Barrie homeowners face a 3.59 per cent property tax increase in 2021, or paying another $160 on a typical house assessed at $367,550.
Those are the numbers city councillors heard from staff Monday night during a presentation on next year’s operating and capital budget, which has yet to be debated or passed.
“This is the starting point of the city’s budget process,” said Mayor Jeff Lehman. “I think there's zero chance the increase will stay at 3.59 per cent. As we heard tonight, some of the numbers may move before council even debates the budget as Safe Restart funding (federal/provincial COVID-19 money) is finalized, etc.
“I’m sure council will want to bring that number down quite a bit regardless," he added.
Councillors will hear from their service partners — Barrie police, paramedics and the County of Simcoe — on Jan. 11, 2021, deliberate the budget on Jan. 18 and are scheduled to pass the budget, which sets property taxes and service levels, on Jan. 25.
“Ultimately, it’s your service levels that drive your costs,” said Craig Millar, the City of Barrie’s finance director. “I think there are some opportunities for some kind of solution to help to get to a lower level (of property tax increase) for 2021. But I would caution to just remember that could set you back in 2022 and 2023, in some of our big capital plans.”
And taxes aren’t the only thing heading up.
At this point, water fees would increase by 2.48 per cent or $8.83 a year on a typical home; its water fees were $356 this year. And sewer, or wastewater, fees would increase by 2.41 per cent, or $12.21 a year on a typical home which paid $507 in 2020. That’s another $21.04 in total in water/sewer rates next year.
And the property taxes — municipal and education — on that typical Barrie home assessed at $367,550 were $4,454 this year.
Coun. Mike McCann had a number of questions for Millar, but his last one got the most attention.
“There is some interest in council in having a zero percent tax increase,” McCann asked. “How feasible would that be…with the amount of information you have in front of you?”
“Are there options in there to get to a zero percent, utilizing reserves such as the reinvestment reserve? I would say yes,” Millar said.
“My one word of caution would really just be is if you’re referring the cost to another year, slow and steady is always the approach you prefer in municipal finances. You don’t really want big shocks, but COVID happens and you get a big shock.
“One of the reasons you do have stabilization reserves is to deal with situations like this,” he added. “The stronger you are financially, the better you are to help the community out.”
Earlier this month, Coun. Sergio Morales, chairman of Barrie’s finance and corporate services committee, said he would push city staff, and councillors, not to increase property taxes in 2021.
Morales didn’t make any promises, as he said it wouldn’t be easy.
His plan was to use a combination of the city’s federal/provincial funding to battle COVID-19, lower city operating costs while on pandemic shutdown, use any 2020 property tax surplus against next year’s tax increase, and use city dividends from the city’s stake in Alectra.
Morales did say he was prepared to cut city services to get to zero, but only to those services that it makes sense to cut, scale back or delay during the response to the pandemic.
Millar’s presentation Monday laid out why councillors are looking at a 3.59 per cent increase, which amounts to another $6.5 million.
Coun. Ann-Marie Kungl asked about Barrie’s service partners being told about the 1.95 per cent cap.
“The service providers got this message… has that been a formal communication?” she asked.
“We do communicate to our service partners… that this is what council is wanting to see,” Millar said. “I’m not saying they all achieved that, but they were certainly given the direction.”
City service partners have asked for another $3.2 million next year, maintaining Barrie’s service levels in 2021 is $5.47 million more, debt management another $900,000, growth $500,000. This is partially offset by $4 in assessment growth.
In all, the $6.5 million is 2.56 per cent more, plus a one per cent increase for the dedicated infrastructure renewal fund, which is used to help replace and renew the city’s roads, pipes and buildings, to bring the tax hike to 3.59 per cent at this point.
This 2020 property tax increase was 2.96 per cent, or 1.96 per cent more to deliver city services and those provided by Barrie’s service partners — for policing, paramedics, social housing, etc. — plus one per cent for infrastructure.
In mid-October, the city was staring down a $2-million deficit by year’s end, although that could be offset by Safe Restart Agreement funding, federal/provincial money to help municipalities pay pandemic-related costs.
In its first phase, the city’s allocation was $6.6 million in municipal funding, plus an additional $2.6 million in transit funding, for a total Phase 1 allocation of almost $9.2 million.
The province expects the city to place any excess funding, not needed in 2020, into reserves to be accessed to support COVID-19 operating costs and pressures that may occur next year.
Millar noted then that the city is facing a $1-million parking deficit in 2020 and the County of Simcoe is going to require anywhere from $600,000 to $1 million more to cover its additional long-term care costs.
The city has also applied for additional funding to address the financial implications of the pandemic through the second phase of Safe Restart — if COVID-19 operating costs and pressures exceed the phase one allocation. It expects to hear from the province this month about that funding.
In the municipal operating stream, as much as $1.39 billion is available to Ontario municipalities to provide support needed to respond to 2020 COVID-19 impacts and address operating pressures. The municipal operating stream is being allocated in two phases, with half of the funding allocated in phase one for all municipalities and as much as 50 per cent allocated in Phase 2 for municipalities that require additional funding this year.
