The municipality’s chief monetary officer says many of the cash from reserves is coming from capital reserves — cash put aside for main constructing tasks deferred due to the COVID-19 pandemic.
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The Metropolis of Ottawa’s reserve funds are dwindling, however they aren’t getting used to maintain taxes low artificially, its chief monetary officer says.
“Sure, the reserves are taking place, however under no circumstances are they getting used as a subsidy for the tax levy, they usually’re precisely the place we had been planning them to be,” Cyril Rogers informed councillors on town’s finance and company providers committee on Tuesday.
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Critics of Ottawa’s $4.6-billion draft funds, which is to be debated and voted by council on Wednesday, say that it’s too austere and that council’s route to cap the tax improve at 2.5 per cent is unrealistic.
Neil Saravanamuttoo, an economist and director of the non-profit city advocacy group CitySHAPES, claimed in a latest weblog submit that Mayor Mark Sutcliffe had drained one-third of Ottawa’s complete reserve funds in his first two years in workplace.
“When Sutcliffe got here to workplace firstly of 2023, the Metropolis of Ottawa reserves stood at $663 million. By the top of 2024, they are going to be all the way down to $436 million. He’s draining $227 million from reserves,” Saravanamuttoo wrote.
“The Mayor’s ‘simple’ budgets are coming to an finish,” Saravanamuttoo wrote, saying subsequent yr the mayor must reduce providers, increase taxes or drain reserves “till the cabinet is totally naked.”
Saravanamuttoo labored on the marketing campaign of former metropolis councillor Catherine McKenney, founding father of CitySHAPES, who completed second inlast yr’s mayoral election behind Sutcliffe.
Whereas Rogers acknowledges town’s reserves are being depleted, most of that cash is coming from capital reserves — cash put aside for main constructing tasks which were deferred due to the COVID-19 pandemic. Town has been planning for this and has constructed up these reserves over the previous a number of years, he mentioned.
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“We at the moment are at a degree the place we’re releasing these funds, getting again on monitor from the capital deferrals … That’s what this funds does in 2023.”
Ought to it’s permitted, Ottawa’s 2.5-per-cent tax levy improve can be effectively under what residents of many different cities can pay this yr.
London, Ont., is anticipated to lift taxes between 3.0 and three.4 per cent, whereas Calgary’s 1.4 million residents can pay a whopping 7.8 per cent extra in taxes in 2024. Mentioned Calgary Mayor Jyoti Gondek: “We didn’t make a well-liked choice. We made the appropriate one.”
Toronto’s funds deliberations gained’t start till the brand new yr, however final yr that metropolis raised taxes by 5.5 per cent.
Sutcliffe promised in his election platform to carry tax will increase to 2.5 per cent or much less for no less than his first two years in workplace, however the short-term frugality would possibly imply long-term ache.
Whereas Ottawa police met the two.5-per-cent goal this yr, Chief Eric Stubbs warned that the service’s three-year strategic plan, which requires 550 new staff, together with 435 uniformed officers, would price extra.
“The primary yr, the hiring we’re in a position to will we’re in a position to meet that plan with the funds tips this yr,” Stubbs informed reporters final week. “Nevertheless, in Yr 2 and Yr 3, it does get costlier and we’d be needing extra of a share improve to be assembly the hiring objectives of that plan.”
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OC Transpo continues to bleed cash, with ridership caught at about 70 per cent of pre-pandemic ranges. The transit fee dipped into reserves for $12.7 million to stability the books, a transfer that on the time Rogers conceded was “unsustainable.”
By the top of 2023, OC Transpo’s working reserves will probably be round $3 million to three.4 million, under the optimum degree of between $4 million and $4.5 million, Rogers informed councillors Tuesday.
“However we’ve communicated that. We’ve talked in regards to the threat in transit and the work we have now to do to resolve that.”
Transit fares are to rise 2.5 per cent on Jan. 1, and OC Transpo can also be altering many bus routes — one thing it insists is a realignment in preparation for the anticipated begin of Trillium Line LRT service within the spring, however which many riders see merely as service cuts.
For Sam Hersh of the grassroots advocacy group Horizon Ottawa, the promise to cap the tax improve at 2.5 per cent harms town and its most weak residents.
“I perceive this promise was made, nevertheless it was an unrealistic promise” Hersh mentioned.
“If you make life extra inexpensive for some, you make it much less inexpensive for others. Elevating person charges, elevating transit fares — it’s making life costlier elsewhere.”
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