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FAQ

Frequently Asked Questions


Strategic Plan

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  • What is London’s Strategic Plan?

    The 2015-19 Strategic Plan for the City of London sets our direction for the future. It identifies Council's Vision, Mission, Values, Strategic Areas of Focus and the specific strategies that define how Council and Administration will respond to the needs and aspirations of Londoners.

    City Council reports to Londoners on the implementation of the Strategic Plan on a semi-annual basis. See the May 2018 Semi-Annual Progress Report to track the progress that has been made towards every strategy in the Strategic Plan, or launch the Strategic Plan Dashboard for an overview of progress made towards each Strategic Area of Focus.

    For an illustrated explanation, check out the City of London’s finance flick - How Your Multi-Year Budget Works.

  • How does a Strategic Plan link to the City’s Multi-Year Budget?

    When a new Council is elected for a four-year term one of the first orders of business is to develop a Strategic Plan. This plan identifies Council’s vision, mission, values and strategic areas of focus for their term in office. Most importantly it identifies the specific strategies Council will fund and deliver over their term. It is through the Multi-Year Budget that the Strategic Plan is put into action.

    For an illustrated explanation, check out the City of London’s finance flick - How Your Multi-Year Budget Works.

Multi-Year Budget

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  • What is a multi-year budget?

    The Municipal Act, 2001 authorizes a municipality to prepare and adopt a budget covering a period of two to five years.  The City of London has chosen to utilize a four year period.  Rather than approving a budget annually, Council approves budgets for the next four years, subject to annual re-adoption, to establish funding for as many strategic initiatives as possible to support the Strategic Plan.  The last year of the multi-year budget is subject to reconfirmation by the new term of Council, also ensuring any changes are linked to the Strategic Plan.

    For an illustrated explanation, check out the City of London’s finance flick - How Your Multi-Year Budget Works.

  • How does the multi-year budget align with the term of Council?

    A new term of Council is elected in the fall of year 3 of the multi-year budget. Early the next year, they approve the annual budget update for year 4 of the previously approved four year (multi-year) budget.  That gives the new Council time to determine their Strategic Plan for the next four years.  Later that same year, Council approves the next four year (multi-year) budget.  The same Council approves the annual budget updates for years 2 and 3 of that multi-year budget and then the cycle starts again.

     

    For an illustrated explanation, check out the City of London’s finance flick - How Your Multi-Year Budget Works.

  • Why did the City move to a multi-year budget process?

    The City of London decided to complete a multi-year budget every four years to better align Council’s Strategic Plan with the City’s budget.  Linking Council’s Strategic Plan to the Multi-Year Budget better aligns longer-term goals and objectives with longer-term funding plans.

    For an illustrated explanation, check out the City of London’s finance flick - How Your Multi-Year Budget Works.

  • What are the benefits of a multi-year budget?

    Benefits of a multi-year budget:

    • Provides accountability between funding plans and cost of services to Londoners
    • Better aligns longer-term goals and objectives with longer-term funding plans
    • Provides greater certainty to residents about the future direction of their taxes
    • More efficient use of time and resources as the organization is not constantly preparing budgets

    For an illustrated explanation, check out the City of London’s finance flick - How Your Multi-Year Budget Works.

  • What is an annual budget update to a multi-year budget?

    An important element of the multi-year budget is the annual budget update process.

    It is required under the Municipal Act, 2001. Council must readopt the budget for that year and each subsequent year that the multi-year budget applies.

    Annual budget updates provide Council the opportunity to change the budget for special circumstances that require funding and resource adjustments. This can be done by one of three types of budget amendments: New or Changed Regulation, New Council Direction, and/or Cost or Revenue Driver.

    New or Changed Regulation

    A new or changed legislation or regulation with a financial impact to the municipality

    New Council Direction

    A new Council direction that has transpired after the approval of the multi-year budget

    Cost or Revenue Driver

    A corporate or service area budget shortfall as a result of changes in economic conditions

    For an illustrated explanation, check out the City of London’s finance flick - How Your Multi-Year Budget Works.

  • What is the operating budget?

