2024 Budget adopted

Peterborough, ON – The City of Peterborough 2024 Budget was adopted during the City Council meeting on Monday, December 11, 2024, outlining investments in infrastructure and municipal services, including roads, policing, Transit service improvements, municipal law enforcement, and snow removal.

Through its budget deliberations in November and December, Council made a series of recommendations to reduce the all-inclusive rate to 7%.

This has been called a course correction budget, said Councillor Andrew Beamer, Council’s Finance Committee Chair, commenting on how the City has been falling behind in terms of maintaining its roads and other infrastructure as well as providing services.

“We do need to make key strategic improvements in the community to ensure that we are not falling behind and that we are moving forward,” he said. “This has to be a one-time budget situation. This can’t become the norm. We need to work together for a more manageable budget next year."

Inflationary increases and pressures on costs necessary to maintain existing service levels as well as the growing infrastructure needs for the community featured prominently in the 2024 Budget document.

The Draft 2024 Budget that was initially presented by City staff on November 6, 2023 outlined a proposed 9.59% all-inclusive rate. Council recommended several changes to whittle the number down including, but not limited to, the following:

• Increasing the tax ratio for commercial and industrial property classes to 1.65, which would shift approximately $3 million of the net tax requirement away from the residential property tax class
• Using $1.31 million from the Legacy Fund Income Reserve – revenue generated from the investment of the principal amount received from sale of Peterborough Distribution Inc. to Hydro One
• Using $200,000 from the Casino Gaming Reserve – revenue that the City receives as a host community for a casino
• Creating a new service fee for Sewer Lateral Rodding – unplugging sanitary sewer lines – on private property at a rate of $250 during business hours and $350 during evenings and weekends, which would generate an estimated $85,000 a year in revenue
• Increasing transit fares to generate an additional $100,000 in revenue
• Deferring $150,000 from the Sherbrooke Street Reconstruction Class Environmental Assessment project and making the associated reduction to the 2024 Net Tax Levy Requirement

A 7% all-inclusive rate equates to an increase of $10.17-per-month, or $122.02 for the year, per $100,000 of property assessment for the typical residential property.

The 2024 Budget includes $359 million in operating expenses, with $171.9 million from property taxes and the remainder funded by other revenues such as grants from other governments, user fees, and service charges.

On the capital side, the 2024 Budget includes almost $128 million for 147 projects, including $10 million toward the Wastewater Treatment Plant, $9.42 million for the infrastructure project on Brealey Drive between Lansdowne and Sherbrooke streets, and $5.5 million for pavement preservation work throughout the city.

The City started the 2024 Budget process in March with community consultation, including a survey and public meetings. Council held Finance Committee meetings in May and June to review information and consider input from the community. In August, Council held meetings to hear detailed breakdowns of budget implications for services and capital projects before setting a guideline for putting together the Draft 2024 Budget.

Under the new Strong Mayor Powers, Mayor Jeff Leal presented the 2024 Budget for Council's consideration on December 11, 2023. The mayor's budget incorporated all the changes recommended by Council during its deliberations.

Budget highlights

How the municipal portion of taxes is spent (cost per $100,000 of residential assessment), estimated:

24.6% goes to external organizations, including:

• Peterborough Police Service $271.47
• Peterborough Paramedics $49.39
• Peterborough Public Health $14.23
• Fairhaven Long-Term Care $12.74
• Peterborough and the Kawarthas Economic Development $7.86
• Otonabee Conservation $6.62
• Peterborough Humane Society $3.54
• Downtown Business Improvement Area $1.37
• Greater Peterborough Innovation Cluster $1.13

23.2% goes to community services, including:

• Community Services Administration $17.48
• Arts and Culture $14.06
• Recreation and Parks $43.40
• Fire Services $147.85
• Peterborough Public Library $29.11
• Social Services $96.71

21.2% goes to capital levy to finance the City’s capital/infrastructure projects, debt payments, and other financial expenditures, including:

• Capital Financing Costs $274.25
• Property Taxation Costs $18.37
• Other Revenue and Expenditures $25.84

17.5% goes to municipal operations, including:

• Office of the Commissioner Municipal Operations $2.20
• Public Works $74.40
• Transit $105.10
• Environmental Services $62.43
• Peterborough Airport $17.93

5.5% goes to finance and corporate support services, including:

• Financial Services $17.96
• Strategic Communications and Service Peterborough $7.39
• Facilities and Property Management $15.13
• Corporate Information Services $33.77
• Emergency Management $4.47
• Materials Management $4.32

