Kingston City Council to debate 2024 municipal capital and operating budgets

Kingston City Hall frames the supermoon in 2016. Photo by Yang Yu.

This week, members of Kingston City Council will meet to debate the Municipal Operating and Capital Budgets for 2024, as Kingston residents face a potential 3.5 per cent property tax increase, including a 1.0 per cent increase for investment in infrastructure.

In a report circulating in advance of the first night of budget deliberations — set for Monday, Jan. 15, 2024 — City staff have prepared a draft budget which includes $477 million in operating costs, in addition to a $131 million Capital Budget. 

The 2024 operating and capital budgets mark the first municipal budgets prepared under the ‘strong mayor’ powers which were handed down last year to Kingston Mayor Bryan Paterson. Under the new powers, it is the mayor who directs City staff to prepare the budget following specific parameters; he then presents the budget to the rest of Council for final approval. 

At a meeting last November, Mayor Paterson directed staff to prepare a draft annual budget for 2024 with a tax increase “that is no higher than 3.5 per cent,” which the report notes “is among the lowest of other larger cities in Ontario.” The budget was also to incorporate investments in transit, housing, and recreation, among other items. 

Now, councillors are being asked to approve 2024 gross operating expenditures of $477 million, excluding utilities, which includes funding for “housing, homelessness, emergency shelter supports, and street outreach services,” as well as the ongoing implementation of the “family physician recruitment program” which was first introduced in 2021. 

The Operating Budget also includes funding to develop “short and mid-term transit service options,” such as more park-and-ride options in the downtown core. 

In terms of support for staffing resources, the draft Operating Budget incorporates the annualization of four additional crossing guard locations, which were approved as part of the 2023 Municipal Operating Budget. As for the hiring of eight new firefighters, in order to cap the property tax increase at 3.5 per cent the budget includes an amendment to hire just four new firefighters in second quarter of 2024, with an additional four hires to come by March 2025. 

The report adds the Operating Budget is offset by “non tax revenues” of $187 million, as well as $18 million worth of “payment in lieu of taxes (PILs)” from upper levels of government. The remaining $272 million will be raised through taxation, resulting in a 3.5 per cent tax increase for local property owners. 

Meanwhile, the proposed Capital Budget of $131 million represents the City’s expenditure and funding plan to cover capital projects for the year, such as “routine asset management [and] life cycle investments.” Specific funding includes $5.9 million for “transportation-related assets,” as well as $12.6 million for municipal facilities. The Municipal Capital Budget also lists $30 million for “roads, bridges, and stormwater,” including $8.0 million of a planned $35 million investment to cover road repairs over a four-year period. 

Also included in the proposed Capital Budget is $23.8 million for “feet replacement, transit, and fire,” which includes $10.2 million to replace six Kingston Transit buses with electric vehicles.

In addition to asset management and lifecycle investments, the proposed Capital Budget also includes funding for specific capital projects, such as $9.5 million for the new Confederation Basin promenade, $7.5 million for affordable and supportive housing, and $8.6 million to acquire and service employment lands. 

With a proposed 3.5 per cent property tax increase for 2024, the staff report notes the City of Kingston’s increase is one of the lowest in the province, with the City of Ottawa the only municipality with an increase below Kingston’s, at 2.5 per cent. Staff go on to note the majority of observed municipalities have seen increases in the range of 2.5 per cent to 10.0 per cent for 2024.

In addition to the Municipal Operating and Capital Budgets, councillors are being asked to rubber stamp the 2024 Operating and Capital Budgets for municipally-owned utilities. During last year’s deliberations, members approved Municipal Utility Operating and Capital Budgets for 2023 and 2024. However, the report notes the Municipal Act, 2001 requires City Council to review and readopt these multi-year budgets each year. 

For 2024, staff are recommending the following Municipal Utility Operating Budgets, which have remained unchanged since they were last approved in 2023: 

Wastewater:

  • An operating budget of $21,231,000
  • Debt costs of $5,670,000
  • $476,000 transferred to the Facility Repair Fund through debt at 85 Lappan’s Lane
  • $14,746,000 transferred to the Wastewater Capital Reserve Fund
  • Total revenue of $42,123,000

Water:

  • An operating budget of $15,736,000
  • Debt costs of $2,064,000
  • $476,000 transferred to the Facility Repair Fund through debt at 85 Lappan’s Lane
  • $18,102,000 transferred to the Water Capital Reserve Fund
  • Total revenue of $36,379,000

Natural Gas

  • An operating budget of $5,282,000
  • $25,000,000 for commodity purchase, transportation, and storage
  • $173,000 transferred to the Facility Repair Fund through debt at 85 Lappan’s Lane
  • $4,895,000 transferred to the Gas Capital Reserve Fund
  • $2,020,000 transferred to the Municipal Capital Reserve Fund
  • Total revenue of $37,371,000

Appliance Rental Business

  • An operating budget of $824,000
  • $1,442,000 transferred to the Appliance Rental Capital Reserve Fund
  • $962,000 transferred to the Municipal Capital Reserve Fund
  • $481,000 transferred to the City Environmental Reserve Fund
  • Total revenue of $3,709,000

The report also recommends that Council approve the following Municipal Utility Capital Budget :

  • Wastewater – $19,560,310
  • Water – $24,758,810
  • Natural Gas – $7,357,700
  • Appliance Rental Business – $1,600,000
  • Total – $53,276,820

The report further recommends Council approve $53,276,820 in capital funding for the 2024 Municipal Utility Capital Budgets, as follows:

  • $18,480,310 for the Wastewater Reserve Fund
  • $1,080,000 for the Development Charges Reserve Fund – Wastewater
  • $19,258,810 for the Water Reserve Fund
  • $5,500,000 for the Development Charges Reserve Fund – Water
  • $3,857,700 for the Natural Gas Reserve Fund
  • $3,500,000 for Natural Gas – Debt
  • $1,600,000 for the Appliance Rental Reserve Fund

The draft 2024 Municipal Operating and Capital Budgets, as well as the 2024 Municipal Utility Operating and Capital Budgets, will be presented to Kingston City Council for debate beginning Monday, Jan. 15, 2024, at 6 p.m. inside Council Chambers at Kingston City Hall. Mayor Paterson will first introduce the 2024 Budget, followed by a budgetary overview by Desirée Kennedy, Chief Financial Officer and City Treasurer.

On Monday night, Council will receive presentations from the City’s external agencies, such as the Kingston Economic Development Corporation (KEDCO), Tourism Kingston, and the Kingston Frontenac Public Library, among others. After breaking for the rest of the night, councillors will reconvene on Tuesday at 6 p.m., with presentations from the CIty’s various departments taking place before the 2024 Municipal Operating and Capital Budgets are brought forward for debate.

If required, budget deliberations may spill over into a third night, tentatively scheduled for Wednesday, Jan. 17, 2024.

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