No final decision about directing $16.9M of budget surplus to property tax relief

London city hall on April 9, 2025. (Sean Irvine/CTV News London)

On Tuesday, council backed the mayor’s plan for reallocating a massive $58.8 million surplus left over from the 2024 municipal budget after being assured that a decision to put $16.9 million towards tax relief won’t be finalized until budget deliberations this fall.

Josh Morgan emphasized that the funds would be set aside in a reserve fund until a business case is prepared by staff for the 2026 Municipal Budget Update.

“Council will have the full right, for any part of the budget, to amend, to remove, to add in anything they’d like to see,” Morgan reiterated. “So, there is no decided matter of council associated with this.”

Dividing the $16.9 million evenly between 2026 and 2027 would shave about 1 per cent off the upcoming tax increase.

• $58.8M budget surplus for London in 2024
• Mayor confident ‘budget bomb’ can be defused if part of $58.8M budget surplus directed to tax reduction
• How should council spend a $58.8M budget surplus?

Deputy Mayor Shawn Lewis pushed back against a letter from Pillar Nonprofit Network that reads, “we strongly urge council to consider reinvesting a portion of these funds into London’s nonprofit sector and essential community services.”

“People need relief,” Lewis told colleagues. “Those people who want to see investments made in other programs can take their $200, $300, or whatever they’ve saved on their property tax bill, and they can direct it to whatever charity of choice they have.”

Council also supported the staff recommendation to reallocate the remaining surplus to mandatory Development Charge exemptions downloaded from the provincial government ($16.6 million), and debt reduction ($25.3 million)

A long list of programs and departments contributed to the surplus.

The largest contributor ($28.8 million from Financial Management) is described in a staff report as a “surplus in provision for tax appeals & uncollectible taxes ($10.8 million) due to delay in property reassessments resulting in lower appeals and assessment at risk, investment income surplus ($10.5 million) from higher interest rates than budgeted, personnel & contingency savings ($5.7 million), and other miscellaneous factors ($1.8 million).”

Other significant contributors

• Community and Social Support personnel savings ($1.8 million)
• Ontario Works net surplus ($4.2 million) due to higher than budgeted provincial funding and transition to London Regional Employment Services,
• Child Care net surplus ($2.9 million) primarily due to 2023 revenue adjustments
• Personnel savings ($3.0 million)
• Utility savings ($1.0 million) due to lower fuel prices
• Provincial Offences Act ($2.9 million) surplus primarily due to implementation of new accounting standard
• Higher than budgeted user fees primarily in W12A landfill ($3.3 million)