London

Draft budget plots tax increase that could surpass 4 per cent

What started as an increase target of 2.7 per cent earlier this year has grown to anywhere between 3.2 per cent and 4.5 per cent as the city deals with provincial cuts, riding ambulance service and managing the downtown homeless problem.
The city tabled its draft budget yesterday, laying out a range of choices that could leave taxpayers facing a property tax increase of anywhere from 3.2 to 4.5 per cent. (Andrew Lupton/CBC)

Faced with provincial downloading, sky-rocketing ambulance costs and dealing with the downtown homeless problem, the city of London is headed for an annual property tax increase above three per cent, with the possibility of it rising as high as 4.5 per cent.

The numbers were released Tuesday as the city tabled its draft budget, laying out options for council to choose how the city will spend money over the next four years. 

Just maintaining basic service levels, dealing with provincial cuts and covering a jump in land ambulance costs will mean a 3.2 per cent rise averaged over the next four years. Consider that the floor — one that represents an average annual tax increase of $94 based on a residential property assessed at $241,000 in 2019.  

A property tax increase of 4.5 per cent would add an extra $135 on the average property tax bill each year.

Above the floor of 3.2 per cent, the budget lays out 25 possible spending items . 

Of those business cases, staff have suggested 16 to be "administratively prioritized" by council. These add up to $112 million in annual costs. They include:

  • A 60 per cent waste diversion action plan ($17.6 million.)
  • Back to the River (three separate elements, total cost $14 million).
  • Part A of the Core Area Action plan ($16 million).
  • Filling an infrastructure gap at London Community Housing Corporation ($15.5 million).
  • Master accommodation plan ($13 million). 
  • Continuing the  Coordinated Informed Response ($6.7 million). 
  • Subsidized Transit program  ($3.6) million. 

Outside of the above line items that staff is suggesting council prioritize, they also listed lower-priority projects "for consideration." These amount to about $70 million.

They are:

Which of these "decision points" council elects to drop or adopt will go a long way to deciding where the property tax increase lands. 

The effect of provincial cuts announced last spring threw a wrench into much of the city's budget planning. Treasurer Anna Lisa Barbon says in many cases, the city has no option but to step in and fill the funding gap, though there are some areas the city could choose to not fund.

With tough choices ahead, staff will release a list of optional service cuts on Wednesday. 

Coun. Josh Morgan, the budget chair, said city staff have done an excellent job framing the choices for council.

"There are a series of decisions in this budget and I think what our staff have done is laid out a document that will allow us to work our way through those decisions," he said. 

Voters will have their chance to weigh in at public meetings on Jan. 11 and 15 at Goodwill Industries. 

A public meeting will happen with council sitting as the Strategic Priorities and Policy Committee on Jan. 23. 

The final budget is due for approval in March. 

Council seeks clarity in land ambulance costs

In addition to provincial cuts, the city is also faced with 15.8 per cent jump in land ambulance costs. The service is operated by Middlesex County, which bills the city and receives a grant from the province.

The rise in ambulance costs account for about 0.4 per cent of the tax levy increase. 

London councillors wanted more clarity into the reasoning behind the increase and on Monday Middlesex County chief executive officer Bill Rayburn made a presentation to council.  

He cited a familiar list of factors, including rising call volume, aging population and long off-load delays at hospitals. 

That wasn't enough for some councillors, who said they need more information. 

"There's got to be some way we can come together to get the reasonable estimates that our staff needs," said Morgan.

In the end, council approved a motion to tie any increases in ambulance service to match the budget dollars provided by the province and increase the city's oversight over how the service is delivered. The motion also calls on the province to maintain current service levels. 

About the Author

Andrew Lupton is a B.C.-born journalist, father of two and a north London resident with a passion for politics, photography and baseball.