2023 Budget Edition

Greetings Residents of Ward 12, and welcome to the 2023 Budget edition of Craig's Current.

On March 29, Council approved a 2023 residential tax increase of 5.8% and in this newsletter, I will give you a rundown of what is included and what is driving the increase. On the surface, a 5.8% increase is significant - certainly larger than recent increases - so there are legitimate questions about the value for the City and its residents.

Going into the March 29th Council meeting to approve the budget, the proposed residential property tax levy increase was actually 6.7%. In the hours leading up to the meeting, Mayor Horwath worked with senior staff to find savings without incurring cuts to programs and services which was essential to earn my support. The Mayor's motion passed unanimously allowing Council to lower the average levy by 0.9% to 5.8% for the average assessed household.

That equates to $260 annually or $21.67 per month for the average assessed household.

I voted to support this budget (it passed by a vote of 10-6), but I don't take increases lightly. I campaigned on ensuring that your tax money is well spent and I feel that the 2023 budget achieves that standard. I will note that there was work done throughout the process to remove over $12 million (~1.2%) from the levy. That said, I fully acknowledge that there have been unprecedented financial demands on households over the past few years - most acutely since inflation accelerated in 2022 - and an increase in residential property taxes is certainly another pressure. Here is a breakdown of areas that your tax dollars support:

For the average Hamilton home, the 2023 increase will be $296/yr or $24.67 per month. You can find the specifics for your residential property at this link.

But, just as individuals are experiencing cost pressures, there are very significant pressures on the City's finances from several directions:

• The City's operations have experienced a dramatic rise in costs just to maintain current service levels, and unlike upper levels of government, a municipality cannot run a deficit, nor do our revenues increase with inflation.

• Staff presented large risks to service levels in several areas without additional investments.

• On-going revenue loss of nearly $10M vs. pre-pandemic years. Transit ($4.1 million), Parking Services ($2.1 million), and Recreation Services ($3.3 million) as those services continue to recover from the aftermath of the COVID-19 pandemic

• The provincial government has not only withdrawn many funding supports for the City but has actively downloaded costs onto municipal shoulders. The City of Hamilton is now bearing the cost of provincial cuts to public health, planning, emergency housing and shelters, and addictions & opioid response, to name a few examples.

• We could also see the prospect of much higher costs in the future without appropriate investments today (e.g. capital infrastructure and climate investments)

With these significant challenges presented to us, I, and many of my colleagues, approached the budget through both a climate and an inter-generational lens, and in that context, there are many factors that Council needs to consider. I would summarize the myriad competing interests into the following four categories:

1. Quality of Life - providing the level of services you require - and have come to expect - from the City

2. Cost today - residential property tax levy in 2023

3. Cost in the future - the impact of decisions made now on property tax in the future

4. Strategic vision - moving Hamilton toward our goals and helping the City reach its potential

Below is a summary of the items driving the 5.8% increase, followed by a more detailed explanation for each of the top categories.

^ development within our former urban boundary where infrastructure is already in place, will increase city revenues and lessen the burden on existing residents. Additional infill development can have an even larger positive impact in future years

* provincial legislation prevents the city from increasing property taxes on multi-residential buildings so there is an additional burden for residential taxpayers

$10M investment in Police Services to maintain service levels. I have heard a great deal of feedback from constituents that police patrols and responsiveness are very important to them. I have also heard from racialized and otherwise marginalized Hamiltonians that they are opposed to any increase in police funding. This line item was the single largest increase requested and consumed a great deal of my time as I spoke to people from many perspectives. In the end, I felt that approving the budget request was the correct decision for 2023 but also that there needs to be a lot of work done to make the proper investments in upstream services so that we can reduce the scope of work that the Police need to do. You can read about my decision in much greater detail here.

$6.88M investment in Paramedic Services due to call growth and the need to improve response times and meet service levels. In 2022, there were well over 300 Code Zeros (one or no ambulances available when you can call 911). This investment is required to reduce Code Zeros and to ensure that the community can be confident in our paramedic service. It will provide 35 additional full-time paramedics which is equal to 7 more ambulances on the road, and a bike response team for faster, more efficient off-road care. You can read the City's news release on this topic here.

$4.8M investment in the Fire Department to maintain service levels.

We are in a housing and homelessness crisis. Not only do we lack enough units to house fellow Hamiltonians, but there is also an extraordinary amount of pressure on many of our low-income neighbours. Through the budget process, Council learned that there is a very large risk for the homeless number to grow even further if our neighbours are unable to afford escalating rent, not able to access appropriate housing, or are unable to access to social services required to stay housed. This budget tackles all of these areas.

