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Breakdown of calculations of savings and funding increases in Burlington’s 2019 budget

Photo by rawpixel on Unsplash.
Photo by rawpixel on Unsplash.

Your Council has delivered the lowest tax increase in eight years, while increasing funding for infrastructure by $2.772 million, reducing the operating budget by $622,977 and adding high value community initiatives. Council approved the 2019 Capital Budget of $96.4 million with a 10-year program of $819 million on Feb. 25, while the 2019 Operating Budget, at approximately $165 million, heads for approval at Council’s March 25 meeting.

Here’s how we added service while cutting the tax increase in the operating budget to 2.99%:

  • free transit for seniors and low-income residents;
  • three new conventional buses and six drivers to increase frequency on main routes;
  • one Handi-Van and one new driver to respond to increased demand;
  • more tree planting and park maintenance resources;
  • two new by-law officers and one additional seniors’ programming staff;
  • funds to process planning applications within the legislated time frame;
  • and more.

Here’s how we did it:
By selectively trimming capital and operating costs, reallocating resources to community-valued projects, using the surplus from 2018 before drawing on reserves, and deploying selective reserves to their stated intent. Here’s a summary of what we did during approximately 20 hours of deliberations for both the capital and operating budgets:

  1. Increased overall infrastructure funding by $2.772 million, while also reducing or deferring several projects to provide tax relief;
  2. Reduced overall operating budget by $666,977, while adding services for residents, by reallocating resources to high-value community initiatives;
  3. Funded two additional staff positions, for by-law enforcement and seniors’ programming, from Human Resources gapping, which is regularly in a surplus of $1 million or more;
  4. Funded additional planning resources to meet legislative time frames from the fee-for-service reserves intended for that purpose;
  5. Funded additional Official Plan studies, not yet undertaken, from the Policy Initiatives Reserve intended for that purpose;
  6. Funded additional one-time projects, pilot projects, items with expected future revenue or items whose full costs are unknown, amounting to $2.008 million through surplus form 2018 of $1.888 million;
  7. Drew an additional $75,000, for a total of $120,490, from the Tax Rate Stabilization Fund intended to reduce tax impact, to keep the increase to 2.99%.

MY TAKE: I’m proud of my council colleagues and city staff who worked together for this significant achievement. This budget invests in what the community has been asking for – better transit and free fares, more tree planting and bylaw enforcement, increased infrastructure funding, and more – all while attaining a city tax levy close to the rate of inflation. It took hard work, and cooperation; I’m especially proud of the respectful dialogue and courteous treatment by council members of each other, staff and residents, as we debated (and sometimes disagreed about) more than 50 motions over many hours. The community is well served by this budget.

See the full detailed calculations below

1. INCREASED INFRASTRUCTURE FUNDING:

Repurposed hospital levy:$1.7 million
Dedicated infrastructure levy:$2.001 million
Subtotal increase to infrastructure:$3.701 million
Reductions:
Reduce cost of pedestrian improvements at Elgin/Brant:– $164,000
Defer Elgin promenade to 2020, seek upper government funding:– $680,000
Fund by-law vehicle with one-time funding:– $35,000
Defer fire department drone:-$50,000
Subtotal reductions:-$929,000
Net increase to infrastructure funding:$2.772 million

2. REDUCTIONS TO OPERATING BUDGET:

Staff initiated:
Reduction to Corporate (City Manager’s) budget):– $235,000
Reduce $230K annual Randle Reef payments from base:– $100,000 (4 payments left)
Eliminate vacancy rebate (program discontinued):– $100,000
Council salary recoveries from Halton Region:– $40,983
Bill 148 impact of staff costs:– $21,994 (Subtotal: $497,977)
Council Initiated:
Eliminate balance of Randle Reef payment from base:-$130,000 (fund from reserve funds)
Increase Provincial Gas tax revenue to Operating / Draw from Tax Rate Stabilization Fund:-$264,200 / – $75,000 (respectively)
Subtotal operating budget reductions:– $967,177
Other: Keep Provincial Gas Tax in Operating (rather than transfer to Capital):– $500,000

3. INCREASES TO OPERATING BUDGET:

Provide maintenance for new BurlOak waterfront park:$67,000
Increase annual tree-planting provision:$100,000
Provide free transit for low-income residents (reduce 50% cost of Region’s low-income SPLIT pass to zero):$108,200
Increase Arts and Culture Fund:$25,000
Subtotal increases to operating budget:$300,200
NET DECREASE IN OPERATING BUDGET:– $666,977

4. USED SURPLUS – from 2018 of $1.9 million for one-time projects, pilot projects or those where cost aren’t known (See 2018 surplus retained savings report here):

Human Resources:$904,858
Investment earnings:$648,809
Winter control from mild 2018:$691,498
TOTAL 2018 SURPLUS:$1,887,510
One-time costs approved:
Integrated Transportation Plan:– $300,00
Free off-peak transit for seniors (9 a.m.-2:30 p.m. to end of 2020):– $235,800
Update tree management plan:– $100,000
Randle Reef payment:– $200,000
Fire education one-year pilot:– $35,000
Fund new Joseph Brant Museum staff for one year (report back on revenue to offset costs):– $115,000
Fund one-time costs for museum staff:– $58,000
By-law vehicles (2):– $70,000
Add top-up funding for Emerald Ash Borer, tree-planting, woodland management & Gypsy Moth spraying:– $565,000
Extend plumbing grant to flood-proof homes:– $30,000
Enterprise Management Program (This is a four-yr. $1.5M program, subject to review by council in April):– $375,000 (April 2019 portion)
Additional planning resources to meet legislative time frames:– $200,000
Additional Official Plan work:-$600,000
Draw on Tax Rate Stabilization to realize 2.99%:– $75,000
Total 2019 one-time costs funded through surplus:– $2,958,800
Total Draw on Tax Rate Stabilization for 2019:– $1,288,000

(assumes ERP at $375K and $500K to Randle Reef Reserve Fund)

5. OTHER:

New by-law officer:– $111,137
New seniors’ programming staff:– $114,463

*Both funded from expected HR surplus in 2019. HR has been in surplus every year due to staff turnover and/or retirements resulting in gapping — the time between a staff departure and a staff hire. See summary of surplus of 2014-18 here.

