Budget Overview

Council approved our three-year budget for 2024-2026.  I am dedicating this newsletter to the complete budget process for those interested in learning more.  Check out last month’s newsletter for information on the original budget release, asset management report cards and our reserve funds – https://www.roycebodaly.ca/november-december-2023/.

Staff Proposed Multi-Year Budget

The City of Waterloo approves a three-year budget for the remainder of our Council term and have done so since 2008.  A three-year budget not only saves thousands of hours of staff time (vs. three one-year budgets), but provides greater flexibility, allows for greater management of projects, allows our finance team to confidently pursue grants and comes with advantages related to tendering.  The original staff proposed budget was as follows:

2024 – 7.46% increase; $110 average increase per household

2025 – 7.30%; $116

2026 – 6.44%; $110

Property Tax Landscape

When looking at the 24 largest municipalities in Ontario, City of Waterloo residents currently pay the 13^th lowest amount per assessed value and the 10^th lowest amount based on the average home selling price.  When looking at property tax increases it is important to note that approximately 57% of your property tax bill is for Regional services (note: the Region of Waterloo approved an increase for 2024 of 6.74%), approximately 13% goes to the Province for school board funding (note: this funding is not increasing for 2024) and approximately 30% of your property tax bill is for City services.  Any increases referenced in this newsletter are for City services only and should not be added together for a total increase (ie a 6.74% increase on Regional taxes, plus a 7.46% increase on City taxes, plus a 0% increase on school board funding is equal to a 6.1% average increase, not a 14.20% increase).

What’s in the Budget?

To watch the full budget deliberations from our February 12^th meeting, follow the below link:

https://www.youtube.com/watch?v=03yZzmBm-Yo

The staff proposed budget includes operational increases related to inflation (labour, materials, etc) as well as other base budget needs to maintain our service levels.  This includes converting contract employees to full time in our parks department as well as staff needed to respond to legislative requirements such as a privacy analyst.  The budget also includes increased funding to deal with the operating impacts of capital/growth.  This includes increases to account for growth in terms of parks, facilities and transportation services.  Also included are investments in infrastructure and preventative maintenance in order to tackle our infrastructure deficit.  The City of Waterloo’s Asset Management Plan suggests that we need to increase investments in our infrastructure by 1% per year (over and above any other tax increases).  Doing so will ensure that the percentage of our assets that are in poor or very poor condition will be at 58% in 25 years, as opposed to 77% without that increased funding (for comparison, 34% of our assets are currently in poor or very poor condition).

What’s New in the Budget?

In addition to the above budget items, the staff proposed budget included a number of service level improvements.  These improvements range from funding for community inclusion initiatives, to economic development and implementing our new digital services strategy.  The three largest investments within this area include:

Implementation of our Fire Master Plan – This is particularly important in the west end of the City as it contemplates expanding the fire station on Columbia Street and hiring 27 new employees (primarily firefighters) to increase our response times, increase coverage on the west end and to ensure the safety of residents across the city.

Responding to Bill 109 – Bill 109 is Provincial legislation that imposed tightened timelines for reviewing site plans, zone changes and official plan amendments.  In order to meet these timelines and to avoid having to refund development fees to developers, the City needs to hire a number of development planners and legal support staff.

Sidewalk Snow Clearing Enhancements – In response to public engagement in 2023, Council endorsed the approval of enhancements to sidewalk snow clearing.  This includes reducing our response times from 72hrs to 48hrs for all city maintained sidewalks, improvements to Regional Road sidewalk clearance and improvements on clearing windrows at key intersections.

What About the Capital Budget?

The 2024-2026 Capital Budget includes 275 projects with an investment value of $364M.  The 2027-2033 capital forecast includes a further 245 projects with an investment value of $556M.  Some of the city-wide highlights for 2024-2026 include; an Indigenous gathering space, the new Civic Common park at the old Regional pumping station on William Street, a skate park at RIM Park, significant renovations at Albert McCormick, new neighbourhood spray pads and ongoing capital investments in initiatives such as traffic calming.  Some key projects in the west end of the city include; the creation of a new bypass road connecting Erb Street into The Boardwalk, the Laurel Creek trail around the perimeter of the Laurel Creek Conservation Area, a west side mini operations centre and the development of a hub park at St. Moritz Park in Clair Hills.

Council Approved Changes – Menu Items

After approving the above in full, Council was then given the opportunity to make changes to the staff proposed budget.  These changes include a variety of menu items, which are options for Council to activate to either increase or decrease the budget.  Menu items that increase the budget are known pressures.  These are items that would further enhance service levels and hire staff needed to advance community goals.  Menu items that decrease the budget are items that could create challenges in achieving community goals, may have serious implications on the administrative functions of the City or could create other risks.  Given the challenging nature of this budget, Council also directed staff at a previous meeting to bring back a number of new menu items that could help us reduce the tax increase further.

To watch the Council discussion on menu items, follow the below link:

https://youtu.be/03yZzmBm-Yo?t=10546

If you watch the above discussion, I think you can see what makes City of Waterloo Council work so well.  I don’t think any of us individually got everything that we wanted out of the budget and yet I think the end result is greater than the sum of its parts.  You will hear thoughtful questions, deliberations and discussion from Council, alongside contemplation of the challenges that we are facing as a community.  A new position (extension and expansion of an existing contract) was approved to support our arts & culture team internally, alongside a commitment to increase funding for the not-for-profit cultural sector in our community.  Additionally a sustainability co-op position was approved as well as a transportation engineering supervisor that will help us achieve our Vision Zero goals and support our crossing guards.  Council also approved a host of reductions.  Some of these reductions see us provide short term relief in 2024 and/or longer term relief by dipping into some of our reserve funds.  Some are related to reducing our investments in tackling our infrastructure deficit.  Some of these reductions seek to adjust the phasing of service level changes, such as our Fire Master Plan.  Some are related to cuts in employees and in our capital budget, while others ask staff to contemplate further efficiencies in operations.

Final Approved Budget

While I do believe that some of the menu items we have activated will put greater pressure on future budgets, I am proud of the work Council has done to put forward a fiscally responsible budget.  The 2024 increase is among the lowest across area municipalities and positions us well to tackle the community goals and priorities that residents expect us to address, including; climate action, traffic safety, accessibility, infrastructure renewal, affordable housing and more.  The final approved budget is as follows:

2024 – 6.14% increase; $91 average increase per household

2025 – 6.34%; $99

2026 – 6.41%; $107

I want to thank everyone who showed up to my Ward 2 Budget Information Session on February 1^st.  For anyone who missed it or would like to talk in greater detail about the approved budget please reach out to me at 519-575-0093 or Royce.Bodaly@waterloo.ca to set up a time to chat.