2022 Budget Preview
By John Swartz
Orillia council has its first crack at the 2022 budget Tuesday at 1 p.m. The primary purpose of summer meetings over the years has been for council to get early warnings about conditions affecting the assembly of a budget, some likely scenarios,, and to set targets – primarily what kind of tax levy increase to not go beyond. Setting targets gives department heads a ceiling to observe when asking for money to operate and how far to go with new services.
It’s important to note the treasurer hired in the fall, Lockie Davis, is retiring; he was hired out of retirement and information SUNonline/Orillia has learned is he had second thoughts about coming out of retirement. John Henry’s appointment to the post was confirmed at Monday night’s council meeting. He will start August 3. Henry was most recently the director of finance/treasurer for the Town of New Tecumseth and previously commissioner of finance and city treasurer for the City of Vaughn.
The treasury department is recommending the budget work within a 2.75% increase on tax bills. The department arrived at the figure because they expect the Ontario Consumer Price Index to rise by 3.7%. Most people can relate to that index, however municipalities have developed a Municipal Price Index, which tracks a different set of goods and services typically used by municipalities (for example cost of food would not factor). Of note, staff is anticipating insurance costs to rise by 12% and fleet costs (fuel) by 7.2%. They say the MPI indicates a 2% increase overall. The part of the 2020 budget supported by the tax levy was $63,251,521, which means each percentage point increase adds approximately $633,000 to the levy property owners pay. Calculations include an expected 1% increase in the tax base.
The good news for property owners is the province has frozen MPAC assessments for another year (2023 as well), so rates are based on 2020 assessments.
Staff also remind council of commitments they have already made for the 2022 budget (electric vehicle charging stations at the Orillia Recreation Center – $8,000; fixing the Coat of Arms – $5,000; funding an Innovation Hub – $75,000 which all come from the tax levy; and $500,000 for studying speed limits which comes from reserves). There are other long-term commitments council needs to take into account like $125,000 grant funding for the Downtown Tomorrow Community Improvement Plan and a $120,000 increase for street and sidewalk cleaning. These things have been approved already, or need to be confirmed to continue in 2022.
Council has indicated some other projects they might pursue staff is foreshadowing, like a municipal boundary study and a contribution to Soldiers Memorial Hospital, which do not have dollar figures attached to them, and have not been approved.
Council also has been chipping away at the reserve fund deficit. They have reduced it from approximately $60,000,000 in 2016, to about $16,000 000 in 2020. On reserves, council dipped into the tax rate stabilization reserve in 2021 to eliminate a 1% tax levy increase. Council has to cancel that move for 2022, which adds 1% back into the budget. Staff are also anticipating a .5% decrease in interest income.
Road Fixing
Another report on the agenda relating to the 2022 Budget is the plan to fix up roads and sidewalks in 2022 and beyond. There is no financial request attached because each of the 2022 projects will be itemized and voted on separately in November when deliberations occur, so this report serves mainly as a backgrounder to plans.
The road budget is divided into 3 parts, repair (fixing potholes), resurfacing and reconstruction. The budget for resurfacing ranged from $375,000 in 2015 to $854,000 in 2021. Staff propose an overall budget of $839,000 to resurface parts of Barrie Road, Simcoe Street, Commerce Road, Clayborne Place, Maple Drive and Precision Drive.
Long-term, staff are projecting expenses to make improvements to Old Barrie Road at Highway 11 because the MTO is intending to replace the bridge (which you might recall was just expanded recently) and realign the road in 2026. The MTO is also planning on making changes at Highway 12 and Murphy Road, which will involve the City spending some money to widen Murphy Road.
There are only 2 reconstruction projects scheduled for 2022, Centennial Drive ($9.5 million) and West Street from James Street to Highway 12 ($2.0 million). Looking ahead. Laclie Street will start a 3 year construction project in 2023, Peter Street from Colborne to Coldwater in 2024, West Street from Coldwater to Queen in 2025 and reconstructing Mississaga Street also in 2025.
Some neighbourhoods are also getting new sidewalks to replace crumbling ones. Both sides of Cedar Street from Laclie to Cowan Streets, Canice from Borland to Jarvis, St. Jean Street and Hammond Streets are on the schedule.
One More Report
A third report is essentially an outline of what has to be done to create a plan to increase winter sand removal. Basically staff are saying there wasn’t enough time to answer council’s two-week-old enquiry motion for a report in time for this meeting. There is no dollar figure attached.
Rogers TV is not televising this meeting and a recording will be made available afterward.
(Photos by Swartz – SUNonline/Orillia; Images Supplied)
