Latest news with #DevelopmentCharges
CTV News
10-06-2025
- Business
- CTV News
Mayor's lobbying suddenly yields $10M savings in 2026 budget from Development Charge exemptions
A letter from Ontario's Ministry of Municipal Affairs and Housing confirms that the City of London is not required to continue setting aside millions of dollars each year to offset mandatory exemptions to Development Charges (DCs). One day before an important Budget Committee meeting at City Hall, Mayor Josh Morgan said the clarification represents a permanent reduction of about $10 million from the 2026 Budget—and even more in subsequent years. 'This is the result of months and months of discussions with the Province of Ontario about municipalities' obligations under DC legislation to backfill for exemptions,' Morgan explained. Based on a philosophy that growth pays for growth, DCs are municipal fees on new construction that are intended to offset the cost of expanding services and infrastructure required by a growing city. Development Charges contribute to expanding roads, water and sewer infrastructure, community centres, firefighting, policing, and library facilities. There are exemptions for certain developments, including affordable housing and non-profit housing. Municipalities across the province, including London, have been backfilling the exemptions with property taxes and budget surpluses believing it was an obligation under the Development Charges Act (DCA). That is no longer the case. The letter from the Ministry reads, '…the DCA does not require municipalities to fund statutory and non-statutory exemptions and discounts.' According to Morgan, the savings will total $10 million in permanent savings in the 2026 municipal budget: Property Tax supported Budget: $6.4 million (0.7 per cent impact on tax rate) Water Budget: $500,000 (0.5 per cent impact on water rate) Wastewater Budget: $3.1 million (3.2 per cent impact on wastewater rate) The mayor says the province's interpretation of the Act will also avoid a looming shortfall in 2027. 'An important piece to this is future [budget] pressure that we had not budgeted for,' added the mayor. 'About $32 million of pressure within all of those [three] budgets which would have meant significant pressure of about 1.5 per cent on the property tax side, and over 5 per cent on the wastewater side.' Although property taxpayers may be off the hook for covering the exemptions, the need for service and infrastructure improvements stemming from DC-exempted developments must still be met. The mayor says money left over from exemptions in previous years will give city hall some breathing room until a longer-term funding model emerges from senior levels of government. 'There will be need for support for the DC fund and DC funded projects in the future,' Morgan acknowledged. 'That won't come this year or next year, but at some point we're going to need support. What I will say is the province of Ontario has done a really good job of actually starting to ramp up water and wastewater infrastructure spending.' Morgan said he will be including a business case in his draft budget this fall related to the DC exemption savings. The mayor has set a property tax target of below 5 per cent in 2026. The Budget Committee will receive a presentation by the mayor on June 11.
CTV News
24-04-2025
- Business
- CTV News
$58.8M budget surplus for London in 2024
London has a windfall of unspent money in the 2024 municipal operating budget even as the Council stares down another significant tax increase next year. According to a report summarizing the 2024 Property Tax Supported Budget, city hall posted a staggering $58.8-million surplus, representing 4.4 per cent of the gross budget. The 2023 operating budget surplus was $28 million. City staff recommend retaining $16.6 million in the Operating Budget Contingency Reserve, 'to fund statutory Development Charges exemptions in excess of budget.' It's recommended that the remaining $42.2 million (3.1 per cent of gross budget) be divided up according to the surplus/deficit policy: 60% contribution to the Debt Substitution Reserve Fund ($25.3 million) 3% contribution to the Community Investment Reserve Fund ($1.3 million) 17% contribution to the Unfunded Liability Reserve Fund ($7.2 million) 20% contribution to the Capital Infrastructure Gap Reserve Fund ($8.4 million) However, it will ultimately be up to city council to determine how the surplus is reallocated. A long list of programs and departments contributed to the surplus. The largest contributor ($28.8 million from Financial Management) is described as a 'surplus in provision for tax appeals & uncollectible taxes ($10.8 million) due to delay in property reassessments resulting in lower appeals and assessment at risk, investment income surplus ($10.5 million) from higher interest rates than budgeted, personnel & contingency savings ($5.7 million), and other miscellaneous factors ($1.8 million).' Other significant contributors Community and Social Support personnel savings ($1.8 million) Ontario Works net surplus ($4.2 million) due to higher than budgeted provincial funding and transition to London Regional Employment Services, Child Care net surplus ($2.9 million) primarily due to 2023 revenue adjustments Personnel savings ($3.0 million) Utility savings ($1.0 million) due to lower fuel prices Provincial Offences Act ($2.9 million) surplus primarily due to implementation of new accounting standard Higher than budgeted user fees primarily in W12A landfill ($3.3 million) The report goes on to warn, 'It is important to highlight that many of the factors driving the 2024 surplus position will not recur in 2025 or may not persist in future years.' The report also warns of significant financial impacts if the trade war with the United States impacts economic growth and the price of goods. 'Direct impacts would be in the form of increased costs of goods or services purchased by the city that are subject to tariffs. Indirect impacts, on the other hand, could be even more significant and result from changes in economic conditions,' the report reads. The Infrastructure and Corporate Services Committee will consider the report on the 2024 budget surplus on April 30.
