LONDON, ONT. -- Londoners may dodge COVID19-related costs on their 2021 property taxes, with the financial impacts of the pandemic not hitting bills until 2022.
On Tuesday, council members will get their first official look at a proposed 3.8 per cent property tax increase recommended by civic administration in the 2021 Draft Budget Update.
"Three-point-eight per cent is a good start," says Budget Chair and Councillor Josh Morgan. "That budget includes options that could get us to 3.5%, and that’s before council starts engaging with the public or debating it themselves."
In the same way our citizens are struggling financially as a result of this pandemic, so is the city of London struggling,” adds Mayor Ed Holder. “What we’re trying to do is find our own balance between care and cost.”On March 2, city council approved a four-year budget.
On March 2, city council approved a four-year budget.
Several financial amendments to the draft 2021 Operating Budget would reduce the tax rate hike next year, only to see a higher-than-estimated increase in 2022.
YEAR APPROVED DRAFT UPDATE CHANGE
| March 2020 | November 2020 | Change | |
| 2020 | 4.4% | N/A | N/A |
| 2021 | 4.4% | 3.8% | -0.6% |
| 2022 | 3.4% | 3.7% | +0.3% |
| 2023 | 3.3% | 3.3% | N/C |
| Average | 3.8% | 3.8% | N/C |
The average annual increase on a home with an assessed value of $241,000 in 2019 would decline slightly from $116 each year to $114.
Included in the reduced average annual tax rate are five areas of cost avoidance or deferral:
- $610,000 increase of provincial funding to the Middlesex-London Health Unit (MLHU)
- $1.6 million pandemic-related deferral of expansion to children centres
- $425,000 pandemic-related reduced investment in Ontario Works
- $1.6 million financial recoveries from local water boards
- $1.9 million reduction to municipal corporate contingency budget
The budget update also recommends forgiving a promissory note with the RBC Place Convention Centre, and repairing the fire suppression system at the blue box sorting facility.
The draft tax rate increase does not include funding for a proposed Film and Multi-media Strategy, nor additional funding to implement the 60 per cent Waste Diversion Action Plan.
Civic Administration is awaiting more information on the 2021 Land Ambulance Budget, and an additional $700,000 in ‘cost pressures’ being considered by the MLHU.
Councillor Morgan would like the Health Unit to avoid pushing those costs onto taxpayers.
"It has not gone to their board yet. I’m hopeful that their board will look at how they can absorb most of those internally, before it hits the municipal funders," says Morgan.
In her report, however, City Treasurer Anna Lisa Barbon warns of significant financial uncertainty stemming from the pandemic.
“Many services will continue to experience persistent COVID-19 financial impacts into 2021,” writes Barbon.
Pandemic impacts on municipal services are estimated to exceed $20 million in 2021.
The largest impacts include:
- $11.3 million reduced ridership on London Transit
- $4.6 million reduced OLG revenue sharing
- $2.5 million reduced investment income
- $1.7 million shortfalls at RBC Place and Centennial Hall
“It is too early to determine which financial impacts will be permanent,” explains Barbon in the report. “(The) 2021 Budget Update avoids premature budget changes pending further experience to assess longer term impacts.”
Mayor Holder says city hall won’t be able to cover the $20 million in pandemic-related costs in 2021.
"You try to be prudent when you can be prudent, but it looks like we are going to be going back to senior levels of government for support."
Civic Administration my temporarily adjust service levels or defer capital projects in 2021 to offset some of the pandemic-related financial impacts.
The draft budget update will be officially tabled at the SP&P Committee on Tuesday.
City Hall will hold a public participation meeting on the draft 2021 Budget Update on Dec. 7, and council members will deliberate on Dec. 10.
