Senior staff provide new council with 2023 budget overview
City treasurer Carolyn Daynes provided the incoming council what she called “a high-level overview” of the proposed 2023 city budget. At the same time, she also tried to address some of the complaints about Kawartha Lakes that the newly elected councillors heard on the campaign trail including that taxes are too high, the city has not made enough investment in roads, it is overstaffed, carrying too much debt and that any or all city surpluses should be used to lower taxes for residents.
“Normally we pass a budget in December,” Daynes began, “but because of the municipal election this budget will be passed in February or March of 2023. Between 2018 and 2022 the city has provided a consistent level of 200-plus services in an effective manner.”
Daynes told council that the operating budget is broken up into five “service buckets” that include roads, waste and transit, police, fire and paramedics, parks, recreation, libraries and facilities, building, planning and economic development, and children’s services, housing, long term care and Ontario Works.
She suggested to council that to continue to provide these five service silos with stable funding over the next five years, in 2023 the city would need to increase taxes by 3 per cent, an amount suggested by the previous council and included as part of the Long-Term Financial Plan.
“From 2018-2022 the capital budget invested $160 million in projects that focused on the rehabilitation, construction and acquisition of municipal assets,” Daynes said.
Those projects included the revitalization of the downtowns in Lindsay, Fenelon Falls and Omemee, the construction of the Mariposa Fire Station, Logie Street Park, the Bobcaygeon Beach Park and the reconstruction, rehabilitation or resurfacing of 680 kilometres of roads.
“Between 2018-22,” Daynes said, “total tax increases have been 14.9 percent, an average of 2.82 percent per year. Our commercial base is not very deep so our residential base is more heavily taxed. We only have 79,000 people in the city.”
Daynes said that the city has 5,300 kilometers of roads to maintain with a population density of only 26 people per square kilometre and a very low road intensity of only seven homes per lane kilometre of road.
To give context to the enormity of the city’s road responsibilities Daynes left council with a stark comparative.
“Florida one way from Kawartha Lakes is 2,300 kilometres,” Daynes said. “(Because of our low population density and low road intensity) roads are more expensive to maintain (than in some other one tier municipalities with larger populations and less space.)
“Staffing as a percentage of total operating expenses,” Daynes continued, “is on the low end at 37.5 per cent (when compared to other one tier municipalities). We are not overstaffed by any means.”
On the issue of what to do with the slim surplus the city has generated in each budget year since 2021, Daynes spoke about how that money has been put into various management reserves.
“We have had an annual surplus since 2021 of about $3 million. We have allocated that money to the asset management reserve, the fleet reserve, the fleet maintenance reserve and the Victoria Manor reserve.”
Regarding debt, Daynes was less concerned than some in the general public based on the statistics presented by her department to the incoming council.
“The province says we can have as much as 25 per cent of our total revenue as debt payments. The city is currently carrying $140 million in debt against $4 billion in assets. For a Kawartha Lakes home owner, that is the equivalent of having a $24,500 mortgage on a $700,000 home.”
“With the Long-Term Financial Plan, our goal over the next decade is to provide consistent service levels with no real increases or decreases.”
Councillor Pat Warren asked if the city had saved during the years of the pandemic.
“We received $7 to 8 million from the province (in additional funding) during that time,” Daynes said.
Mayor Doug Elmslie wanted to talk more about the potential tax increases.
“A 3 per cent increase to the budget does not necessarily translate to a 3 per cent increase to a home’s property taxes,” Elmslie asked.
Daynes told the mayor he was correct, and that many other factors also go into determining a future taxation rate.
Elmslie also asked if all of the city debt would have to be paid by Kawartha Lakes ratepayers.
“Water and wastewater debt will be paid through user fees,” Daynes said.
Councillor Ron Ashmore was very concerned that post-pandemic MPAC increases, which have been put on hold for the duration of COVID would put unrealistic burdens on local taxpayers.
“I expect it (MPAC) to be phased in by the province gradually,” Daynes said.