2021 draft budget: $3.9B in operating costs with 3 per cent tax increase; $153M deficit if pandemic lasts all year
OTTAWA -- Mayor Jim Watson and City Manager Steve Kanellakos have unveiled the 2021 City of Ottawa draft budget.
The draft operating budget comes in at $3.94 billion.
Council directed City staff to draft a budget that includes a three per cent property tax increase, which would add an extra $115 to the average property tax bill next year for urban residents or an extra $88 for rural residents.
The water rate is going up by 4.5 per cent for urban residents and 10 per cent for rural residents, which translates to approxmiately $37 dollars next year for urban residents and $7 for rural residents. Urban residents pay water, wastewater and stormwater fees, while rural residents who are not connected to the water system only pay stormwater fees.
OC Transpo fares are scheduled to increase by 2.5 per cent on Jan. 1, 2021 and the transit levy on the tax bill is expected to increase by 4.6 per cent.
The cost of the EquiPass for low-income residents will remain frozen at 2018 levels.
Staff have warned the COVID-19 pandemic will continue to affect the city's finances in the new year. The city is anticipating a reduction in transit and recreational revenues as ridership and recreation program registration is not expected to return to pre-pandemic levels in 2021.
Staff are forecasting a deficit of $153.5 million in 2021 if the COVID-19 pandemic lasts for the full 12 months. In order to run a balanced budget, which is required under provincial law, the City would require aid from other levels of government to meet that budgetary pressure, should it be realized. City Manager Steve Kanellakos said Wednesday there is a "Plan B" should the provincial or federal governments fail to cover some or all of the deficit.
Speaking to reporters after the council meeting, Kanellakos said, should funding from upper levels of government not come through in 2021, the contigency plan will focus on maintaining services as much as possible.
"We started looking at the things we could do within our own steam without impacting services," he said. "We're going to look at capital projects, we're going to look at our reserves. Eventually, if we're pushed there, we may have to get into service cuts and that's probably the most difficult choice council is going to have to make."
Mayor Jim Watson said the major deficit staff are project, if the COVID-19 pandemic lasts through 2021 shows the position in which municipalities in Ontario find themselves.
"This really highlights the straight jacket municipalities are in. We do not have a lot of revenue tools at our disposal," Watson said. "The very fact that we have to rely on property taxes to fund things like social services shows there's that inequity in the system. We're not going to change that now."
He said that support from other levels of government during the pandemic is crucial.
"We couldn't do what we're doing now, in terms of all the extra work as a result of COVID-19, if we didn't have that support from the premier's and the prime minister's governments. Obviously, we're talking about hundreds of millions of dollars that are required to provide an increased level of service and to offset the revenue loss from things like recreational fees and transit."
The city is also expecting the ongoing pandemic will increase costs for cleaning, personal protective equipment and staffing to meet service delivery requirements.
Total operating budget: $3.9 billion
Total capital investment: $781 million
Property tax increase: 3%
Water rate increase for urban connected residents: 4.5%
Water rate increase for rural non-connected residents: 10.1%
- $45 million to resurface roads, up from the yearly average of $35.5 million in the last Term of Council
- $28 million to renew roads infrastructure, allowing for a cost savings by coordinating needed sewer and road work
- $40 million to support rural infrastructure, an investment on par with the four-year average of $39.7 million
- $57 million to fund road growth projects
- $9.9 million to repair asphalt, including potholes
- Hire 14 full-time paramedics
- Hire 30 new police officers
- $7.5 million to build a new fire station in Kanata North
- $2 million to build a paramedic deployment facility in the west end
- $8.7 million to cap Stage 3A of the Trail Waste Facility
- $3 million to enhance and retrofit facilities and reduce energy use, costs and greenhouse gas emissions, with an average eight-year payback
- $1.5 million to plant 125,000 trees
- $1.2 million for solid-waste projects, including expanding the recycling in parks pilot
- $12.6 million to improve active transportation facilities through the Ottawa Pedestrian and Cycling Plan
- $4 million to implement the Strategic Road Safety Action Plan
- $806,000 to implement temporary traffic-calming measures
- $523,000 to improve road safety
- $512,000 to install pedestrian crossovers
- $500,000 to improve technology and support development of a bike-parking program
- $7.8 million to design, upgrade and expand the Huntley winter materials storage facility and two buildings at the Moodie works yard
- $50,000 to support traffic-calming projects for each ward, guided by the Ward Councillor
- $12 million to improve intersections, adding traffic signals and addressing safety concerns in growth areas
- $23.9 million to purchase and install fare control equipment for all Stage 2 extensions, and to update existing equipment to allow Open Payments
- $13 million to improve Blair and Tunney’s Pasture stations, adding canopies and information panels, as well as replacing an elevator and adding an elevator at Blair Station
- $6 million to install operator barriers on existing buses
- $6 million to prepare for and deliver expanded rail service on Lines 1 and 2
- $3 million to modify roads, signals and other traffic measures to improve bus speed and reliability
- $2 million to upgrade OC Transpo’s fare systems
- $1.5 million to install additional high-resolution video cameras in transit stations
- $1.5 million to improve stations and other facilities with amenities like benches
- $1 million to install new bus pads, shelters and other improvements at bus stops
- $500,000 to improve accessibility at stations and other facilities
- The cost of the EquiPass and the Community Pass for Ontario Disability Support Program recipients will remain frozen at 2018 rates for another year
- $15 million to create new affordable and supportive housing, matching investments in both the 2019 and 2020 budgets for a three-year total of $45 million
- $5 million of that investment is an increase to the affordable housing base budget, on top of a $1-million increase in 2020
- $33 million for community-based housing and homelessness programs and supports
Long-Term Care Homes
- $15 million for staffing, PPE and infection control at the City’s four long-term care homes, to help prevent the spread of COVID-19
- $9 million for renovations, equipment and accessibility for safety, comfort and to provide quality and professional services for the residents
- $25.2 million in Community Funding to help non-profit providers deliver social services to residents facing the greatest need – an increase of $485,000
- $500,000 in one-time funding to support local agencies as the City transitions to a new Community Funding framework
Parks, recreation and culture
- $6 million to upgrade and improve parks
- $1.03 million to partner with community groups to develop, renovate, expand and improve parks and recreation facilities
- $682,000 to upgrade and make recreation infrastructure better meet community needs
- $500,000 to redevelop parks
- $300,000 to repair facilities and improve public access and service at City buildings
- $100,000 per ward, to be used at the discretion of the Councillor to enhance recreation or park facilities