12 thoughts on “Breakdown of calculations of savings and funding increases in Burlington’s 2019 budget”

  1. 1. One of the items shown is Repurposed hospital levy: is this the amount that is collected from our taxes as shown on our tax bills ? Or is this on top of what is collected ?

  2. steven craig Gardner

    As I mentioned before the 2.99% seems artificial as for the first time I think things are being paid for out of reserves to get the number down to 2.99% which has been said is too high considering our rate of inflation. If we left resrves alone same levl as past years what would increase be 3.99%?

    1. I agree completely… In fact I will go farther and say that the exorbitant increases of previous years should be taken into account when calculating this year’s increase…

    2. Chuck Wightman

      If you really consider the cost of your groceries, rent, transit, etc., an honest assessment of inflation would be closer to 5 or 6 %. There is so much that is NOT included in the “official inflation rate” released by governments. The reality is, we still need to pave roads, (and in fact infrastructure is starting to get pretty crumbly in Burlington), transit is appallingly bad (it had better frequency 20+ years ago), and most government levels have too much debt. I don’t like it, but I can recognize that my taxes will likely need to grow if I’m going to honestly pay for the services I want and use.

      1. steven craig Gardner

        Not sure where you live but those things you mention are part of the inflation rate and being retired i am very well aware of costs and other than fluctuations in gas prices and housing costs to buy i am unaware of any thing i purchase regularly that went up 5 or 6 % in the past year. Perhaps 2% max. The official rate of inflation is calculated as follows: The inflation rate is calculated using the price increase of a defined product basket. This product basket contains products and services, on which the average consumer spends money throughout the year. They include expenses for groceries, clothes, rent, power, telecommunications, recreational activities and raw materials (e.g. gas, oil), as well as federal fees and taxes.

        1. Chuck Wightman

          I live in Burlington, and I am aware of how inflation is calculated, however, many economists agree that it is not a fair representation of the actual cost of living or that the basket reflects what most people buy. Just as examples: Frozen broccoli $3.49, a year ago $2.99 = 17%, ground lamb $9, was $7 = 29% (to be fair much of this is related to foreign exchange cost), a pair of basic Nike high cuts $145, was $105 = 38%, rent $1325, was $1285 = 3.1% (special approval for the 3rd year running), wage increase 1.5%. :o) Given that our currency value has dropped significantly, any imported fruits or vegetables have increased much more than the “official” rate of inflation, owing to currency depreciation.

          Regardless, Plains Road is a crumbling mess, other roads are getting rough and rugged, sidewalks are broken or underwater. Transit is less frequently than 20 years ago, and the route 2/3 run which used to be 45 minutes full circle is now 90 minutes. Some of this is congestion, but a large amount of time is wasted with buses just sitting at different points of the route. This will not entice riders. None of these things is the recipe for a desirable, functioning city.

      2. I understand, completely, the need for tax income to pay for these services…
        … however, I moved to Burlington in 2008… my Property Taxes were $3000/year… they are now $4000/year… and, really, all I see is massive congestion… condo eyesores being built all over the city… speed bumps, that DO NOT WORK… everywhere… treasured amenities closing down (i.e. Holland Park)…
        … so, for an extra $1000/year I get to sit in traffic jams all weekend… listen to contractors hammer away on their little gold mines next to my home… listen to the excessive traffic in front of my home, where there was almost none 10 years ago… get in my car to access amenities that used to be a walk away… have to use my imagination to see the view that used to be there along Lakeshore… this is not progress for Burlington… Sorry…

        1. Chuck Wightman

          A large part of your tax increase would be as a result of the value of your property going up (as taxes are calculated based on the market value of your home), not actual increases in tax rates, but I totally agree that the speed bumps are tedious, and the congestion is becoming ridiculous for a city of just under 200,000.

  3. Will the new bylaw officers be available on SUNDAYs ? I am anticipating at least 3 house renovations (maybe 4) around my home (very close proximity) this summer. We have had issues in the past with work being done outside of allowed hours. Worst of all are SUNDAYs. When we have complained, we were told to call back on Monday… What is the use ?!?!?

  4. steven craig gardner

    Can you tell us how much money is being used from reserves this year vs past council and if same amount used now as in the pst what would that mean to tax rate increase would it be 4% 5%??
    Thank you
    Craig Gardner

  5. Why exactly are a bylaw officer and senior programming staff drawing six-figure incomes? Where will this transit largesse of 3 buses and 6 drivers be deployed? Such a DRAMATIC improvement in service stills one’s breath. This is NOT EVEN CLOSE to the investment needed.

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Email:  mayor@burlington.ca

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annemarie.cumber@burlington.ca
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