Quinte West Council has started the process on building their 2024 capital budget.
The process started with a special meeting of council on Wednesday night, with council hearing from several members of city staff who presented information about the current state of Quinte West’s finances.
Several challenges faced council members and staff as they worked on the upcoming budget, including a loss of purchasing power over time. Staff noted that the municipality had 5% less purchasing power with the same funds now as it did in 2020.
The reduced purchasing power is a consequence of rising prices and inflation.
Another challenge identified by staff is rising construction costs for non-residential purposes, such as roadways. In the second quarter of 2023, construction costs went up 7%.
Most of Quinte West’s partner organizations who receive funding from Quinte West are also requesting additional funds for 2024.
Quinte West is also facing reduced income from some sources. The Ontario Community Infrastucture Fund will provide $6.4 million in funding for 2024, which is over a million less than it did in 2023.
Councillors asked staff about some potential ways to increase the available budget, such as increasing development fees or taking on more debt to fund projects. Some councillors proposed their own ideas for how to address potential budget shortfalls.
Councillor Zach Card suggested limiting development in areas that would require expensive infrastructure to avoid increasing debt.
“What scares me the most is kind of the long term debt driver, the water and wastewater growth projects,” said Councillor Card.
Councillor David McCue suggested expanding industrial development in the city as a way to increase tax income.
“We need more money, we got to figure where it comes from. Industrial-wise for a tax base, we really are not growing as a city. Maybe it’s time we looked at something like that along the 401 corridor,” said Councillor McCue. “Industrial taxes would go a long way to paying our bills and keeping the household taxes in line.”
The amount of development fees the municipality can charge has been limited by Bill 23, the More Homes Built Faster Act, which was brought up by councillors as one of the contributing factors to how tight the budget has become.
Councillor Shelley Stedall said that unless the province picks up the slack caused by the reduction in development fees, they might have to increase taxes to compensate.
“The province promised to make us whole. So while they implemented Bill 23 to try to promote that houses would get built faster and that they could be sold at a lower range, they also promised that they were going to make municipalities whole and they haven’t come forward with that plan at this point in time,” said Councillor Stedall.
Council passed a motion to send a letter to the province about the impact Bill 23 has had on the budget.
The budgeting process will continue in a pair of special council meetings on December 6 and 7.
