Barrie property taxes appear to be heading only one way this year — up.
Council heard in a presentation Wednesday night that Barrie homeowners face a 3.95 per cent property tax increase at this stage in the city’s 2023 operating and capital budget process. This would mean $182 more for a typical Barrie home assessed at $365,040.
“While we’re treating it as a one-year budget, these pressures are going to exist most likely during your term of council,” Craig Millar, Barrie’s chief financial officer, told councillors.
“Just as everyone at home, residents are facing inflation and higher interest costs, as are businesses, so is the City of Barrie," the treasurer added.
The annual budget sets service levels, along with the taxes and fees to pay for city services, as well as water and sewer (wastewater) rates, which are slated to increase by 3.7 per cent, or $13.75, and 5.0 per cent or $26.42 respectively, this year.
It’s expected to cost $8.1 million, or 2.66 per cent, more just to maintain all city services this year.
Coun. Gary Harvey, chairman the city’s new finance and responsible governance committee, asked about those costs.
Millar said the strains included inflation, the highest in 30 years, new contracts with city employees and with Barrie Fire and Emergency Service members.
That 3.95 per cent property tax hike has three main components: city operations, service partners and the dedicated infrastructure renewal fund.
City operations include the 60-plus services offered in Barrie, such as public transit, winter control, garbage and recyclable pickup, park maintenance, and recreation facilities. These services are slated to increase almost $2.7 million this year, or 0.88 per cent more.
Service partners include Barrie city police, the Barrie Public Library and the County of Simcoe, which provides a number of services to Barrie, such as land ambulances and paramedics, health and emergency services, Ontario Works, children’s services, social housing, and long-term care homes.
These service partner costs are to increase by $6.3 million in 2023, or 2.07 per cent more.
It should also be noted the annual police budget is normally about 20 per cent of the city’s operating budget. Police want 7.28 per cent more or a $3.4-million increase to its 2023 budget, as presented to the police board late last year.
The dedicated infrastructure renewal fund helps pay for the replacement and renewal of Barrie’s roads, pipes, buildings and bridges. It’s worth $3 million this year, and one per cent on the property tax bill.
All of which equals 3.95 per cent more for homeowners.
This year’s capital budget totals $360 million, although $271 million of that figure is requested spending, not yet approved.
There is $89 million in approved capital spending and it includes road resurfacing and flood mitigation, along with the study and design of the upgrades and capacity of the city's wastewater treatment facility.
The city explains its capital plan as one year of budget, four years of forecast and five years of outlook.
This budget faces a number of pressure points.
Bill 23, Ontario’s More Homes Built Faster Act of 2022, could greatly impact development charges (DCs). They are designed to recover the capital costs associated with residential and non-residential (commercial, industrial, institutional) growth within a municipality from developers, so existing residents don’t have to foot the bill.
Millar said Bill 23 could cause a reduction in DC revenues between 5.0 per cent and 10 per cent on an annual basis. The city should have collected approximately $100 million in DCs last year.
If that figure holds true in 2023, Bill 23 could cost the city $5-$10 million in DCs revenue this year.
There are also some fiscally troubling elements to the 2023 budget.
Barrie’s debt levels, now and into the immediate future, for example.
While municipal governments must, by law, under the Municipal Act, have balanced budgets, they can accumulate debt.
Barrie’s forecasted debt is $321 million this year, $329 million next year, $322 million in 2025, the same in 2026 and then $327 million in 2027.
But the cost of servicing the debt — interest and fees — is substantial, even in a $400-million-plus budget.
Barrie’s debt servicing costs this year are projected at $41 million, $44 million next year, $46 million the following year, $49 million in 2026, and $50 million in 2027.
But there is a silver lining, of sorts.
“About 59 per cent of our debt is funded by development charges,” Millar said, and he noted much of the debt is from building the surface water treatment plant and improvements to the wastewater treatment facility.
Mayor Alex Nuttall commented about debt and DCs.
“It almost feels a bit like a shadow game related to where it (DCs) comes from, because if we weren’t paying 'X' amount of dollars to service our debt, we’re going to be building something with them (the DCs) or contributing them to a project somewhere,” he said. “But if we see a 10 per cent reduction in our DCs," because of Bill 23.
There are measures in the 2023 budget that will not cost Barrie residents more.
Parking rates, for example, are not slated to increase.
And while stormwater user-fees are new, they could be less than what was paid through property taxes.
The owners of single-family Barrie homes would pay $10.75 a month — or $129 annually — in stormwater user-fees starting this spring.
The average homeowner had been contributing $174 annually toward stormwater management through property taxes. For 2023, the proposed rate would be billed for nine months beginning April 1, 2023, and would total $96.75 for the year. The first three months of fees would be funded by the federal gas tax rebate, totalling $2.6 million. These stormwater user-fees still need approval as part of this year’s city budget.
And the schedule for Barrie councillor budget talks has been set, if not cast in stone.
Barrie’s service partners are scheduled to make their budget presentations to councillors on Feb. 1.
Sitting in general committee, councillors will begin budget deliberations Feb. 8 and have left time Feb. 9 as well, if required.
City council could approve the 2023 operating and capital budget on Feb. 15.
Last year’s property tax increase was 2.94 per cent, which on a typical city home assessed at $362,740 equalled an increase of almost $132, bringing property taxes on that house to $4,612 last year.
That 2.94 per cent increase is a blended number, for municipal and education taxes, which almost never increase, and included 0.75 per cent more dedicated infrastructure renewal funding.
Last year’s budget also included increases to water and wastewater (sewer) rates — 2.4 per cent or $8.75 more for water, an additional 3.03 per cent or $15.61 for sewer, for a typical household that consumes 180 cubic metres of water annually.
So the yearly cost of Barrie’s water and sewer services in 2022, on this typical household, were estimated at $374 and $531 respectively, for a combined cost of $905. This is $24.36 or 2.77 per cent more for both services compared to 2021 levels.
