A $1.2-million police reserve surplus, a recent windfall, won’t lighten the load on Barrie property taxpayers this year.
It wasn’t used by city council Wednesday night to lower 2024 taxes.
Instead, council gave final approval to an operating/capital budget calling for a 4.82 per cent tax increase to homeowners, which equals $228 more this year on a typical city home assessed at $368,000.
Mayor Alex Nuttall was asked why the police reserve wasn’t used to offset this year’s tax increase, $1.2 million going into city reserves, if it’s not already there.
“There’s a policy at city hall for any of our surpluses to be split into two accounts — one is the tax-rate stabilization, which reduces taxes in future years, and the second one is the tax capital reserve, to also reduce taxes in future years,” he answered. “But we wouldn’t want the city in a position where we’re taking one-time money, being returned to the city, being then decreasing a budget which will then just increase in terms of the need for next year.
“In order to stop that kind of imbalance happening, the city has had a policy for a very long time that those two reserves are supplemented by any surpluses being returned,” Nuttall added. “It is going to be used against the tax increase, likely attached to the capital budget for next year.
"It’s one-time money, so it usually gets pushed against the capital tax.”
The 4.82 per cent is a blended increase and assumes the education portion of property taxes isn’t increasing this year. The 2023 tax bill on a similar typical home, assessed at $365,040, was $4,724. Adding $228 gives an approximate total tax bill in 2024.
Property taxes are calculated based on the Municipal Property Assessment Corporation’s (MPAC) assessed value. MPAC last did a province-wide assessment in 2016, so Barrie’s property values are significantly lower than actual 2024 market values.
The police reserve windfall came out of the blue Tuesday.
The Barrie Police Service said a recent financial review found a $1.2-million accumulated surplus that spanned several years, was no longer needed and should be returned to the city.
Police have said this reserve was unallocated and, as a result, the police services board has advised the city these funds will be returned to the municipality, and in future years, any surplus will be addressed within the same budget year.
Craig Millar, Barrie treasurer and chief financial officer, said the city’s financial policy framework has guidelines on allocating any year-end city surpluses.
Millar said the policy recommends allocating funds to capital and stabilization reserves. Through the annual year-end report, council ultimately approves how surpluses are allocated, he added. Service partner boards, such as city police, would approve how they allocate their funds.
Last December, council approved the city portion of the budget, Barrie’s annual operating and capital spending, with no tax increase. It sets levels for more than 60 services such as firefighting, snow clearing, road repairs, transit, parks and recreation and water treatment.
But there’s a two per cent tax-rate increase for infrastructure investment funding (IIF) used to replace and renew Barrie’s roads, pipes, buildings and bridges, equalling another $94.51 on that typical city home assessed at $368,000.
Councillors approved the city’s service partners budgets Jan. 24 — for Barrie Police Service, the County of Simcoe and the Barrie Public Library, along with the local health unit, conservation authorities and physician recruitment — spending that equalled another 2.82 per cent tax hike or $133.56 more, again on that typical Barrie home assessed at $368,000.
Coun. Amy Courser voted against the city portion of the budget in December, but voted for the entire budget last night.
“It’s moving forward with the process to get things done, to get things funded right now. It is where we sit,” she explained. “I do not agree with the city portion of the budget. I think that we need to be funding infrastructure … but at the end of the day, we need to get things moving forward for funding for our (service) partners.”
Police spending is budgeted at $67.5 million this year, a 6.78 per cent or almost a $4.3-million increase from last year, from $63.24 million.
There’s also $30.5 million for the County of Simcoe, $9.7 million for the Barrie Public Library, $2.2 million for the Simcoe Muskoka District Health Unit, $420,000 for the Nottawasaga Valley Conservation Authority, $370,800 for the Lake Simcoe Region Conservation Authority and $60,000 for Barrie Area Physician Recruitment.
This means a net tax-levy requirement of $110.9 million in 2024 for the service partners, an increase of $9.1 million compared to 2023’s total of $101.7 million.
Other increases in the 2024 budget are for water and sewer rates.
What’s called Barrie’s user-rate budget for water requires a 3.97 per cent annual rate increase, or $15.42 more this year for a typical Barrie home. For sewer bills the rate increase would be 4.94 per cent, or $27.61 more for a typical home.
A typical household using 180 cubic metres of water and wastewater annually will see its annual bills increase to $404.42 and $586.61 respectively this year.
The city’s 2024 capital budget totals $691 million, including previously approved funding requests of $269 million, $253 million in spending this year and $169 million in ongoing, multi-year costs.
Key capital projects in 2024 include the construction of Bryne Drive South from Harvie Road to north of Caplan Drive, building the Allandale and downtown transit mobility hubs, constructing Duckworth Street from Bell Farm Road to St. Vincent Street and the new transmission watermain and road expansion on Bayview Drive, from Little Avenue to Big Bay Point Road.
Also in the capital budget is the new waterfront 1,000 tree-planting program, spending $50,000 for 2024 and then $50,000 per year for the next nine years, to be funded from the city’s ecological offsetting reserve.
Capital spending is funded from a combination of property taxes, development charges, issuing debt, grants, user rates and reserves.
Development charges are designed to recover the capital costs associated with residential, commercial, industrial and institutional growth within a municipality from developers, so that existing residents don’t have to foot the bill for new residents.
The 2024 tax-supported base operating budget for city operations and the IIF has gross expenditures of $325.5 million and a net property tax levy requirement of $191.9 million.
And Nuttall said there’s another way to look at this year’s property tax increase.
“This budget we’re going to approve is a tax-reduction budget,” he said. “And that’s hard to believe when 4.82 per cent is where we stand.
“But the reality is last year we cancelled the stormwater fund. That stormwater fund would have been roughly $10 million last year. It would have been $10 million plus this year, roughly $11 million,” Nuttall added. “There’s $11 million built into decisions we made last year that have cut taxes this year. (That) $11 million equates to something in the neighbourhood, if I’m guessing right now … 3.5 per cent of a tax increase.”
A $3,205,000 increase, or a decrease, in city spending equals a 1.0 per cent impact on Barrie property taxes this year.
“So there’s an $11-million tax decrease built into our budget based on a decision we made last year,” he said. “So as a city, I think we’ve done a really, really, really good job at trying to balance the investments.
"Yes, we’re investing in police. I’m not going to say we’re not. We are. Yes, we’re investing in social services. Yes, we’re investing in the library. And at the same time we’re managing our costs.”
In early 2023, Barrie’s stormwater climate action fund was taken out of the city’s 2023 operating budget.
The plan was to have the owners of single-family Barrie homes pay $10.75 a month — or $129 annually — in stormwater user fees starting this spring. The average homeowner has been contributing $174 annually toward stormwater management through property taxes.
