Unexpected $10M defuses council clash
Call for higher tax hike fizzles after decision to spend windfall
Facing an unprecedented uprising from eight councillors who backed an infrastructure levy intended to raise extra cash to repair crumbling roads, parks and buildings, Mayor Jim Watson pulled a rabbit from a hat at Wednesday’s budget meeting — an extra $10 million thanks to a better-than-expected surplus this year.
Before the debate got underway, city treasurer Marian Simulik informed council the forecast for the 2017 year-end has improved significantly. As a result, she projected an increase of $10 million in the citywide reserve. The reserve-fund balance by the end of 2017 is projected at $22 million, Simulik reported.
The reserve is used to fund all tax-supported capital projects with the exception of Ottawa Police Service and OC Transpo, and the additional funds, according to Watson, are not committed or needed to fulfil any of the city’s current long-range plans.
And so Watson, noting “broad support to continue our city’s progress in renewing our built infrastructure,” called for council to agree the $10 million should be spent on general infrastructure, and asked staff to quickly compile a list of recommended renewal projects, including roads, sidewalks, bike lanes, sidewalks and city facilities.
“It’s a Christmas miracle,” quipped Coun. Rick Chiarelli, who drew the mayor’s ire last month when he dubbed the $3.42-billion budget “fake.”
The surprising development, which Watson had shared with some — but not all — councillors in advance of Wednesday’s meeting, prompted Kitchissippi Coun. Jeff Leiper to withdraw his motion that would have requested an additional 0.5 per cent to the already- planned two-per-cent property tax increase for infrastructure.
Councillors who backed the infrastructure tax — David Chernushenko, Rick Chiarelli, Mathieu Fleury, Catherine McKenney, Tobi Nussbaum, Marianne Wilkinson and Diane Deans — had argued it would only cost urban landowners an extra $1 each month, but could raise an additional $8 million for asset repairs.
Each of them, ultimately, supported Watson’s motion, which won unanimous approval.
The poor state of Ottawa’s roads has been a theme this year. In a rare post-budget move, council voted in May to pour $2.9 million more into 2017 road maintenance programs.
After close to four hours of debate, the 2018 budget passed by a vote of 19-5. Chiarelli, Deans, Leiper, McKenney and Nussbaum all opposed.
It wasn’t the first chilly reception for a Watson budget. Five councillors voted against the 2016 budget, approved in December 2015.
Even before the 2018 budget was tabled last month, there were rumblings of discontent. Leiper predicted it would “highlight the limitations of that two-per-cent increase.”
With a two-per-cent tax increase, the average residential landowner in the urban area will pay $76 more next year, while those in the rural area will pay $62 more, based on a property assessment of $404,000. The average commercial property with a $460,000 assessment will pay $163 more.
There will also be increases in the water rate (four per cent), sewer rate (five per cent) and stormwater fee (five per cent). The garbage fee on property tax bills will increase by $2, while the garbage fee for homes in multi-residential buildings will increase by $1.
Though it may be considered an election budget, since it’s the last one before the October 2018 vote, there were hardly any perks.
The budget will pump $12.6 million more into transportation infrastructure renewal, which should mean more road resurfacing projects and pothole fixes. In fact, the city will add $600,000 to its annual pothole repair budget, making permanent some one-time funding scrounged up earlier this year after a punishing winter.
There would also be more money to maintain recreation complexes, community centres and parks.
In all, the 2018 tax-supported budget proposes $108 million more in spending compared to 2017.
It would cost $62.9 million alone just to maintain the current level of service, mostly because of salary hikes and inflationary increases on purchases.
The property tax increase will pour $32.1 million more into the city coffers. Added to that is the number of new tax assessments, projected to bring in another $24.4 million. The province will also provide money to run childcare programs, while user fee increases would provide a bit more to offset the extra spending.
That means things like swimming lessons, marriage licences and business licences would increase by roughly two per cent in 2018. One standout is ice-time fees for city arenas, which are poised to go up 5.6 per cent.
Social service agencies currently funded by the city will see more money in 2018, including an inflationary increase of three per cent for agencies, on top of a base funding increase.
The budget didn’t initially include a so-called “on-ramp” fund for social agencies that currently don’t receive municipal money — something advocated by a mix of councillors, community leaders and residents.
However, councillors backed a motion introduced by Deans to create a one-time, $100,000 fund in 2018 to support eligible and approved social agencies that don’t currently receive renewable city funds.
The average homeowner will pay $603 to the Ottawa Police Service next year, a $12 increase that, in total, will see the force collect $8.5 million more than in 2017. More than 80 per cent of the police force’s $330-million budget is allotted to salaries.
An additional 25 officers will be hired in 2018. But there’s no additional money in next year’s budget earmarked for traffic enforcement, despite pleas from city councillors that their residents want to see more enforcement.
OC Transpo will mark the longawaited opening of the Confederation LRT Line next year by raising transit fares, but low-income riders will finally get a break on singleride trips. The bus service intends to introduce the new EquiFare before the end of June 2018. Eligible transit users who live below the low-income cut-off would pay $1.75 for a single ride, compared to the 2018 single-ride cash fare of $3.50.
Regular fares will increase Jan. 1 by roughly 2.5 per cent. The transit levy on property tax bills will see the same increase. The cost of an adult monthly pass will climb to $116.50, up from $113.75.
The Ottawa Public Library’s 2018 budget proposes about $1.5 million more in spending.
Ottawa Public Health expects to receive $205,000 more from the province for program costs shared with the city; it anticipates receiving another $415,000 from the city for those programs and others that are fully covered by the city. The province traditionally pays 75 per cent for provincially-mandated programs run by OPH.
The city’s outstanding longterm debt will be $2.27 billion at the end of the year. It’s expected to be the same at the end of 2018, and although the servicing costs are within council’s limits, the debt level has continued to climb over the past 12 years as the city builds LRT. The outstanding long-term debt in 2005 was $477.4 million.