Inflation, supply chain, labour markets and economic uncertainty emerge as new themes ahead of the City’s first budget confirmation
Guelph, Ont., January 12, 2023 – Today, the City of Guelph released its 2023 budget update with a proposed tax levy increase of 4.96 per cent, 0.21 per cent lower than the rate of 5.17 per cent previously approved by Council for 2023 as part of the 2022-2023 Multi-Year Budget.
The proposed 4.96 per cent tax levy increase represents increases related to City investment of 2.97 per cent, 0.28 per cent for legislative impacts resulting from Bill 109 and Bill 23, and local boards and shared services investment of 1.71 per cent. The average household, with a residential property assessed at $406,000 is estimated to cost $4,392.25 in property taxes in 2023 based on the proposed budget update. This is an increase of approximately $207.56 over 2022, or $17.29 per month.
The proposed 2023 user fees and rates for water, wastewater and stormwater continue to be recommended as approved for 2023 in the 2022-2023 Multi-Year Budget, equivalent to 2.73 per cent over 2022, with an estimated annual average residential bill impact of $26.54, or $2.21 per month.
The release of the budget update is a first for the City as it continues to execute its inaugural, Council-approved 2022-2023 Multi-Year Budget. Council will now readopt the 2023 budget through a review, update and final confirmation at a special Council meeting on January 25 with open session beginning at 9:30 a.m.
“The budget confirmation is a pulse check done each year after a full multi-year budget is approved. It provides the City and Council with the opportunity to review what was planned and work in an agile and flexible way to adjust for the current environment,” says Trevor Lee, deputy chief administrative officer, Corporate Services.
“A multi-year budget gives Council a long-range view to better manage budget pressures over the approved budget period, in this case, 2022-2023, so that our community doesn’t have to deal with spikes in costs,” explains Shanna O’Dwyer, acting treasurer and Finance general manager. “Our strong reserve position and AAA S&P credit rating provide the City with the means to manage unexpected changes within a given year, like legislative impacts and high inflation, to help balance affordability and progress as necessary.”
Five underlying themes emerged during the development of the 2022-2023 Multi-Year Budget: pace and capacity, COVID-19, modernizing and transforming service delivery, energy and climate change, and legislative impacts. These themes continued to influence the 2023 budget update, with four additional themes emerging in 2022: inflationary pressures, supply chain challenges, competitive labour markets, and potential economic uncertainty in 2023.
Operating and capital budgets
“The budget update we’re presenting confirms the resources needed to deliver the City’s programs, services, and initiatives to the community in 2023. The City prioritized its capital projects to mitigate inflationary pressures and address pace and capacity constraints, in alignment with the Inflationary Financial Impact Strategy approved by Council in April 2022. However, pressures are also being felt on the operating budget and cannot be ignored,” says O’Dwyer.
The 2023 budget update that staff is presenting to Council includes the non-tax operating (e.g., water, wastewater and stormwater fees), tax-supported operating, capital, and local boards and shared services budgets as one single budget regardless of the funding source or which City department manages the service.
Following a thorough review of the 2023 approved budget based on the City’s approved Budget Policy, staff is recommending that the 2023 operating budget update of $508.6 million be confirmed. The budget update incorporates in-year Council approvals, legislative impacts, accelerated expansion of resources for Guelph-Wellington Paramedic Services, a slowdown of the phase-in for the South End Community Centre and Baker District operating impacts, and updated assessment growth revenue.
Staff are proposing a strategy for 2023 that leverages offsetting economic conditions by deferring permanent adjustments to operating budgets for increasing costs from inflation and supply chain challenges using temporary operating surpluses stemming from competitive labour markets and increased revenues associated with rising interest rates. This allows the City and Council more time to assess which of these conditions are temporary in nature and which may have long-term impacts. The City’s projected 2022 surplus will provide a source of funds to bolster contingency reserves and position the City well to face the challenges ahead.
In April 2022, staff began a holistic review of the approved 2022 and 2023 capital budgets to prioritize projects to address inflation and pace and capacity issues. The capital project prioritization resulted in a $38.8 million net decrease in the previously approved 2023 capital budget. The updated 2023 capital budget for confirmation is $123.2 million. The focus of planned capital investments for 2023 remains consistent with what was approved in the 2022-2023 Multi-Year Budget; however, the level and timing of investments have been adjusted.
Further details on the recommended 2023 operating budget, including local boards and shared services, and capital budgets can be found in the 2023 Budget Confirmation and Capital Budget Prioritization report to Council and at guelph.ca/budget.
Dates to remember
January 25 is the 2023 budget update presentation to Council and the public along with delegations and deliberations. Formal 2023 budget confirmation is expected by the end of the January 25 special Council meeting. At the same meeting, Council will receive 2024 to 2025 operating, 2026 inflationary and 2024 to 2031 capital forecasts.
Provide feedback to councillors
City councillors are always interested in hearing feedback from residents. A list of City Councillors by ward and an interactive ward map to help determine what ward taxpayers are in is available on guelph.ca/city-council.
Public delegation night
Residents can address Council about the budget through a written submission remotely by video or phone, or in person at the January 25 special Council meeting. Please register as a delegate, or make a submission by 10 a.m. on January 20 using the online delegate request form, contacting the City Clerk’s office at 519-837-5603 or emailing [email protected].
View the approved 2022-2023 Multi-Year Budget.
Read the 2023 budget update report to Council or visit guelph.ca/budget.
New this year on the budget website are three educational videos related to the budget process:
As always, the public can read questions posed by Council and staff’s answers on the online budget board.
Follow the City’s budget updates at guelph.ca/budget, on Twitter (@cityofguelph, #GuelphBudget) and on Facebook (@cityofguelph). Residents wanting to know more about the budget can email [email protected].
Watch the special Council meeting for the 2023 budget confirmation (presentation, delegations and deliberation) live at guelph.ca/live.
Shanna O’Dwyer, Treasurer and Acting General Manager, Finance
City of Guelph
519-822-1260 extension 2300