But, while there was significant funding from the province during the first three years of the pandemic enabling the City to provide adequate service in these areas without impact on residential taxpayers, those funds have largely disappeared for 2023. In fact, Provincial funding in this area has dropped 96% since 2021. Through this budget process, we knew that we could not do everything that needed to be done, but we did include spending for services that we felt could not go unsupported. There is very little new housing being built with this budget (hundreds of millions of dollars would be required), so we have focused on specific and creative ways to maintain the housing supply we have (it is at great risk of shrinking as affordable housing agreements run out and those units return to market rates) and to bolster housing related services in the City. This work includes ensuring the availability of multiple types of housing suitable for all ages and income levels, including seniors.

Note that Ontario is the only province where housing is downloaded to municipalities, and now the Province has ceased providing any meaningful funding. You can read the City's news release on this topic here.

New capital funding is absolutely essential to compensate for under-investment over many years. Without substantial infrastructure investment in core assets like drinking water, the City will not be able to meet safety standards and will have to spend much more in the future if proper maintenance is not performed. You might be asking, 'What has changed?' There has been a significant lack of investment in capital maintenance and no capital asset management process to strategically manage the many billions of dollars of City assets. This budget gets us moving in the right direction.

As an example of capital improvements, we are all familiar with the Chedoke Creek spill and the huge detrimental impact on our natural environment. The City is now actively looking for leaks and installing technology to reduce sewage overflow in our waterways. You can read more about this example here, and you can read the City's news release on capital infrastructure here.

Transportation-related services programs will see a significant increase including an 8 percent increase in the budget of the Hamilton Street Railway, a large portion of which is being allocated to 49,000 additional hours of service. This decision is in line with the existing 10-year transit strategy. I've heard over and over again that we need better options for getting around our City. Personally, I've been getting to and from work by bicycle and bus which works really well for me. That isn’t practical for everyone and that's okay, but our current transportation system highly prioritizes personal automobiles and we need a healthier balance. The goal of our public and active transportation strategies is to significantly increase the trips taken by methods other than private automobiles. To that end, the City has just launched a plan to completely re-design the HSR network which includes significant new service in Ancaster. You can learn more and learn how to provide feedback here.

Walking is the simplest form of transportation and there is additional money in this budget to more than double sidewalk snow removal throughout Hamilton, something that Ancaster has enjoyed exclusively for many years. As a result of spreading this cost across the city, the increase to Ward 12 taxes is softened by 0.1%.

We are also investing to accelerate the cycling master plan and to continue support for the SoBi public bike-sharing program. You can read the City's new release on this topic here.

During the budget process, Council received a report from staff about our ability to attract and retain employees and the role that compensation was playing in this area. As an experienced people leader, I recognized that without a change in our compensation strategy, we would be increasingly unable to hire and retain the smart and capable staff required to run the complex operation that is the City of Hamilton. I've heard loud and clear that service from the City is important (and in many cases needs to improve) so this investment is necessary to ensure the professional and talented staff are in roles that enable us to maintain current service levels and execute proper maintenance of our assets.

A portion of the savings from the Mayor's motion to reduce the increase came from this line item: we decided to delay the changes by 6 months (from Jan 1 to July 1st) and cut the budget impact by half. You can read the City's new release on this topic here.

I campaigned on a promise to elevate the priority of climate change mitigation and adaptation and to ensure the City took appropriate and urgent action on the climate emergency declaration made in 2019. I am very excited that Dr. Lynda Lukasik has been hired as the Director of the Office of Climate Change Initiatives. Work on climate change is infused throughout the corporation. Lynda will be working with each department on their own climate initiatives and is also responsible for directing the funds for her office into meaningful projects. You can read the City's new release on this topic here.

To get context on Hamilton's budget, it's appropriate to compare our increase to those of neighbouring municipalities that are dealing with many of the same challenges we are. Our approved tax increase of 5.8% places it in the middle of the pack and much less than several of our neighbours, including Burlington and West Lincoln at 7.5%, Niagara Falls at 7.4%, and Toronto at 7.0%. Mississauga & Guelph passed budgets with a 5.3% and 4.5% increase respectively. Hamilton is delivering an operating budget that is in line with other municipalities and delivers increased support in key areas, including housing, transportation, and accessibility for seniors and those with disabilities.

In the May newsletter, I will be able to provide an update on Fire Area Rating and the impact it will have on 2023 taxes. The previous Council took steps to eliminate several area-rated services throughout the City and ‘Fire’ is the next one on the list.

Area rating is a municipal property taxation policy tool permitted by the Provincial Government (Ontario Regulation 585/06), intended to account for either significant differences in service levels or differences in the cost of providing services across different parts of the City. Where applied, properties with the same assessment but different service levels are taxed differently.

To read answers to frequently asked questions about the budget, you can access our Budget FAQ here.

As ever, thank you for your engagement in our community and for taking the time to read this Budget Edition newsletter. Please share it with neighbours and friends in Ward 12. You can always reach us at [email protected]. Have a safe and enjoyable week.