4.4% goes to infrastructure, planning and growth management, including:

• Office of Infrastructure, Planning and Growth Management Commissioner $1.82
• Engineering and Capital Works $29.98
• Asset Management and Capital Planning $16.12
• Planning, Development and Urban Design $18.51
• Building Inspection and Protective Services $0

1.8% goes to legislative services, including:

• City Clerk $8.81
• Court Services -$0.67
• Municipal Law Enforcement $10.05
• Realty Services $1.25
• Legal Services $6.85

1.3% goes to chief administrative officer activities, including:

• Office of the Chief Administrative Officer $4.90
• People and Culture $14.35

0.4% goes to City Council activities, including:

• City Council $6.73

Highlights of the 2024 Budget include:

• Increases for insurance premium costs have been substantial in recent years, rising some 113% for the City during the 2020-2024 renewal periods as market conditions responded to catastrophic worldwide natural disasters. Insurance costs are expected to increase a further 10% in 2024.
• The 2024 Capital Budget includes $2.5 million of Casino Gaming Reserve Revenue to fund a portion of the capital program.
• The 2024 Budget includes an estimated $1.5 million of investment income being earned on the Legacy Fund investments from the proceeds from the sale of Peterborough Distribution Inc. assets to Hydro One.
• The 20 largest capital projects in 2024 account for $87.6 million of the City’s overall $127.7 million capital budget.
• Investments in housing and homelessness will increase by 22.5% or $5.4 million in 2024 for a total of $29.4 million. Provincial and other sources of revenue for housing and homelessness will increase by 40% or $4.6 million in 2024, resulting in a 5.7% or $347,859 increase in the net requirement to the City. Housing and Homelessness includes support for approximately 2,000 social housing units, rent supplements, the operation of four emergency shelters and winter overnight drop-in centre.
• Peterborough Transit will add six new positions in 2024, including four transit drivers that would support increased bus frequency on busy routes as a way to improve transit service.
• The City will add five new municipal law enforcement positions as it invests in a new Municipal Law Enforcement Services Division to better respond to needs related to by-law enforcement.
• The City will add four new firefighter positions in 2024 as part of a multi-year plan to improve the depth of response for Peterborough Fire Services.
• Council will pre-commit $2.39 million in the City’s 2025 Budget to implement Phase 2 of the Bonnerworth Park redevelopment project plus $250,000 in the City’s 2025 Budget to support the initial design of active transportation and related road improvements to support Bonnerworth Park enhancements.
• The City will increase its annual contribution to the Accessibility Improvements capital project to $50,000 in 2024 from the traditional $25,000 annual funding level.
• Council will defer a $200,000 renovation to a City Hall building.
• Council will remove a $200,000 project to develop a Central Area Parking Strategy, with the funding returned to the Capital Levy Reserve fund.
• The City will implement a $50,000 graffiti management pilot program.
• Council will direct that a report be presented to the Transit Liaison Committee to consider Transit fare increases and other options.
• Increasing service grants to certain community organizations by 1.5% compared to 2023 service grant amounts, which would be an increase of $43,800 from what was included in the initial Draft 2024 Budget with the additional funding coming from the General Contingency.
• Setting aside $226,021 in Reserve for physician recruitment in 2024 until a report is considered by City Council in the first quarter of 2024 about hiring a physician recruiter.

Further details on the 2024 Budget are available at peterborough.ca/budget including the budget documents, a breakdown for each program area, and a listing of the top capital projects.

Background

Tax ratios

Tax ratios are used to determine the relationship that the industrial, commercial and multi-residential tax rates have to the residential rate. Tax ratios determine how the tax burden is shared among the property classes (i.e. industrial, commercial, multi-residential, and residential).

During previous Council terms, Councils established a program to gradually shift the tax ratios over several years with the goal to reduce the industrial and commercial tax ratios, which were 2.6 and 1.84 respectively in 2008, to 1.5 times the residential tax ratio. The 1.5 tax ratio was achieved for the industrial tax class in 2021 and for the commercial tax class in 2020.

Legacy Fund Income Reserve

The Legacy Fund Income Reserve was established from the proceeds of the sale of Peterborough Distribution Inc. to Hydro One.

The $56.7 million in principal remains unspent, with 50% earmarked for City of Peterborough Holdings Inc. for a future investment. The principal has been used for investing to earn interest on the principal.

The Legacy Fund has benefited from recent successive increases in interest rates, assisting with the generation of revenue from the principal.

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