Burlington Council Receives 2023 Budget Framework From Staff, Outlining Challenges City Faces

Council received the 2023 Budget Framework report from staff at our meeting on July 12, outlining the preliminary framework and related parameters that staff will prepare the 2023 proposed budget for consideration by the new 2022-2026 City Council that is elected on Oct. 24.The framework presented in this report outlines the principles that have been recognized by this term of Council as important policy decisions, as well as highlights the Multi-year Budget Simulation that has been developed to model tax impacts for the next 5 years.Click here for the staff report (F-25-22 2023 Budget Framework) and here for supporting documents/appendices.MY TAKE:The budget framework has opened our eyes to the challenges we face, including a number of factors outside of our control. These include the continuing revenue loss from the COVID-19 pandemic, the inflation rate sitting at 7.9%, and that we have some catching up to do because of rapid population growth. We've surpassed our growth targets 12 years early, and are now faced with the need for additional community amenities, such as parks, and service levels catching up to the population growth. We have to provide the services a growing population needs while we’re waiting for growth assessments to catch up.I think it’s important to be reminded of staff’s caution that just because a development has been approved, does not mean it gets built. We’ve seen that in Burlington. We do our job, as a City and Council, but we also rely on the industry that they do theirs.The current proposed tax rate for 2023 combined with the Halton Region and Education tax rates is at 3.4% – that is half of the inflation rate. Many councils and municipalities try to be in line with inflation -- this is half. We also have to make sure our compensation for staff remains competitive because of the tight labour market. When we invest in people, we ensure we are continuing to serve our community at the levels we all expect.

This will be a tough budget year and a lot of it is related to things out of the control of a municipality. As I do in every budget over the last 12 years, I'll also be looking for savings or deferrals, where feasible and sustainable, while building the services we need for our growing population.

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BACKGROUND/ADDITIONAL INFORMATION FROM STAFF REPORT:Financial sustainability will continue to be the City's key strategic priority. The budget will continue to face rising pressure from inflation, infrastructure renewal costs, limited revenue growth, and completion of the 4-year workplan initiatives representing visions to meet important community needs. These factors ultimately impact property taxes and reserve fund balances to maintain / enhance existing service levels and quality of life.Staff will prepare the 2023 budget taking into account the budget pressures identified in the staff report, while aligning to the city’s long-term financial plan and the important policy decisions of council. While staff have provided some mitigation options for 2023, it is important to understand that their ability to respond to urgent existing and future needs across many areas is clearly and directly tied to Council’s support for additional tax funding. It is important to note that known budgetary pressures that are deferred in the 2023 Budget will need to be incorporated into future years thus increasing the forecasted tax increases identified in the multi-year simulation for 2024 and beyond.