The city’s top official has put a hold on new capital projects and staff hiring in response to a mayoral order to bring down next year’s property tax increase to four per cent or less.
In an email to senior city staff on March 7, CAO Scott Stewart wrote that “effectively immediately” any capital projects planned for this year that come with operating costs for 2025 and have not yet begun are paused until they can be fully reviewed.
Additionally, new staff hires scheduled for this year have been paused unless they are “absolutely required” to advance housing in the city or come with a net-zero budget impact. The pause is for new positions, not pre-existing or seasonal positions.
“It’s really just what’s expected of us to do,” Stewart told GuelphToday, confirming major details of the email. He went on to explain it would go against the mayor’s order to commit to projects that come with operating cost increases at a time when the objective is to reduce spending.
“We’re just starting the ball rolling,” he added in reference to identifying capital projects and the filling of staff positions that can wait or potentially be eliminated.
As work on the new central library and South End Community Centre have already begun, those projects won’t be considered for pausing.
“We’re going to need to have some tough conversations and make some very difficult decisions as the city’s share of the needed reduction is $15.5 million,” Stewart’s email states. “These (pauses) are not easy decisions to make, and I assure you that they were not made hastily. However, to deliver on the mayoral direction it’s crucial that, as a city, we look at every option possible.”
On Feb. 28, Mayor Cam Guthrie issued an order under the so-called strong mayor powers instructing city staff to lower the currently set 9.79 per cent property tax increase for 2025 to four per cent or less.
During the budget process late last year, covering 2024 through 2027, next year’s property tax increase was set at 9.79 per cent. Yearly confirmation is required and may include amendments.
The mayor’s order provides no direction as to how that $15.5 million spending reduction/revenue increase is to be achieved, though budget alterations are to come with a list of the changes made when publicly released this fall.
“We need to do everything possible immediately to not enter into contracts/procurements that will commit us to 2025 budget impacts – it will only make our work more difficult,” Steward wrote of realizing the ordered tax increase reduction.
The CAO notes senior city staff are set to meet next Tuesday to “put our heads together so that we can gain clear direction of the city’s priorities” in advance of the budget confirmation process.
A special work and tactic decision committee, led by finance staff, has been established to spearhead the effort.