    The operating budget outlines the City's spending plan to implement Council's goals and priorities. It is based upon service area day-to-day operations of programs and services, such as the cost of water supply and wastewater collection and treatment, transit, garbage collection and disposal, recycling, parks, arenas, recreation programs, road maintenance, libraries, policing and public health services. Examples of operating expenses include, salaries and wages, insurance, supplies, fuel and utilities. Contributions to capital reserve funds and debt servicing payments are also made from the operating budget.

    For an illustrated explanation, check out the City of London’s finance flick - Budget Basics.

  • What are the City’s operating funding sources?

    The majority of the City’s operating budget is funded through property tax revenue. Other City funding sources consist of user fees, grants/subsidies, transfers from contingency reserves and other revenues such as investment income and fines/penalties. Although these other revenue streams are vital to providing services, they are very limited in nature and frequently restricted by legislative requirements and market conditions.

    For an illustrated explanation, check out the City of London’s finance flick - Budget Basics.

  • What is the capital budget?

    The capital budget outlines the City's capital expenditure plan and related funding for assets and related programs, such as water and sewer infrastructure, roads, arenas and parks, which will provide or support services to residents over many years.  This budget pays for all new investments or rehabilitation of assets currently under the City’s control.  Examples of capital expenses include roads, bridges, parks, trails, community centres, sewers and watermains. Within the capital budget and plan, there are three classifications for capital projects: lifecycle renewal, growth and service improvement.

    For an illustrated explanation, check out the City of London’s finance flick - Budget Basics.

  • What are the funding sources for capital projects?

    Funding sources for capital projects include:

    • Capital Levy
    • Development charges
    • Other government funding
    • Reserves and reserve funds, subject to adequate balances
    • Debt financing, provided that all other funding sources are exhausted

    For an illustrated explanation, check out the City of London’s finance flick - Budget Basics.

  • How does the City determine how much they need to raise in taxes?

    A municipality determines its budget requirements each year.  The City adds up all the expenditures required for the operating and capital budget, and then determines how much funding is available from other levels of government, reserves and user fees.  The remainder is to be funded from tax revenue raised through the tax levy.  The tax levy and corresponding municipal tax bill is distributed amongst the various properties and property classes of the City, as per the tax policy.  

    For further information on the link between the City’s budget and your property taxes, see the Property Taxes section of these FAQs. 

    For an illustrated explanation, check out the City of London’s finance flicks - How Your Multi-Year Budget Works, Budget Basics and How Your Property Tax is Calculated.

  • What is the property tax policy?

    The property tax policy in the City of London is guided by four principles as follows:

    • Equity—fairness amongst property classifications
    • Economic Development—advancements or improvements in the economy resulting from growth or changes
    • Transparency and Public Acceptance—openness, communication and accountability, and public support of the objective
    • Administrative Efficiency—the capacity of the organization to produce desired results with minimum expenditure of energy, time, money, personnel, material, etc.

    Every year as part of its tax policy review, the City of London reviews its tax ratios and compares them to other municipalities in the Province to ensure they are equitable (i.e. fair and impartial), competitive (i.e. as good as or better than others) and contributing to economic development.

    For further information, review the Property Taxation Policy Section of the City’s Consolidated Financial Report and also see the City’s Property Tax website.

  • What are tax ratios?

    A major component of property tax policy in Ontario is the annual setting of tax ratios for property classes by Municipal Councils.  Tax ratios determine the relative tax level for the various property classes within a municipality, such as residential, multi-residential, commercial, industrial, etc.

    For further information, review the Property Taxation Policy Section of the City’s Consolidated Financial Report and also see the City’s Property Tax website.

  • How has the City of London set tax ratios?

    As part of its annual tax policy review, the City continues to monitor its tax ratios in all classes and all its other policies related to taxation to ensure that property taxation in the City is equitable, conducive to economic development, transparent to the public and administratively efficient.

    Prior to 2016, an objective to lower and equalize the tax ratios for multi-residential and industrial properties to a level equal to the commercial property class was progressively achieved.  The purpose of these changes had been to promote economic development in the industrial and multi-residential property classes and enhance equity in these property classes relative to the commercial class.

    In 2017, the City further adopted a policy of equalizing municipal tax increases in the multi-residential and the residential classes.  This policy was continued in 2018. 

    For 2018 there will be no tax mitigation in the industrial and multi-residential property tax system and only a very few properties will have tax increases capped in the commercial property class. No properties will have tax decreases clawed back in any property class in 2018.  The ending of the tax mitigation required by the Provincial Government will simplify the calculation of property taxes and will enhance equity and transparency in the property tax system in London.

