Kingston city councillors will begin their 2022 budget deliberations this week with a familiar refrain — a proposed property tax increase.
City staff say the proposed $408.9 million budget for 2022 includes a tax hike of 2.4 per cent, which continues an annual pattern established by council during its term.
The city’s largest ever tax-and-spend budget will be reviewed by council while it listens to departmental presentations over three nights on Nov. 23, 24 and 25.
The annual operating budget also sets a course for post-pandemic recovery.
“The 2022 budget reflects a full or gradual return to pre-pandemic service levels for those services significantly impacted by the pandemic,” explains Chief Administrator Lanie Hurdle.
However, Hurdle cautioned it could take until 2024 for all municipal services, including much-needed revenues from recreation and public transit, to fully return to pre-pandemic levels.
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The recommended 2.4 per cent municipal tax increase represents 1.4 per cent to cover inflationary costs, plus another one per cent toward a nest egg for capital infrastructure.
“Based on an average market assessment value, the 2022 budget impact to a homeowner is $86 over 2021,” says Hurdle’s budget report to council.
But the council-directed tax hike is only one measure affecting property owners. Council has already approved a special 0.6 percent tax increase to help raise $25 million for the expansion of Kingston General Hospital. There’s also a special levy flowing to Frontenac County to support shared land ambulance and Fairmount nursing home costs, which appears as a separate item on the tax bill.
The $408.9 million budget reflects the overall cost of providing municipal services and programs next year — a spending increase of $13.4 million or 3.4 per cent over this year.
The overall spending envelope is based on $140 million from non-tax revenues such as user fees, and $17 million as payments in lieu of taxes for government properties such as prisons and the military base. The remaining $251 million is raised from local taxation.
Not all of the budget is earmarked for city hall.
Transfers to external boards and agencies such as Kingston police, Kingston Frontenac public library, Kingston economic development, Tourism Kingston, Cataraqui Region Conservation Authority and KFL&A public health will eat up a big chunk of the city’s annual budget — an estimated $69 million in 2022.
More than $42 million will flow to the police department.
Generating extra taxes from new commercial and residential development is a big revenue source for municipalities. Kingston is counting on raising $5.5 million from new assessment growth next year.
But some other traditional revenue sources are still struggling to recover from the impact of the pandemic.
Kingston Transit, for example, is expecting revenues of $5.5 million, just 62 percent of what they were prior to the pandemic.
“Budget projections have assumed a gradual return in ridership and related revenues by 2024,” said Hurdle.
Other city-subsidized services are showing faster signs of recovery.
Parking revenues are expected to be $9 million, representing 90 per cent of pre-pandemic levels, due to lower demand for short-term and off-street parking.
Money collected from the Grand Theatre, and other arts and culture attractions, is expected to be $1.9 million, or 80 per cent of the norm before the pandemic.
Recreation and leisure revenues will climb to $8.4 million in 2022, or 95 per cent of pre-pandemic levels.
Other new revenue sources anticipated for next year:
- $350,000 from the launch of red light cameras
- $180,000 from the opening of the new East End community centre
- $700,000 through the sale of recycling materials and garbage bag tags
On the spending side, the city is ramping up for a hiring spree in 2020 to either replace positions temporarily cut or for new hiring put on hold during the pandemic. It’s also reinstating its performance pay program for managers.
That spending includes an extra two million dollars for more part-time Kingston Transit drivers, $1.2 million for extra recreation staff, $650,000 to staff the Grand Theatre, plus another $1.9 million for new hires “to support council priorities, service changes and other growth-related demands” such as new equity, diversity and inclusion positions, new director and manager roles, additional nursing staff, and a new administrator whose job will be to search out grant opportunities available to the city from senior levels of government.
Like homeowners, the city is also bracing for higher utility, fuel and insurance costs next year linked to inflation and the reopening of city facilities.
The city will also be drawing $3.8 million from its own reserves to cover everything from library book purchases to running next October’s civic election.
Kingston’s capital budget amounts to nearly $71 million for road repairs, building upgrades, equipment purchases and other asset management costs.
The capital budget envelope includes $2.5 million to restore portions of the historic Frontenac County Court House, $750,000 to refurbish the Cricket Field, $725,000 for turtle fencing, and $200,000 for an electric Zamboni at the Leon’s Centre,
Funding for the capital budget will come almost entirely from savings generated from the annual one percent capital tax, thereby eliminating the need for any long-term debt borrowing in 2022.