Council not prepared to support 2.6% tax hike

City council has asked staff to come back to a future meeting with options to reduce a proposed 2.6 per cent tax increase for Niagara Falls homeowners.

Coun. Vince Kerrio said other Niagara municipalities have approved operating budgets with similar or lower tax increases, and they don’t receive more than $20 million in casino-hosting revenues that Niagara Falls receives each year.

“I’d like to see some alternatives,” said Kerrio.

“It’s very difficult to explain to taxpayers that we get all this extra money every year, yet they’re seeing increases every year.”

Council approved a motion from Kerrio for staff to report back on alternatives, and potential areas where cuts can be made.

Mayor Jim Diodati said he would like to see staff come back with an increase of less than two per cent.

City council is facing a $1.6-million difference between projected revenues and proposed expenses as part of the preliminary operating budget scheduled to go before politicians Tuesday evening.

If approved as presented, that would represent a 2.6 per cent tax increase for Niagara Falls homeowners.

Finance director Todd Harrison said St. Catharines approved a budget that included a 1.6 per cent tax increase, Welland approved a 2.6 per cent increase, and Niagara Region approved a two per cent increase.

During this week’s meeting, council discussed its preliminary 2018 operating budget, which includes $135,056,601 in expenses, and $133,458,578 in revenue.

The $135 million in expenses is $4.1 million, or 3.1 per cent, more than 2017.

The $133.4 million in projected revenues is $2.5 million, or 1.9 per cent, more than 2017.

The largest expense is for salaries and wages — $47.3 million in 2018 versus $44.5 million in 2017, a 6.2 per cent spike. The largest source of revenue comes via general taxation — $65 million in 2018 versus $63.7 million in 2017, a two per cent spike.

Harrison said the budget maintains core service levels with additional expenditures due to council priorities.

The budget includes the impact from an anticipated fire contract settlement; an enhanced preventative maintenance program; multi-year transit enhancements; and increased resources for park/ street maintenance.

Harrison said the budget also includes new staffing, identifies revenue reductions in user fees and grants, and includes strong assessment growth from 2017.

New proposed positions include additional bus operators; two seasonal employees for turf fields; a supervisor of infrastructure; and an additional bylaw officer.

He said reductions in debt servicing is partially offset with the issuance of debt for a new HVAC system at the library.

Niagara Falls’ debt was at $62.4 million at the start of council’s term in 2014, and is projected to go down to $48.1 million by the end of 2018.

Harrison said the budget reflects increased infrastructure costs, and a slight increase in pool costs for additional hours of operation.

There are proposed increases to fee-for-service groups, including Chair-A-Van, Niagara Falls Library, and Niagara Falls Humane Society.

In 2017, the city’s 16 fee-for-service groups and boards received $6.7 million.

That number is proposed to increase to $6.9 million this year.

On the revenue side, Harrison said assessment growth will result in $1.3 million in new revenues, but that will be offset by assessment appeals.

He said the city is seeing a continued reduction in Ontario Municipal Partnership Fund grant money from the province (from $2.6 million to $900,000), a reduction in Provincial Offences Act fees, and reduced penalties in tax arrears.

Harrison also provided feedback on recent public consultations staff held on the budget process.

The Let’s Talk Niagara Falls section of the city’s website saw 198 survey responses, while staff held engagement events at several public facilities in November.

More than half – 52 per cent — indicated they would support an “inflationary increase” of approximately 1.5 per cent, while 33 per cent indicated they wanted to see no increase.

For those who supported a tax increase, most said they would like to see the increase spent on roads, followed by sewer/water services, and parks/trails.

For those who chose a zero tax increase, most said reductions should be made to sports facilities/fields, followed by arenas and cemeteries.

Roads, sewer/water and fire were the three highest services deemed “very important” to respondents.

Niagara Falls receives more than $20 million per year from Ontario Lottery and Gaming for hosting two casinos. Most of the money is allocated to infrastructure renewal, with millions also allocated to minimize tax increases and support the future development of a new Niagara Falls hospital.

Those were the three areas survey respondents most found “very important” for the OLG funding to be allocated.

When asked if they support the use of debt to accelerate an infrastructure renewal program, the majority, 56 per cent, said yes in some cases (on large investments only), 23 per cent said no, and 21 per cent said yes.

Harrison said the parking and utility budgets are scheduled to go before council at the Feb. 13 meeting.