Recommended Issues) should city council wish to further reduce the city department budgets to offset the ABC increases. These issues are also highlighted in the Executive Summary to this report under Sections E and F.

Unfortunately, with continued annual inflationary pressures and after many years of fiscal constraint, and given the increasing service demands resulting from the population growth and vibrant economy, it is extremely difficult to find sufficient additional savings within the City controlled budgets to offset increases in the ABC budgets to achieve an overall zero tax levy increase without a significant impact to existing City services.

It is the strong recommendation of the CAO and CFO that the reductions shown in Sections E and F of the Executive Summary and also detailed in Section 13: Schedule B – 2020 Operating Budget Summary (Not Recommended Issues) not be accepted by City Council, as they were only included in the budget documents to provide Council with options to achieve a 0% tax levy increase.

Budgets – Looking at the Future

As one looks forward, it is extremely difficult to project future year budget requirements with a high level of certainty. This is due to the fact that the significant cost drivers that will impact those future years are unknown or difficult to estimate more than one year into the future. Examples of these constraints include the impact of the future state of the local economy, provincial grant levels (OMPF as well as other grants), legislated changes impacting municipal costs, changes to Council priorities or residents' service expectations, interest rates, utilities rate changes, fuel prices, legal related claims and outcomes of litigation and many other significant uncertainties.

If considered together with the limitations noted above however, multi-year projections can help Council approach current year budgeting with a more strategic and realistic long-term view. To facilitate these important discussions, administration has developed a preliminary estimate of the drivers that may impact the budgets over the next three years. These estimates are detailed on page 8 of the Introduction section of the main budget book.

Generally, and certainly not unexpectedly, the projections indicate that significant challenges will continue to be faced in future years' budgets. Current projections indicate potential increased levy requirements of approximately 3.2% per year over the next few years, prior to reduction options that typically materialize each year, but importantly also prior to any consideration of increased funding for capital expenditures on aging infrastructure that may be required under Asset Management Plan as well as other major capital projects or initiatives that may require funding. Therefore, generally speaking, over the next several years, Council can expect the continuation of very difficult decisions relative to balancing fiscal restraint goals and objectives with the desired service levels goals.

The fiscal restraint over the past decade was largely unprecedented. As a result, Windsor's property taxes are now lower than those of its peer municipalities in most assessment categories, and as a result of these measures, taxpayers accrued cumulative savings in excess of $750 million. This multiyear fiscal plan has essentially realigned the property tax profile of the City resulting in below average taxes in nine of the twelve tax classes, which is materially different than what the City faced in 2004 where the City was only below average