The City’s 2016 operating budget books are now public and senior city staff are forecasting a 2.3% tax increase for a budget maintaining the status quo from 2015.
Overall, a maintenance budget will increase spending by 3.5%.
City staff expect property assessment growth of 1.3% which brings the 3.5% to the tax increase forecast of 2.3%. In the budget report, staff write they are “confident that growth of 1.3%, p0ssibly more, will be achieved. The forecast was 1% in September.
Calculating the “Preliminary” Tax Increase
Estimates are Just That, Estimates
At this stage in the budget process, the preliminary tax increase serves more as a discussion point than an actual useful number due to the number of variables and unknowns.
The preliminary budget makes assumptions and does not include what Council calls enhancements – new services or expansion of existing services.
Boards & Agencies approve their budgets separately. Thus far, the Hamilton Police Service and Hamilton Public Library are below increase forecasts. The preliminary budget increase forecast expected a 3.8% budget increase from Police, the budget is 2.79%.
The Library was expected to request an increase of $293,070, they are asking for $236,270. The Police Service increase was excepted to be $5,608,870 – it is $734,684 less at $4,874,186.
The City’s preliminary budget does not include the full request of the Niagara Peninsula Conservation Authority. The City is appealing a change to NPCA’s levy calculation which sees the City charged $686,000 more per year than in the past. The matter is in front of the Ontario Mining and Lands Commissioner. Depending on when a ruling is made, this could impact the 2016 budget.
Departmental Increase Summaries
The biggest departmental increases in the budget are in the Corporate Services department’s financial section, followed by Mayor and Councillor’s offices.
The increase in Councillors’ and the Mayor’s offices does not include the 33% pay change calculation from the elimination of 1/3rd tax-free and the increase of 33% to their pensions.
Here’s a list of the increase percentages and amount in bracket when needed for context.
- Corporate Financials 38.8% ($4,042,270)
- Councillors’ Ward Offices 10.5% ($362,200)
- Mayor’s Office 6.8% ($68,400)
- Public Health 5.8% ($671,020)
- Community and Emergency Services 2.3% with uploading ($5,348,060)
- Capital Financing (debt financing) 3.6% ($3,824,530)
- City Manager 2.9% ($384,620)
- Corporate Services 2.9% ($558,360)
- Planning and Economic Development 2.7% ($756,590)
- Public Works 2.5% ($5,532,030)
- Police Services 2.79% ($4,874,186)
- Former HECFI facilities operating costs 1.6% ($76,850)
- Other Boards 1.0% ($423,680)
- Non Program Revenues – decreased revenue pressure 0.5% ($225,410)
Council Referred Enhancements
During 2015, Council referred numerous initiatives and funding requests to the budget process. None of these are included in the increases above. If Council approves them, the cost will be additional to the present 2.3% tax increase forecast.
Among the highlights are:
- $2,164,250 to expand DARTS by 75,000 trips in 2016. Council is required by provincial law to provide adequate DARTS service and has lost previously at the Human Rights Commission when they failed to do so. Staff state they are presently 6,205 active users of DARTS.
- $825,000 for rent subsidies for households with lower income at risk of homelessness. At an average subsidy of $300, the City expects to assist 287 households.
- $778,495 for debt financing of 11 new HSR buses required to meet previously approved transit increases.
- $500,000 for capital reverse replenishment for Macassa and Wentworth lodges.
- $450,000 for increased funding to the Arts ($300,000) and community groups ($150,000) as Council moved to consider as part of the 2016 budget.
- $350,000 for the Tourism Strategy Council approved in March 2015.
- $200,000 for Neighbour 2 Neighbour which will enable them to access a matching grant.
- $143,000 to the Hamilton Waterfront Trust operating budget.
Costs Not Included in Budget – Withheld until Later
HSR 10-year Strategy
A big missing item in the budget is the second year of the 10-year transit strategy. Continuing a tradition of withholding critical budget information from the public, the full HSR proposal to increase service is not including in the budget book.
No date is yet announced for this reveal.
The current Transit budget increase in the Public Works ledger is $4,219,390 or 3.9%. With HSR and DARTS fare increases, $3,107,850 of this increase will be picked up by Transit users.
The total Transit increase on the tax levy, for maintenance of the status quo, is $1,111,530 or 1.9%.
Golf Course Business Plan Update
The costs to develop a marketing strategy for the two municipal golf courses is not included in the budget book. It will be presented later in the budget process.