The City budget process is well underway. Council approved the water rates and user fees for 2023 during their first meeting cycle.
Council deferred approving the capital budget to give themselves times to actually read the budget book first.
City 2022 Budget Deficit at $16M as significant property budget tax increase looms
- Earlier projections for the 2023 operating budget suggest a minimum 6.9 percent property tax increase.
- The 6.9 percent scenario includes significant reliance upon the City's reserve funds and deferring projects;
- The new Council states they want a sustainable budget and are asking how to achieve this.
- This year's property tax increase could be higher to achieve sustainability.
- A higher increase today to address infrastructure and program deficits should result in lower increases in future years.
- [See below for a story of how deferring a $50-million project a decade ago means Council must spend $140-million minimum today.]
- Water rates will increase by 6.49 percent in 2023.
- The average annual residential bill is presently approx. $823, it will increase by $53.45 to reach $877;
- A separate 0.92 percent capital levy increase is proposed to address the City's multi-billion dollar infrastructure deficit.
- Council has not yet approved the capital budget. They will return to it on January 20, 2023.
- Council is debating how to stop City's multi-billion infrastructure deficit from continuing to grow.
- User fees will increase on average by 3.8%.
- The City's projected deficit for 2022 is forecast at $16.4-million.
- Staff cite COVID-related costs and decreased user fee revenue as primary drivers of the deficit.
Police Seek 6.71 Percent Budget Increase
The Hamilton Police Service says it needs a 6.71 percent budget increase to provide “adequate and effective police services.”
2023’s budget proposal is split between $190,020,482 for operating (up from $180,133,354 in 2022) and $5,830,526 (up from $3,409,185).
13 new police officer positions are proposed in the budget, along with 18 new civilian employees.
Hamilton Police state the service needs to hire 13 new officers each year until 2030 to match population growth and maintain “the current Cop-to-Pop (population) ratio of 146 Officers per 100,000 population”. This average is 176 across Ontario and 183 nationally.
The Police Board passed the budget without amendment on a split vote, PSB Member Ward 2 Clr Cameron Kroetsch voted against the budget.
The debate at the Police Board was unnecessarily tense when Police Board Chair Pat Mandy, a provincial appointee, tried to dissuade Kroestch from asking questions.
Mandy suggested Kroetsch should ask questions in private after the budget approval meeting. Kroetsch asked four questions during which Mandy asked, "you didn’t have opportunity to ask them at the committee? I just want to move us on."
With Police Board approval, City Council will debate the police budget on January 12, 2023. Council can choose to approve the budget or enter into a budget arbitration process at the Ontario Civilian Police Commission.
Councillors Office Budgets
Ward 2 Clr Cameron Kroetsch's attempt to increase councillors' office budgets to $375,000 per year was defeated on November 30 in a series of divided votes.
The cost of this first proposal was $1.2-million per year.
Councillors voted for and against it for a myriad of reasons. Some were reluctant to pass an increase outside the budget process, others opposed any increase in principle, and others wanted it debated more wholesomely.
At Council on December 7, Kroetsch "lifted" the committee item and changed his motion to refer the proposed increase to the 2023 operating budget process.
He decreased the proposed increase to $40,000 for each councillor's office. The price tag for this is $600,000, half his original motion.
Councillor budgets will continue to vary, using an existing formula..
In empty posturing at Council, Ward 6 Clr Tom Jackson added a clause stating the office budget increase cannot be used for councillor pay and benefits.
The Municipal Act forbids councillors from using their office budgets for personal benefit. [Councillors must vote on their remuneration package in public session as per Section 283 of the Act]
Jackson's redundant clause was included in the amended motion.
The amended motion passed unanimously 16-0.
Councillors took the opportunity to speak to the motion by stating there is a public expectation of responsive service from councillors, and their current budgets do not adequately fund doing this.
The budget increase will be voted upon near the end of the budget process.
