After the first week of budget deliberations, city council managed to whittle a projected 6.94 per cent tax hike down to 5.63 per cent for 2025.
Faced with a 5.04 per cent hit from external service providers like the Ontario Provincial Police (OPP) and the County of Simcoe, the city initially forecast a 1.9 per cent hike through its own operations — a figure council reduced to .59 per cent during operating budget discussions this week.
The combined hike from the OPP and the county, funding the city has no control over, is “the first time the city has seen external service partner budget pressure of this magnitude,” Melissa Gowanlock, the city’s manager of communications, told OrilliaMatters.
Despite the pressure from the OPP and the county, Mayor Don McIsaac said it’s on the city to keep the tax rate at a reasonable level.
Since the 2016 budget, the annual tax levy has not increased more than 3.86 per cent in any year.
“I mean, people have not gotten those kinds of increases in their salaries. A lot of people are on fixed income,” the mayor said. “When I look at the tax increase of 5.63, that’s Orillia — we can say it’s OPP and county, but it’s our responsibility to deal with it.”
Council had to make some creative decisions — like deferring funding slated for the city’s affordable housing reserve this year, or funding a planned community connection centre through investment profits — and McIsaac said the lowered tax hit comes without reducing levels of service or compromising on council’s priorities for the term.
“We set priorities and managed to keep the priorities we had set as council a couple of years ago, and not decrement the level of service. We did take a hard line on a couple of things that reduced it a little bit,” McIsaac said. “We’re still working on it. There’s still a couple of ideas we’re still beating around, and hopefully we can get it down some more.”
Some of the moves council made to reduce the 2025 tax hit are as follows:
- Using $665,000 from the tax rate stabilization reserve to smooth OPP increases;
- Temporarily reducing the city’s affordable housing fund contribution of $325,000;
- Saving $120,000 by changing waste diversion site hours during non-peak days; and
- Saving $75,000 by transitioning some planted/maintained gardens to pollinator-friendly gardens.
Not all members of council were thrilled with each of the changes.
The city initially projected a $325,000 contribution to its affordable housing reserve in 2025, which currently sits at about $800,000, but temporarily removed this year’s contribution to offset its tax impact — though there is potential for a year-end surplus allocation to the reserve.
Coun. Janet-Lynne Durnford said she “adamantly disagreed” with the move, but that she understood why it was made.
“We did manage to negotiate a possible top-up at the end of the year using … investment funds, but it’s dependent on the success of our investments,” she said. “I was pretty opposed to that one, but I also understand why my fellow councillors voted for it. They really wanted to get that levy down, and it’s understandable.”
She was impressed, however, with how the city managed to fund its planned community connection centre, which is meant to serve as a one-stop shop to help tackle the opioid crisis and connect community members in need to social services.
As city investments performed well this year, Coun. David Campbell suggested footing the $100,000 bill for the centre with investment funds, meaning it would have no impact on this year’s tax levy.
“Coun. David Campbell suggested that the money to support the community connection centre be drawn from that source so that there was no impact on the tax levy, and that’s what council adopted. It was a brilliant suggestion,” Durnford said.
For the community connection centre, which has been in the works for more than a year, the city has also applied for federal grant funding, which Durnford is “very optimistic” the city will receive.
Budget deliberations continue next week, with council discussing capital projects for the new year on Nov. 12 and 13. Budget ratification is scheduled for Dec. 9.
