It's a figure that Sutcliffe committed to during the election campaign, and one that departs from former mayor Jim Watson's recent practice of three per cent annual increases.
City council members will vote Wednesday on directions for the crafting of Mayor Mark Sutcliffe’s first budget, including a property tax increase between two and 2.5 per cent.
It’s a figure that Sutcliffe committed to during the election campaign, and one that departs from former mayor Jim Watson’s recent practice of three per cent annual increases — leaving more money in residents’ pockets and less coming in to city coffers, as the municipality contends with what staff say are “unprecedented inflationary pressures” and lingering financial impacts stemming from the COVID-19 pandemic.
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A staff report to council on the budget directions also says that a transit fare increase of 2.5 per cent will be included in the 2023 budget “for consideration,” because it’s consistent with what council directed through a 2017 long-range financial plan for transit.
If ultimately approved, this would seemingly go against a Sutcliffe campaign commitment to freeze transit fares at current levels for at least one year.
Staff are recommending a two to 2.5 per cent increase for each levy that makes up residents’ municipal tax bills.
At two per cent, for the average urban home, that works out to an $82 increase, with the city-wide levy rising by $52, the police levy going up by $13 and the transit levy increasing by $16. A 2.5 per cent tax increase, in comparison, would add another $22 to the total for the average urban home, assessed at a value of $415,000.
If the directions are approved, council would ask the police services board, transit commission, Ottawa Public Library and Ottawa Public Health board to draft their respective budgets based on this two to 2.5 per cent tax increase, which will also guide staff work on the development of the overall 2023 draft budget, scheduled for tabling at council on Feb. 1.
In their directions report, staff write that the budget will reflect post-COVID pressures, such as reduced transit fares, with ridership still not expected to fully rebound next year. Apart from Ottawa Public Health, there’s currently no confirmed funding from upper levels of government to offset these pressures.
“Staff will prepare mitigation measures that could include the deferral of capital projects and a discretionary spending pause, further efficiencies and wherever possible one-time reduction in expenditures and various additional mitigation measures for consideration by Council as required.”
After revealing his taxation commitments and financial plan during the mayoral campaign, Sutcliffe stated unequivocally that he would not cut any programs or services. He did, however, promise to oversee a “full strategic review of all city operating and capital spending” before the tabling of the 2023 budget, and that he would find $35 million in efficiencies to support his platform commitments, including through attrition and elimination of vacant non-essential staff positions, reduced work with consultants and using technology to “better serve residents.”
Staff wrote in their report that a list of “efficiencies and opportunities” will be included in the draft budget.
They also noted that “current external economic conditions and supply chain pressures have resulted in unprecedented inflationary pressures impacting all city services” and that “significant increases on fuel, construction indices, parts and supplies will have a significant impact to the 2023 budget pressures.”
His promised 2.5 per cent cap on property tax increases would apply for at least 2023 and 2024, Sutcliffe said ahead of the Oct. 24 vote, and he would target the same for the third and fourth years of his mandate.
When council votes on the budget directions Wednesday, it will kick off a budget process that they’re also scheduled to sign off on at the same meeting.
The process sees the mayor and city manager work on developing a draft budget aligned with the budget directions approved by council, consulting with councillors during its preparation.
The public will have an opportunity to weigh in through the city’s consultation website, Engage Ottawa, and through any consultation opportunities their ward councillor decides to arrange.
After the draft budget’s tabling, council committees will meet to consider the parts of the budget they’re responsible for and hear public delegations. Council would meet March 1 to consider budget recommendations from committees and boards, and vote to adopt the budget.
Staff also noted that a climate lens will be applied for the first time to projects in the capital budget, to provide a better understanding of city spending towards the implementation of its climate change master plan, greenhouse gas emission reductions and climate change resiliency.
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