022, should that proceed, that we should be alright to manage it through the process,” Barbon said.

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“We will bring forward a business case to support whatever the magnitude of the financial impact will be as part of the 2023 annual update.”

The update also garnered praise from Deputy Mayor Josh Morgan, and in particular the savings found within budget reviews of the city’s departments.

“Freeing up our staff’s time through a multi-year budget process allows them to do the deep dive service reviews that shows the results that you see in these budget amendments,” Morgan said.

“I think the multi-year budget process and the process we’re going through is incredibly valuable.”

There are three more key dates when it comes to the multi-year budget’s 2022 update.

On Nov. 29, council will open the floor to the public and Londoners can register to speak at that meeting on the city’s website.

On Dec. 2, the strategic priorities and policy committee will meet again to review the budget, with the option of meeting once more on Dec. 3 if necessary.

City council is expected to grant final approval for the annual budget update on Dec. 21.

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