Over the course of August 16th and 17th, City Council heard reports from Comissioners concerning the impacts of three all-inclusive tax rates for the 2024 Peterborough City Budget and their respective departments. 

Following seven hours of meetings, Council passed a motion to recommend a range for Staff of 4.5%-5.5% which passed 9-2 with Councillors Keith Riel and Dave Haacke voting against. The decision will be ratified at the next Council meeting on August 28th.

These presentations represent a new stage in the budget process for the City and, were introduced by Jasbir Raina, the City’s new Chief Administrative Officer, who took up the position in June. 

These reports follow a resolution by Council on June 26th in which Councillors directed staff to prepare presentations based on a 5.59% all-inclusive tax rate, which had previously been deemed by Staff to be an estimate of the required tax increase necessary to maintain service levels in the city. 

Commissioners were also asked to include information regarding service level impacts of rate increases set at 3% and 7%, and outline any major capital projects being planned within their portfolios.

A key point Raina made before presentations started was that what these reports outlined were not suggestions, but rather an overview of the options available to staff. 

“Over the next few months, staff will continue to work with Council to develop a final budget,” Raina told Councillors. “I want to make it very clear that when I say status quo it means that if we want to maintain the current service levels into 2024, the approximate tax rate comes to 5.59%” 

The June resolution also requested that the Peterborough Police Services Board consider deferring planned hires for 2024 so that the City can better understand the impacts of the Service’s 2023 hiring on an annualized basis. 

Significantly, this budget pressure is not included in the 5.59% estimate, a point Raina emphasized during his introduction.

The Service had previously been approved for 11 new staff members over the second half of 2023—a combination of civilian and officer positions—which is part of a five-year plan which will see 49 new hires between 2023 and 2027. The annualization of these positions presents an unknown moving into municipal budget talks for 2024, and therefore staff was unable to account for them in their estimations. 

“The addition of 2024 staffing enhancements would move the All-Inclusive rate far beyond what is already proving to be an uncharacteristically high All-Inclusive rate,” the June report from staff notes.

Additional factors which had to be accounted for when determining a suggested tax rate increase is the possibility of a shortfall in funding for Public Health in 2024. 

The recommendations from the June report included a status quo budget for Peterborough Public Health which assumed the lack of provincial mitigation funding, which had previously been granted for 2023. Should the provincial funding model remain the same and the province also not provide mitigation funding, then Public Health in Peterborough would require as much as $1.9M—a 67% increase from 2023 funding levels from all partners—and the possibility of a 12% increase in required funding from the City.

With this context, the presentations from staff, which outlined the impacts of three different scenarios, never quite lived up to the expectations of councillors who felt that the numbers being discussed were distracting from these looming realities and budget pressures. 

Following a presentation by Commissioner of Corporate and Legislative Services, Richard Freymond, Councillor Kieth Riel made it clear that not accounting for these two major possible expenditures during these conversations would result in a lower estimation of the actual tax increase property owners will pay in 2024. 

Riel was clear as well about the legal ramifications for refusing to fund both the Police Service and Public Health should they be unable to find the funds through the budget process. This possibility, however, only further drove home the importance of including these costs in order to be transparent with taxpayers and community members as Council and Staff work together to land on a final number.

Councillor Alex Bierk, on the other hand, had concerns regarding the process Staff had followed over the course of determining where cuts would occur in order to fit into the 3% tax rate range. 

“We were just presented, department by department, what the impacts of the different tax rates would be like, and so when we're looking at a tax rate that has to cut, pare down, or remove services or programs or capital projects, what is the criteria?” Bierk asked. “Is this just a numbers based exercise? Or do you have specific criteria that you're looking at to find these efficiencies?”

To this, Commissioner Freymond clarified that he has been consistent in his view that a status quo tax increase would be 5.59% but that number, he was careful to add, rested on “a whole list of assumptions.”

“If you want to boil it down to a number exercise, going from 5.59% to 3% is $5M less,” Freymond continued.

Councillor Joy Lachica brought up the impact of Ontario’s Bill 23 the More Homes Built Faster Act, which included new exemptions for development charges for new residential buildings that fit specific criteria.

For constituents, Lachica underscored the fact that it’s a matter of communicating where that tax rate number is coming from and the main factors for why it is higher this year than in previous years. 

“The big question mark is why? Why do we see the number 5.59? And I think, you know, it's so important for us to be able to explain that there have been legislative changes as well,” she said, alluding to the fact that this budget needs to account for lost revenues for the City which it may have previously recovered through development fees.

Freymond stated that in his staff’s estimation this legislation would cost the City nearly $10M over a series of years, however, he would need to go back and confirm the actual numbers. He was confident, however, that the province’s decisions in regards to housing development would impact the City significantly.

