It’s the most wonderful time of year for the Excel spreadsheet and fiscal discipline crowd: Budget Time! As with last year, this is the mayor’s budget, and his fingerprints are all over it after a directive earlier this year to shave the 2025 increase down to something around four per cent. Did City of Guelph staff do it, and what all ended up shaved in the end. Your budget season begins with this council preview!
NOTE #1: There will be no delegations at this meeting. Delegation night for the 2025 budget ratification will be on Tuesday November 19 at 6 pm.
NOTE #2: In addition to meeting in-person, this meeting will also be live-streamed on the City of Guelph’s website here.
NOTE #3: This meeting will take place at the special day and time of 9 am on Wednesday.
Mayor’s Draft 2025 Budget Update – Last year, council approved an increased net levy requirement in 2025 of $21,136,498 or 6.41 per cent, but that was too rich for the mayor’s blood. That’s why he used his Strong Mayor Powers to issue a directive to staff to bring the levy impact for 2025 down to four per cent max, which is inclusive of local boards and services that are technically provincial responsibility. For the City’s part they have achieved the mayor’s directive: Now, for 2025, the increased net levy requirement is $8,413,894 or 2.59 per cent, shaving off nearly two-thirds of what was approved for next year’s budget in 2023.
The changes between the two versions of the budget were not annotated in the agenda released by the City, but they are in the budget itself. Implementation of the Recreation, Culture and Trail Master Plans has been slowed, and so has the Guelph Transit Future Ready Action Plan. Investment in stormwater management is focused on the highest risk areas only while community outreach efforts related to environmental programs like water reduction have themselves been reduced. Also, some aspects of the Service Simplified Strategy, such as centralization of all customer service functions, will be implemented over a longer timeframe.
But it’s not all bad news for transit because the mayor directed staff to prepare a memo outlining the costs and possible funding sources to make transit free for high school students after 4 pm on weekends and all-day weekends and holidays. The operating impact would be $134,000 including an annual revenue loss of $92,000 plus $42,000 in additional staffing. Staff a proposing a one-year pilot programme paid out of the Tax Operating Contingency Reserve.
Here’s the update as framed in the form of a motion (remember that under Strong Mayor Powers council doesn’t pass the budget, but they can amend it. The amendments will stand so long as the mayor doesn’t veto):
1. An amended 2025 City operating budget inclusive of the following:
a. City service budget requirement, net of the proportionate share of assessment growth, totalling an increased net levy requirement in 2025 of $8,413,894 or 2.59 per cent over 2024, inclusive of the following:
i. Base budget increase of $7,546,432.
ii. Operating impacts from capital of $283,983.
iii. Increased growth investments of $1,625,184.
iv. A reduction of service enhancements of $67,744.
v. Service reductions totalling $3,597,391.
vi. An increase to capital financing transfers of $5,125,397.
viii. The City’s proportionate share of assessment growth revenue in the amount of $2,501,967.
b, User rates, fees and charges.
c. Total transfers to/from Reserve and Reserve Funds in 2025 in accordance with the Reserve and Reserve Fund summary.
2. The Guelph General Hospital levy in the amount of $750,000 budgeted for the fourth of six years as approved on December 3, 2019.
3. An administrative adjustment for debt funding in the amount of $1,634,000 between the City budget and Guelph Public Library budget, totalling a net zero impact to the total Guelph tax levy.
4. A 2026-2027 operating budget forecast and the 2028 inflationary budget forecast to be received as information.
5. An amended 2025 City capital budget with a net reduction of $29,705,817 from the 2025 adopted budget resulting in the gross 2025 expenditure amount of $197,451,863 with the associated operating budget required upon completion of these projects totalling $3,923,921, inclusive of funding transfers from capital reserve funds and other sources including partnerships, grants, and debt financing.
6. A 2026-2034 Capital forecast in the gross amount of $2,128,606,900.
7. Item 4 of the Mayoral direction 2024-B2 directed staff to prepare a memo outlining the costs, proposed funding sources (including sponsorship), and operational impacts of introducing a one-year pilot project for free transit for high school students after 4pm Mon-Fri and on weekends and holidays. Please find this information in Attachment-1 to this memo.
CLOSED MEETING:
Mayor’s Draft 2025 Budget Update – After the budget is presented in open session, council will go in-camera to discuss matters under Section 239(2)(d) of the Municipal Act, “regarding labour relations or employee negotiations.”
2025 Draft Budget Update Companion Report: Council Budget Decisions – There are several matters concerning the budget that are not covered by Strong Mayor Powers like rates and fees, use and changes to reserve and reserve fund policy and any additional direction to staff that’s required.
The following recommendations will be brought forward to City Council for decision at the budget meeting on November 27:
- That the 2025-2027 rates fees and charges be readopted, subject to any amendments in budget confirmation years 2026 and 2027.
- That the Development Applications Fee By-law be amended to reflect the changes in Attachment-1.
- That in accordance with the General Reserve and Reserve Fund Policy, total transfers to and from reserves and reserve funds for 2025 are approved.
- That a one-time transfer from the Library Capital reserve fund (#157) to the Infrastructure Renewal reserve fund (#150) to properly align funding and expenditures for Baker District debt servicing costs is approved.
- That Appendix A of the General Reserve and Reserve Fund Policy be amended to reflect the creation of a Housing Accelerator Fund (HAF) reserve fund (#304) and a Building Faster Fund (BFF) reserve fund (#306) in accordance with the terms and authority identified in the 2024-457 2025 Draft Budget Update Companion Report – Council Budget Decisions report, dated October 30, 2024.
- That Council acknowledges the City’s reserve strategy deployed in the 2025 budget update results in operating contingency reserve balances that continue to be below approved targets, and that staff continue to be directed to replenish these reserves as a first priority through the allocation of year- end surplus until such point that they reach a minimum of 75 per cent of target over the multi-year budget period.
- That Council acknowledges that the 10-year capital budget and forecast included in the 2025 budget update will significantly draw down the City’s capital reserve funds and rely on inter-reserve fund borrowing, and that this is expected to result in balances below policy targets at times during the budget and forecast period.
- That Council acknowledges that the 10-year capital budget and forecast included in the 2025 budget update will be supported by debt financing at the same level as the debt strategy proposed in the 2024-2027 multi-year budget, and that the projected debt levels are in excess of the credit rating agency criterion, which will likely impact the City’s future credit rating.
- That given the sustained increase in the size of the capital budget and forecast, the projected drawdown of reserve funds and increased reliance on debt, staff be directed to undertake a sustainability analysis on the overall level of tax supported capital funding, and report back to Council with any recommendations prior to the next multi-year budget cycle (2028 – 2031).
- That staff be directed to assess the long-term capital needs of the water and wastewater services, and the impact on customers of adjusting utility rates between the services to achieve a balanced capital reserve fund forecast for each service; and that proposed adjustments resulting from this assessment are presented as part of the 2026 budget confirmation process.
BUDGET TIMELINE:
October 17: Mayor’s Draft Budget Update Released
October 30: Mayor’s Draft Budget Update Presented to City Council Mayor’s
November 13-15: Mayor’s Proposed Budget Released
November 19: City Council Meeting for Public Delegations on the Mayor’s Proposed Budget
November 27: City Council Meeting to Amend the Mayor’s Proposed Budget
November 28-December 7: Mayoral Budget Vetoes
December 11 or 18: City Council Meeting to Override Mayoral Vetoes
Guelph Politico 