FEDCO looks at increasing 2021 rural tax bill by $88

CITY HALL – The city’s Finance and Economic Development committee (FEDCO) approved the 2021 budget directions and timelines to develop the draft budget, including the consultation process today (Oct. 6).

“The draft budget would include an overall increase of three per cent to the municipal tax rate,” city staff released in a statement. “The average urban homeowner would pay an additional $115 on their annual property tax bill, while the average rural homeowner would pay an additional $88.”

The municipal tax bill is made up of several levies and the report recommends the city-wide levy – the portion that funds most city services, including the Ottawa Public Library and Ottawa Public Health – increase by 2.5 per cent. The Transit Levy would increase by 4.6 per cent, which includes a $5 million contribution to capital to replace the cancelled doubling of the provincial gas tax.

The draft budget would be tabled at a special meeting of Council on Wednesday, Nov. 4, followed by public meetings throughout the following month before the budget is adopted by council on Wednesday, Dec. 9.

Meeting dates are available at ottawa.ca, along with information about how residents can provide feedback on the 2021 draft budget. 

 FEDCO also received a second-quarter status report on the 2020 budget along with a year-end budget forecast.

“Based on current projections, the city’s cash flow position is stable, but a potential resurgence of the pandemic could worsen the deficit forecast and the city’s cash flow position,” staff said. “COVID-19 has put financial pressure on the city, and while financial mitigation strategies are in place, the city still projects a deficit in 2020.”

As of June 30, tax-supported programs show a deficit of $30.2 million, while rate-supported programs show a surplus of $2 million. For the remainder of 2020, the city projects a deficit of $59.6 million for tax-supported programs as a result of the pandemic.

In August, the City received $49.3 million in funding from the province as part of the first round of emergency funding under the Safe Restart Agreement with the federal government. The current budget forecast estimates the city’s COVID costs and pressures for 2020 will exceed that first phase of funding by $10.2 million. FEDCO approved direction to apply for phase-two funding in October.

This report also includes proposed financial mitigation strategies for tax-supported services to address pandemic-related budget deficits. The committee approved deferring 33 capital projects to 2021 or later. This would return $42.6 million to various capital reserves and help address some funding gaps in 2020 if funding from senior levels of government is not provided.

The committee received an update on the city’s 2019-2022 Strategic Plan and its approved council priorities.

“There are anticipated impacts to some timelines, scope and budgets as a result of the need to divert staff resources and adapt services in response to COVID-19,” staff said.

The City plans to move forward with the Stonebridge community’s request to retain green space in the area after FEDCO approved a special area levy to purchase the Stonebridge Golf Course from Mattamy Homes. The levy would raise $7 million, with $6 million going to Mattamy Homes for the land and $1 million paying for the legal fees, a land-transfer tax and additional costs.

Based on a vote earlier this year, the community supports the plan to purchase the land. Area property owners would each pay an additional $166 to $460 on their annual property tax bills, based on their property value, for the next nine years. Mattamy Homes would run the golf course until 2029, at which point the city would either offer the community a long-term lease for a nominal amount so they could run the golf course or turn the land into public green space.

Recommendations from today’s meeting will rise to council on Wednesday, Oct. 14.

For more information on city programs and services, visit ottawa.ca or call 311 (TTY: 613-580-2401).