“Just those pieces of legislation are costing and are going to cost the City of Peterborough money. We will feel the effects of it over time, if we will realize it probably through reduced scope, in terms of what we can do in our capital program,” Freymond told Council Wednesday evening. 

Acting Commissioner of Infrastructure and Planning Services Michael Papadacos, discussed the realities that a 3% tax rate increase could potentially result in the deferment of key initiatives for the Transportation Master Plan, as well as result in the elimination of flood reduction subsidies, traffic calming measures, and tree planting programs. 

In terms of transit, the move to a 3% tax increase would likely see transit be impacted substantially, with many of staff’s previously announced cuts to service being implemented as a result. These include reduced weekday service, no holiday or Sunday service, staff layoffs, and ultimately an extended period of ridership recovery.

When the meeting of the Finance Committee returned from recess on Thursday evening, a Report from Comissioner of Community Services Services, Sheldon Laidman, discussed the possible scenarios as they relate to the implementation of various social programs and investments in the arts and culture across the community.

Major considerations for Councillors should a 3% tax increase be introduced include drastic cuts to the Arts and Culture portfolio, which operates the Public Art Program, Museum and Archives, as well as ending previous obligations to the Art Gallery. An increase of 7%, however, would provide the support necessary to implement the City’s Municipal Cultural Plan, as well as provide additional funds for public art projects. 

Again, the impacts of provincial decisions took centre stage as Laidman outlined the lack of provincial support for Ontario Works (OW) as well as the impending risks associated with the new provincial funding model for Children’s Services. Peterborough currently has approximately 3000 people on ODSP and OW, a figure which represents 5% of its population. 

A 3% tax rate increase would impact the amount of discretionary benefits afforded to individuals relying on these services and ultimately likely result in the closure of Directly Operated Childcare Centres in the City. 

“The cuts specifically to social services seem to target the most vulnerable in the community, specifically the working poor, who I think are already living day to day on the edge of a knife,” Councillor Matt Crowley stated. 

Later, Bierk would state that “Crowley nailed it” in his assessment of how these cuts are being proposed and focused in order to bring the City into compliance with Council’s direction at the low-end of the tax rate scale. 

“Most of these things are discretionary and most of these have grassroots impact, they affect the working class and marginalized communities, right?” Bierk said. 

Continuing to ask for clarity on the processes followed by staff, Bierk pushed for answers on how these decisions are more. When looking at other cities, he said it is obvious that they pull from the top end down towards the smaller programs. 

“There doesn’t seem to me to be a process that gives real direction that the community can understand,” Bierk said. “I definitely don’t understand it.”

Later, when reached for comment by Arthur, Bierk stated that when preparing a budget he feels that it’s important to recognize that social services can be taken for granted.

Later, in a text message he wrote that “With the absence of specific criteria, it leaves our staff without clear guidance. I believe that it is the role of Council to provide that guidance.” 

What became clear through the meetings is the fact that ultimately these decisions will be made by Council through the later stages of the budget process. Councillor Andrew Beamer, Chair of the Finance Committee, was emphatic in his insistence that ultimately any cuts will be “a political decision.”

Following CAO Jasbir Raina’s presentation, Mayor Jeff Leal introduced a motion which would direct staff to construct a budget based on a tax rate increase of 4.5%-5.5%. The motion passed 9-2 with Councillors Keith Riel and Dave Haacke voting against. 

Following the meeting, Riel told Arthur that in his estimation, suggesting that the tax rate will fall between the proposed range without accounting for the Police and Public Health budgets and their expected asks for 2024. 

“That could possibly be another 2%,” Riel said. “I want to be honest with the people.”

When asked if he had any concerns about the fact that even the high end of the guideline for staff represents just the status quo for staff’s projections for maintaining services, Riel stated that for him “this process here didn’t get down to the efficiencies that need to be done.” 

“If you’re a business person, you have to find efficiencies,” he added. “ I don’t see them [staff] taking the gloves off and getting dirty and saying this is what we absolutely need to do. We can’t do everything, but there has to be a starting point.”

Mayor Leal was also confident in the guideline’s ability to sustain the services in the community. 

“When you look through the detailed presentations that we’ve got over the past two nights, that range will allow us to do a lot of robust things here in the City of Peterborough, sustain our operations of a day-to-day basis, and make the crucial investments we need in the infrastructure, particularly renewing our road system,” Leal said following the meeting. 

When asked whether or not he considered this range to be status quo, as per the CAO and staff’s understanding of the budget, Leal said he did not. 

“From my perspective, this is not status quo,” he told Arthur. “It is an investment in the future of this community which all citizens will benefit from.”

The budget guideline set forth in the motion will be ratified by Council on August 28th.