    For further information, review the Property Taxation Policy Section of the City’s Consolidated Financial Report and also see the City’s Property Tax website.

  • What are Development Charges?

    Development charges are fees collected by the municipality for the recovery of growth costs.  These fees are not part of the annual tax levy but rather are fees paid by individuals or entities looking to construct new buildings, expand buildings or convert buildings for a different use. 

    For an illustrated explanation, check out the City of London’s finance flick - The World Of Development Charges.

  • What is Assessment Growth?

    Assessment growth funding comes from taxes levied on new or expanded homes and businesses.  The new tax revenue generated from assessment growth is used to fund the extension of the City’s operating budget associated with the additional volume of municipal services required for these new or expanded homes and businesses.

    For an illustrated explanation, check out the City of London’s finance flick - What is Assessment Growth?

Property Taxes

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  • How is property tax determined?

    A number of factors go into determining your annual property tax amount:

    • The annual budget for City services such as police, fire and ambulance service, roads, sidewalks, transit, parks, trails, museums, recreation centres, libraries, and all City programs and services;
    • Provincial taxes (to fund education – determined by the Province); and,
    • Your property value which is assessed every four years by the Municipal Property Assessment Corporation (MPAC).

    For more information on property taxes, visit our City of London Property Tax website.

    For an illustrated explanation, check out the City of London’s finance flicks - Budget Basics and How Your Property Tax is Calculated.

  • How are municipal tax dollars spent?

    Tax revenue is used to fund municipal services such as police and fire services, garbage pickup, snow plowing, roadways, transit, parks, recreation centres, libraries and other City programs and events. 

    A full breakdown of how the current year’s municipal portion of property taxes is spent is available at How the Municipal Portion of Your Property Tax is Spent.

  • What affect does the approved annual budget increase (tax-supported budget) have on my residential property taxes?

    The Council approved increase to the City’s tax-supported budget does not cause an equivalent increase in residential property taxes.  At the bottom of your annual tax bill you will see a breakdown of the increase in your taxes compared to the prior year.  This amount includes the current year local municipal levy change (the portion effected by an approved budget increase), the current year provincial education levy change and the current year tax change due to property reassessment (the new value of an individual’s property). 

    For an illustrated explanation, check out the City of London’s finance flicks - Budget Basics and How Your Property Tax is Calculated.

  • Property owners were advised of reassessed market values of their properties in November 2016 by the Municipal Property Assessment Corporation (MPAC). What affect does this have on my residential property taxes?

    The 2016 market values are phased in over four years – 2017 to 2020.  This phased-in assessment on your property will cause a change to the residential property taxes you are charged by changing the base amount against which the property tax rate is calculated. 

    Reassessments have no impact on the total property tax amount a municipality raises.  In other words, the City of London does not get one more dollar from the MPAC property reassessment. Property reassessment is a redistribution of who pays the municipal tax bill based on the value of the property owned - it has no effect on the overall tax amount collected.

    For more information on property taxes, visit our City of London Property Tax website.

    For an illustrated explanation, check out the City of London’s finance flick - How Your Property Tax is Calculated.

  • How are property reassessments related to the annual tax rate and the residential property taxes I pay?

    As determined by MPAC, there is an average increase to London’s residential property assessment values overall that will be phased-in over four years.  This average increase is related only to the base values that property taxes are calculated on. 

    A municipality determines its budget requirements each year.  If the average assessment value for properties increases and the budgeted funding for City services does not require the increase in tax revenue, the tax rate decreases to keep the same amount of property tax levy. 

    For example, the total 2018 tax rate (1.350819%%) which includes both municipal and education portions, is slightly less than that of 2017 (1.360444%) as a result of the tax revenue generated from the 2018 increased property assessment values being over and above what is required to fund City services for the year.  

    On an individual level, most residential property owners will experience a tax amount change either above or below the average tax level increase depending on whether the phased-in reassessment of their property’s value changed more or less than the average residential property assessment increase.

    For more information on property taxes, visit our City of London Property Tax website.

    For an illustrated explanation, check out the City of London’s finance flick - How Your Property Tax is Calculated.