Delaying A Critical Project turns $50-million to $140-million, but $300-million is what's really needed
The Dundas Wastewater Treatment Plant was built with a design life of 60 years.
In its 73rd year of operation, it must be replaced.
Past councils delayed replacement for the past two decades, hoping for the federal government or province to fund the project.
Those delays mean costs have gone up.
Hamilton's Water Director Nick Winters told Council the 2015 replacement cost estimate of $50-million is now $140-million. That's just for a bare minimum replacement.
$300-million is the cost of building a treatment facility that meets the City's commitments in the Hamilton Harbour Remedial Action Plan to improve water quality in Cootes Paradise.
Staff will return to Council in mid-2023 with Plant replacement options and budgets.
You can watch on YouTube here.
Early Budget Projections for 2024 and 2025
City staff expect to increase the City's budget by an additional 4.3 percent in 2024, 3.9 percent in 2025
Staff's conceptual operating budget estimates for 2024 and 2025 were shared with Council in early November during orientation.
The estimates are already being exceeded.
The Hamilton Police Service Board is debating a 6.91 percent request for 2023. City Hall staff used a 2.1 percent increase for their estimate.
The Hamilton Public Library, for example, is seeking a 3.5 percent increase for 2023 [see next brief]. The staff projections assumed 2.9 percent.
Public Library Seeking 3.5 Percent
The Library is asking for a budget increase of 3.5 percent for 2023, which is approximately $1.15-million above the 2022 annual budget of $32.7-million.
The HPL is budgeting 2.5 percent for wage increases.
"2.5 percent is consistent with what the city is suggesting that their departments use when preparing their operating budgets," Library Director of Finance and Facilities Tony Del Monaco stated during the November Library Board meeting.
The City of Hamilton's labour collective agreements expire on December 31, 2022.
The City and its unions will negotiate new agreements in the new year.
The Library mirrors the wage increases from those contracts.
The Library plans to hire new staff for increased hours at branches. This will cost $470,000, representing nearly half the 2023 budget increase.
[More info under "Library Service Hours Expanding (Again)" in the City Hall Briefs section below]
Part-time library staff can now buy into the City's OMERS pension plan. The Library expects 30 percent of part-time staff to opt in, adding $132,000 to the annual budget.
Banked savings from COVID closures will be used to keep the levy tax increase to 3.5 percent. $200,000 of the reverse is being applied to this budget. Gapping due to vacant positions is expected to increase by $110,000 this year.
The Library budget goes to Council in late January.
Adding Mental Health Supports to the Municipal Budget
The provincial government continues to freeze its funding for Alcohol, Drug, & Gambling Services and Community Mental Health Promotion Program services.
The freeze means Hamilton's public health services must cut staffing to stay within provincial budgets.
Staff recommended a 0.6 FTE reduction for Alcohol, Drug & Gambling Services and a 0.65 FTE reduction for the Community Mental Health Promotion Program budgets.
Clrs Clark, Kroetsch, and Wilson expressed concern about these services' cutbacks.
Clark stated the City to look at funding the provincially imposed deficit.
Council voted to continue the program at its present staffing levels until April 30, 2023, with a longer-term decision to be made during operating budget deliberations.
Capital Budget Decision Deferred to January
Councillors are reading their agendas, or at least trying to.
Council voted 13-3 to defer ratification of the 2023 capital budget to give themselves enough time to review the thousands of pages of budget documents released to them only three weeks ago.
Three councillors opposed the deferral: Matt Francis (W5), John-Paul Danko (W8), and Mike Spadafora (W14).
Senior city staff confirmed the deferral would not impend any jointly funded projects.
The deferral allows new councillors to seek further clarity before approving the budget plan. (Some may come back seeking to remove planned projects, but unlikely such a motion would gain majority support.)
Councillors will have opportunities to implement changes to the 2024 capital projects plan in the coming months.
Capital budget approval is expected to occur at the January 20 Council meeting.