Report endorses hiking transit levy

The City of Ottawa wants to hike the transit levy on property tax bills by 3.5 per cent next year, more than what it had expected in a long-range funding plan for transit services.

A budget report published Friday ahead of a council meeting next Wednesday recommends the 3.5-per-cent transit levy increase because 2019 will be a “transition year,” considering the anticipated launch of the Confederation Line LRT.

It was only in March 2017 that council received a long-range financial plan for transit that said transit-specific taxes and fares would increase each year by 2.5 per cent. Now, the city says there are more expenses that must be addressed, including costs related to labour, legislative changes to the Canada Pension Plan, purchased services and fuel.

While the transit tax is poised to increase more than expected, staff recommend sticking with a fare increase of 2.5 per cent, taking effect on July 1. Transpo agreed to hold off on the annual fare increase while the LRT system was still being built.

The $2.1-billion LRT line is expected to open by the end of March. The builder, Rideau Transit Group, missed two handover dates in 2018. A 3.5-per-cent increase to the transit levy would also provide more service in growth areas, staff say in the report.

Residents, especially those in Barrhaven, have drawn Transpo’s attention to a stretched transit system in which buses are packed to capacity or don’t show up on time.

“The 3.5-per-cent transit levy will continue the city’s investment in both operating and capital infrastructure for transit, including Stage 2 light rail, and allow for continued expansion of service to meet the future needs of the transit system,” staff say in the report, which proposes the 2019 budget targets before the mayor, committee chairs and city management work further on the financial forecast.

As for the rest of the property taxes, staff recommend an increase of up to three per cent in 2019. Mayor Jim Watson campaigned in the recent municipal election on annual tax increases of no more than three per cent.

The city estimates that would generate $73.36 million in additional tax revenue in 2019, based on staff budget recommendations. Of that, $9.8 million would be used for infrastructure renewal.

Water rates, sewer rates and stormwater fees are projected to increase next year in line with past forecasts. That means a four-percent increase for water, five-percent increase for sewer and 13-percent increase for stormwater.

Staff expect the 2019 draft budget will be tabled Feb. 6, with a final council vote scheduled for March 6.

The 3.5-per-cent transit levy will continue the city’s investment in both operating and capital infrastructure ...