City of Kingston staff explain need for capital tax increase


Content of the article

KINGSTON – City councilors have been warned not to give in to the temptation to reduce the 1% annual tax increase for infrastructure.

Content of the article

Every year, councilors hear voters asking if the tax increase is necessary, and this year, with financial pressure from the COVID-19 pandemic, the issue has become even more urgent.

City councilors are considering a 2021 budget that includes a 2.4% tax increase, of which 1% will be spent on infrastructure.

“(Taxpayers) see a tax increase of only 2.4%. We break it down, but for the person paying it, the bottom line is 2.4%, ”Pittsburgh District Coun. Ryan Boehme said.

“There is always pressure from the political side of things to bring about an increase in the cost of living. “

Kingston is one of the few cities that automatically adds one percent to property tax bills in order to raise money to pay for capital work.

City treasurer Desiree Kennedy said the tax, which has been in place for about 20 years, has enabled the city to create reserve funds from which money can be taken to pay for projects in the city. ‘fixed assets.

The one percent tax increase also funds about $ 17 million in debt repayments on the city’s existing $ 383 million debt and prepayments of interest on the $ 136 million debt that the city council approved but that has not yet been issued.

“If we stop this 1%, it means that a larger percentage of the capital budget is spent on debt repayment,” Kennedy said. “This will put us even further behind on asset management. “

The $ 136 million in approved but unissued debt includes $ 78 million for the Cataraqui Bay wastewater treatment plant, $ 30 million related to the new Cataraqui River Bridge and $ 9.5 million for a new fleet maintenance garage.

Content of the article

“These are all projects that are not asset replacement and renewal investments,” Kennedy said. “These are new projects, these are important projects for which it would make sense to issue debt on them. But everything about our asset replacement and renewal investments, we are now paying as we go. “

The city has reached a point where, funded by the 1% capital increase, it has enough money in reserve to pay for infrastructure before work begins, Kennedy said.

“The Council has reached a milestone, I think, in 2020 in our debt,” she said.

“Over the past 10 to 12 years, the City of Kingston has focused on growth and new assets. We’ve built arenas, and we’ve built community centers, and built Leon’s Center, and we’re building bridges and all kinds of things, which is good. The focus was on that, so there was less investment in asset management. “

In the coming years, Kennedy said she expects the city to redirect funds from building new infrastructure to maintaining existing assets, such as roads.

“It’s certainly part of an overall capital funding strategy,” Kennedy said, adding that current plans call for the phase-out of the capital tax increase from around 2026.

“The end is near, absolutely, I think, and I know it has been a challenge for taxpayers.”

The 2021 capital budget is “very meager,” $ 62 million, Kennedy said, including $ 37 million from reserve funds and more than $ 20 million from grants.

Almost a third of the capital budget – $ 18.3 million – is used to fund the city’s new home energy retrofit program, about 80% of which comes from loans from the Federation of Canadian Municipalities.

City council is expected to conclude its budget deliberations on Thursday evening.


Comments are closed.