    Important Notes:

    • Reassessments have no impact on the total property tax amount a municipality raises.
    • Reassessments only affect the way the tax levy is allocated amongst the various properties and property classes.
  • Is there information available for other property tax related matters?

    Visit the City of London’s Property Tax website to gain further access to property tax related information such as property assessments, how property taxes are calculated, payment options available, etc.

    For an illustrated explanation, check out the City of London’s finance flick - How Your Property Tax is Calculated.

Fiscal Responsibility

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  • What are the City’s key priorities?

    The 2015-2019 Strategic Plan contains strategies that will, when implemented, achieve the long-term vision for the City of London.  Through this plan, Council will be able to ensure that its priorities are achieved within the financial parameters Council establishes during its term.   

    The 2015-2019 Strategic Plan identifies City Council’s vision, mission, values and strategic areas of focus; which include:

    • Strengthening Our Community
    • Building a Sustainable City
    • Growing Our Economy
    • Leading in Public Service
  • How does the City ensure financial sustainability?

    The City demonstrates its commitment to financial sustainability through the following actions:

    • Developing the City’s Strategic Plan to guide investment decisions and promote transparency.
    • Developing the four year Multi-Year Budget that links to Council’s Strategic Plan to service delivery.
    • Conducting process reviews on service programs during the multi-year budget period to identify opportunities for continuous improvement and potential savings in order to achieve greater efficiencies from existing and new programs.   
    • Maintaining core financial policies that form part of the City’s Strategic Financial Plan including commitment to pay-as-you-go and building reserve funds to fund the City’s capital plan and reduce the impact on property owners. 
    • By maintaining London’s Aaa credit rating for 41 consecutive years which enables the City to secure favourable costs of borrowing on long-term financing required to fund a growing community.
    • Maintaining the City’s cash and investments to maximize investment earnings while maintaining liquidity to support daily operations.
    • Using a zero based budgeting approach in which all expenses must be justified for each new period.  Creating a budget from a “zero base,” which requires that every service within the organization to be analyzed for its needs and costs. 
    • Ongoing internal audits conducted by the organization to monitor operating results, verify financial records, evaluate internal controls, assist with increasing operational efficiency and effectiveness and to detect fraud. 
  • How are service area (department/division) business plans linked to the annual budget process?

    Aligned with the budget process and Council's Strategic Priorities, business plans provide focus for each service over several years.  The goal of the business planning process is the long term viability of the community; spending tax dollars wisely and maintaining the quality of life for all London residents.

    See Service Area Business Plans for a full listing of the City’s services.

  • How does the Consumer Price Index relate to the City’s budget?

    The Consumer Price Index (CPI) is used to measure inflation/deflation in the prices of goods and services used by the average Canadian consumer.  While CPI is the most commonly used measure of inflation/deflation nationally, its use within municipal budgeting must be tempered as it does not capture price impacts that municipal governments face.  Municipal governments are under considerable pressure to relate their spending and taxation levels to cost inflation, yet each government’s experience with inflation can differ greatly from the national average. 

    The Municipal Price Index (MPI) developed by individual municipal governments incorporates the fact that governments budget for expenditures on a variety of goods and services which differ from the average Canadian consumer.  As the average price of that municipal basket of purchases changes, so too does the purchasing power of local governments. Historically, goods and services considered within the MPI have grown at a faster rate than those within the CPI.

  • How does the basket of goods used for the national Consumer Price Index (CPI) differ from that of the Municipal Price Index (MPI)?

    The key issue in calculating price index changes has always been defining the contents of the basket of purchases. The nature of the price index is determined by the composition of the specific basket — how spending is distributed among the components of the basket.  The following illustration is an example of the differences between the basket of goods within the CPI versus the basket of goods within a City’s MPI. 

    Basket of Goods and Services Comparison

    CPI

    Food, Shelter, Transportation, Machinery and Equipment, Clothing and Footwear, Health and Personal Care, Household Operations and Furnishings, Recreation Education and Reading, Alcoholic Beverages and Tobacco, Chemicals and Chemical Products

    MPI

    Labour, Contracted Services, Social Assistance Costs and Transfers, Building Maintenance and Rent, Equipment Purchases and Leases and Maintenance, Financial Costs (write-offs, debt, interest and carrying costs), Specialized Supplies (salt, asphalt, chemicals)

     

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