Barrie councillors begin tax talks
Barrie councillors received a presentation Monday night about the 2017 operating and capital budget, which sets property taxes and service levels this year. City of Barrie graphic.
The devil looks to be in the details of this year’s city budget process.
It wasn’t necessarily the proposed 3.76% property tax increase that drew questions from city councillors Monday, but how it has been arrived upon.
“Why is the police department asking for $1.5 million more?” asked Coun. Peter Silveira.
Coun. Sergio Morales had concerns about Barrie’s infrastructure gap – the difference between what’s being spent on roads, pipes, buildings, etc., and what should be spent – about $48 million this year.
“If we have that gap, if we should be doing $80 million this year and we're only doing $27 million, then that means our assets are going to deteriorate at a faster pace,” he said.
Coun. Doug Shipley was concerned that Barrie’s utility costs are increasing by $256,000 this year.
“I'm very disappointed, if not shocked, a little bit, and not with ourselves ... I see the utility bill is actually up again,” he said. “Is that just strictly because of the increased electrical costs in Ontario lately?”
Coun. Arif Khan was concerned the city was putting aside money in a legal contingency reserve fund.
“It rubs me the wrong way. We're in a very litigious society. We receive the notices on a regular basis. I understand being prepared,” he said. “I want to make sure though that we're not setting up a fund that says 'well, we've got lots of money, come sue us'.”
Patti Elliott-Spencer, Barrie’s general manager of community and corporate services, said that's not the intention..
“It's meant as a stabilization reserve, not to build a war chest,” she said. “We were significantly over-spent this year because of a number of situations that (the city) legal (department) was dealing with.”
But Mayor Jeff Lehman had the big question for city staff.
“Council's budget direction was 2.25% on the operating increase, plus the 1% infrastructure levy for a total of 3.25%. Staff have delivered 3.76%,” he said. “Maybe you'd like to speak to why you were unable to hit the target.”
Craig Millar, finance director and treasurer, answered the mayor's question.
“Without the (1%) infrastructure levy, the amount (increase) that came in was 2.76% and the target, as you noted, was 2.25%,” he said. “I think when you look at our costs to maintain our services as they are, the city came in at 1.96% on the levy, which is, depending on which measure you look at, below or at inflation.
“A lot of the other costs are really associated with managing our assets,” Millar said. “We have, as we've discussed, sort of some shortfalls on our reserves and our debt management. Those numbers are difficult to control when you've already made that investment.
“So I think overall staff have done a pretty diligent job in trying to find efficiencies within the budget.”
Millar said the city needs to keep putting money aside for reserves, however.
“Those contributions are needed. We could argue how many reserves you need to have, but we don't have a lot of money in reserves,” he said. “So those are almost what I would call uncontrollable costs. I think the city has managed its controllable costs well and that would be the 1.96%.”
Elliott-Spencer said much the same thing.
“I think a lot of it is related to the capital-driven costs. Our debt costs do fluctuate each year, depending on the amount of debt that we do issue,” she said.
“From a long-term fiscal sustainability (perspective) ... they are things we feel need to be done, even if we're only doing part of it.”
At this point, it's the tax-funded operating budget proposed by staff that would require a 3.76% tax increase.
That would hike taxes by $145 to $3,992 for the average city home assessed at $302,000. Last year property taxes on that home were $3,847.
The 2017 business and capital plan also includes a 2.5% increase in water rates and a 5% hike in sewer rates.
For the average Barrie home which uses 180 cubic meters of water a year, the estimated 2017 cost is $326, an $8 increase from last year's cost of $318.
The sewer rate hike means an estimated annual bill of $463 in 2017 for that average Barrie home, or a $22 increase from $441 last year.
Adding the tax hike to the water/sewer rate increase would mean an extra $175 for that average Barrie homeowner this year.
“But this is the start of the (budget) process,” Lehman said.
The city’s service partners – city police, Barrie Public Library and the County of Simcoe – make their budget presentations Jan. 16; a staff report and councillors' deliberations are scheduled for Feb. 6 and council approval Feb. 13 – although that schedule is subject to change.
This budget has five building blocks – maintaining current service levels, managing city debt and reserves, service partners, new investment and services, and the 1% infrastructure fund.
It's to replace and rehabilitate Barrie's roads, bridges, buildings and other infrastructure, and this year that 1% equals $2.5 million.
“Infrastructure is the backbone of our community and we have to make sure it is maintained,” said Elliott-Spencer.
“The 1% infrastructure fund was meant to deal with everything we already owned. We also have to be cognisant that we have to address putting money aside for the things that we are building and adding.”
The city is facing many of its traditional budget pressures this year.
The operating component of Barrie's police budget, for example, is approximately 22% of the city’s net tax levy, and it's also the city's largest single operating expense.
The 2017 operating/capital police budget is nearly $50.38 million, or another $1.56 million.
The lion's share of the police budget is for the salaries, benefits and overtime of officers and civilian employees. That's estimated to total almost $47.5 million in 2017, up from $45.7 million last year.
City police have a force of 237 officers and 108 civilian; the 2017 budget calls for an increase of three new civilian positions.
Capital expenditures in this year's police budget total $1.2 million, an increase over last year's amount of $850,000.
There's also $400,000 for a future first-responders campus that would involve police being housed with other emergency services, and $88,000 for a radio system upgrade.
Both those amounts were required by city council, according to the police board's 2017 budget document.
The city not only has an operating budget for providing services, but a capital budget as well.
Construction will begin on key watermain and sewer projects in the former Innisfil land this year.
There will be Highway 400 projects – advancing the Harvie Road crossing design, beginning the design of the McKay Road interchange.
Along with the completion of Military Heritage Park and Centennial Park on Barrie's waterfront.
There will be neighbourhood renewal, in the form of pre-design for four of Barrie's oldest communities.
Morrow Road and Mapleview Drive East construction will be completed.