Kevin Werner Stoney Creek News Thursday, November 12, 2020
Hamilton councillors have set the stage for what could be a contentious 2021 budget debate that will pit advocates for additional spending against those who want tax relief for cash-strapped residents.
Councillors agreed in a 10-4 vote at their Nov. 11 council meeting to establish a 4.28 per cent water and wastewater rate increase, while also overturning finance staff’s recommendation in a 9-5 vote to eliminate the annual 0.5 per cent infrastructure levy and move forward to address the city’s deteriorating roads, sidewalks and bridges.
The city’s 2020 water and wastewater rate increase was 4.11 per cent. Councillors are scheduled to debate the proposed rate increase in December.
Councillors also pulled back on staff’s recommendation to force various boards and agencies, including the Hamilton Police Service, Hamilton Public Library Board and conservation authorities, to impose a zero per cent budget increase and allowed them to boost their budgets by two per cent.
But they did support increasing user fees by two per cent starting next year.
Flamborough Coun. Judi Partridge, a staunch advocate of curtailing city spending, was opposed to the 4.28 per cent water and wastewater rate increase, but was agreeable to restricting boards and agencies’ budget increases, as well as imposing the zero per cent guideline for the city’s departments.
“We understand there have been challenges right across the board,” said Partridge during the Nov. 11 council meeting. “Personally, I’d like to see that zero expand to across all of our departments.”
Hamilton councillors approved an average tax increase of 2.9 per cent last March during the start of the pandemic, after starting the budget process with a proposed 5.5 per cent average tax hike. Mountain Coun. Terry Whitehead was the only councillor who voted against the budget.
Stoney Creek Coun. Brad Clark said his residents are “struggling financially” during the pandemic, with homeowners racking up debt and using credit cards because they’re unable to afford any additional costs.
Yet Clark supported adding the 0.5 per cent infrastructure levy — which will raise about $4.3 million — to help fix deteriorating roads and sidewalks.
“I have residents tripping and falling on broken sidewalks,” he said.
Corporate services director Mike Zegarac said staff’s recommendation on the infrastructure levy was to “pause” on implementing it this year because of the pandemic. In addition, the city is already funding the police’s new forensic building and transit expenditures.
Mountain Coun. John-Paul Danko applauded the inclusion of the levy, arguing it is the “responsible course of action” as the city attempts to address its infrastructure deficit.
“By not doing the maintenance that our capital infrastructure requires, we are causing ourselves to spend more money down the road,” he said.
Ancaster Coun. Lloyd Ferguson said he doesn’t want to burden struggling constituents with higher taxes or fees this year. He said adding the extra 0.5 per cent “will be tough. People are struggling out there and I hear it too.”
Hamilton’s preliminary budget negotiations are starting with a proposed 4 per cent average tax increase. By adding the infrastructure levy, said Zegarac, the tax hike jumps to 4.5 per cent.
The city avoided a potentially devastating $61-million deficit because of the coronavirus pandemic when the federal and provincial governments provided COVID-19 relief. City officials also delayed a few capital projects and engaged in other cost-cutting measures that will see the city finish the year with a $420,000 surplus.
The city is expected to see nearly $45 million from a joint federal-provincial “safe restart agreement.” It’s unclear how much Hamilton will receive from the agreement’s second phase.
Zegarac said the city will continue to dip into its reserves, including the $11 million in federal gas tax, for 2021 to cover the extra $12 million added to its capital budget.
Mayor Fred Eisenberger supported both the additional 0.5 per cent infrastructure levy and imposing the two per cent budget increase for boards and agencies.
Mountain Coun. Tom Jackson called a four per cent tax increase “unacceptable,” but councillors have until the end of March to whittle it down to a more acceptable number.
“We have six months of work in front of us,” he said.