Councillors play “musical chairs” with city budget

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Good afternoon, and welcome to the Peterborough Currents newsletter.

City councillors continued hammering out the details of the 2025 municipal budget yesterday. I watched the meeting and I’ve got updates for you. I’ll cover:

• Why renters might pay for their landlords’ lower taxes
• What the 2025 tax increase is currently sitting at
• How a new user fee might reduce flood risk
• How much the police will cost taxpayers this year
• And more!

Let’s get to it.

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Councillors endorse new storm water user fee during budget deliberations

Councillors entered a city budget meeting on Monday with the goal of reducing the property tax increase proposed for 2025, which was sitting at 8 percent when the meeting started.

They succeeded — but not in a way that is likely to save ratepayers much money. That’s because the most significant reduction to property taxes that councillors approved was achieved by replacing some of those taxes with a brand new user fee.

Councillors voted unanimously to institute a new user fee to fund the city’s storm water management infrastructure. If given final approval next month, the user fee will appear on residents’ water bills starting on April 1, 2025, according to a staff report.

In previous years, the city’s storm water infrastructure has been funded through property taxes. By funding it through a user fee instead, the city can eliminate about $4 million of required tax revenue and reduce the proposed 2025 tax increase by about two percentage points.

But it won’t save homeowners any money right away. At first, the new user fee will equal the same amount the city charged in taxes last year for storm water management. Property owners will pay the same price, just on their water bill instead of their property tax bill.

“We’re just kind of playing musical chairs with the numbers,” Coun. Alex Bierk said.

Coun. Keith Riel said that it “looks good in the [news]paper” to lower the tax increase, but at the end of the day “there’s no difference” to ratepayers.

Storm water fees are “best practice,” says head of GreenUp

It might not be a money saver, but there are other reasons to support the shift to a user fee for storm water infrastructure, according to Tegan Moss, the executive director of Peterborough GreenUp. 

Moss described storm water user fees as “longstanding best practice” and said she supports the idea of implementing one in Peterborough.

“It is really important that the city adopt a mechanism to incentivize good storm water management,” Moss told Currents, pointing out that climate change is likely to increase the frequency and severity of flooding events in the coming years. “The cost of the city managing that storm water is going to continue to increase,” she said.

Moss said property owners who install rain gardens and other permeable surfaces to keep storm water on-site should be rewarded for their efforts. Properties with large buildings and lots of paved surfaces, meanwhile, should be made to pay for the larger volumes of runoff they send into the municipal storm sewers, she said.

If the user fee is calculated according to the amount of rainfall runoff a property generates, then property owners will be incentivized to install solutions to minimize that runoff.

However, that’s not how the city is proposing to structure the fee at first. The interim mechanism for calculating the new fee will link it to a property’s assessed value. The more a property is worth, the higher its associated storm water fee will be. That model won’t produce the necessary incentives, Moss pointed out.

Still, Moss said the city has to start somewhere, and she’s hopeful the fee can evolve in the future to target properties with impermeable surfaces with higher fees. She said Peterborough needs to ensure that “the cost of managing our storm water well is borne by the people who create problems with that storm water.”

Will the new fee shift costs from landlords to tenants?

One concern being raised about the new fee is that in some cases it might transfer the city’s storm water management expenses away from property owners and onto renters. That’s because the fee will appear on residents’ water bills. While property owners are the ones billed for property taxes, sometimes renters are the ones responsible for their units’ water and utility bills.

“I think this is going to result in fees that were previously paid by landlords being downloaded onto tenants, and that it will put tenancies at risk,” said Annie Hedden, the manager of the Housing Resource Centre, in an email to Currents. 

“Tenants do often pay water bills,” Hedden said. “There aren’t as many opportunities for tenants to receive financial assistance with a water bill as there are for a heating or electricity bill.”

Hedden said she can see “some broad benefits” to the idea of a storm water user fee. “But I also see some drawbacks that will have immediate negative impacts on renters, especially those who are already vulnerable. It’s effectively a rent increase,” she said.

Coun. Alex Bierk raised this concern during yesterday’s meeting. “Is there a fear that this is going to cause struggle in the community by having more renters having to pay higher cost of living?” he asked.

In response, the city’s finance commissioner Richard Freymond said that Bierk raised “a good point.” But he said the details of the new user fee will get “fleshed out” during public consultations later in 2025. 

In an emailed statement, the city’s communications director Brendan Wedley noted that in cases where a tenant’s rent includes utilities, landlords will have to pay the new fee and will continue to be constrained by provincial rent control laws. (Shortly after taking power, the Ford government eliminated rent controls on units created after November 15, 2018.)

Wedley confirmed that tenants who pay their own utility bills will be charged the new storm water fee, which he said will work out to $2.73 each month for every $100,000 of residential property assessment.

Wedley also noted that during this year’s budget deliberations city council voted to increase funding for the Housing Stability Fund, which helps eligible tenants cover rental arrears. “The majority of affordable housing units include utilities in their rent,” he added.

Details of new fee structure to be worked out later

According to the staff report proposing  the new storm water user fee, an interim rate will begin appearing on utility bills starting on April 1, 2025. 

 “It is proposed that this structure remain in place until such time that community consultation has taken place on what a more suitable charge would look like,” the report states. That consultation is expected to begin “later in 2025,” according to the report.

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Other budget developments from Monday’s meeting

Electric City Culture Council funding restored

Peterborough’s arts council will be funded next year, after all. Councillors voted yesterday to continue funding the Electric City Culture Council (EC3) in 2025, reversing a decision they made during budget meetings in November. 

Councillors voted to give the arts council $150,000 in 2025 — $100,000 for operational expenses and $50,000 to deliver programs such as Artsweek. “Our work has been validated,” EC3’s executive director Su Ditta told the Peterborough Examiner after yesterday’s vote. EC3 received $177,000 from the city in 2024.

Councillors vote down proposal to hire more bus drivers

Coun. Keith Riel brought forward a motion to hire four new bus drivers at a cost of about $350,000 during yesterday’s meeting. Riel said improving transit service is necessary to attract more riders and lower our community’s reliance on cars as a mode of transportation. “The only way that we can get the service that the people want is to hire more drivers,” Riel said. Riel’s motion failed, with only councillors Joy Lachica and Alex Bierk voting alongside him.

Currents covered Peterborough Transit and the city’s budget in more detail in November. Read reporter Brett Throop’s story here.

Police budget boost drives tax increase higher

Up until yesterday, the city’s budget documents had included a placeholder budget increase of 3 percent for the Peterborough Police, even though it was clear the police wanted significantly more than that. Yesterday, councillors approved a 7.8 percent increase to the police budget, which means the median-assessed property owner will have to pay about $865 for police services this year — up from about $800 last year.

Tax increase sits at 6.72 percent

Councillors approved several other new spending cuts and revenue-generating measures during their meeting yesterday. After it was all tallied up, the proposed tax increase sat at 6.72 percent, according to finance commissioner Richard Freymond.

The budget is expected to be considered for final approval by councillors on February 3.

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Update: This article was updated on January 21, 2024, to include a statement from the City of Peterborough’s communications director.