Region planning for possible tax revenue shortfall
Government adapting to rapidly changing conditions brought on by COVID-19 crisis
Welland Mayor Frank Campion’s effort to have regional government defer water and sewer rate increases to give taxpayers a break will get more study at the committee level.
Regional councillors voted to defer his motion as they spent hours Thursday working to digest the rapidly changing conditions brought on by the COVID-19 crisis.
Campion made his pitch during a discussion of a series of adjustments that would allow Niagara’s municipalities to pay the Region proportionally based on what they can collect in taxes and water/wastewater fees.
Niagara’s municipalities collect tax and water rate revenue, then remit a share to the Region to pay for services such as policing, transportation infrastructure, clean water — and public health.
“We have some large increases in our water and sewer rates, based on what has been passed on down to the local area municipalities, and people are going to have difficulty paying them,” Campion said.
“This is not a good time to be increasing those rates substantially. It flies in the face of what everybody should be trying to do and ease these things.”
Campion told his fellow councillors these are unprecedented times, and council needs to take unprecedented measures.
“I know there are some who will say it isn’t possible, but I think we can get together and find a way to make this happen responsibly,” he said.
His motion asked the Region to defer the 2020 wholesale water and wastewater increases. Council approved those increases last fall, as part of the budget process.
Ron Tripp, the acting chief administrative officer, said Niagara
is involved in a significant infrastructure renewal program, and water/wastewater is the biggest challenge.
In short, the Region needs that money.
“We made some responsible moves in 2020, and I know we will have to take a long look at it in 2021, but I would encourage council to stay the course this year,” he said.
Tripp told councillors staff knows the condition of the local economy, “but we would like to try not to lose any ground.” An asset management program last fall identified a massive $546-million backlog of infrastructure projects.
Fort Erie Mayor Wayne Redekop said some local businesses are planning to take advantage of the crisis, though he didn’t name the companies.
“Most distressing is what I have been hearing and been told by some reputable businesses,” Redekop said. “They can more than manage to pay their taxes, because they continue to operate and are probably making more money now than they did before the crisis started.
“However, they are going to take advantage of the fact there is no interest charged to June 30. I think that’s appalling. I think it is irresponsible. I think it is an indication of very poor corporate citizenship — and yet some of them are doing just that.”
St. Catharines Coun. Tim Rigby moved to defer the Campion amendment, and have the public works committee take a closer look at the ramifications. His motion passed 17-11. Campion’s amendment was attached to a seven-part omnibus motion ultimately passed by council. The motion gives Region staff flexibility when collecting its take of property taxes and water/wastewater fees.
“We have spent a lot of time working with the area treasurers to try and understand what the impacts would be,” said Todd Harrison, the Region’s treasurer and corporate services commissioner.
“We have looked at different allocation models, and quite frankly we are comfortable at this time and think it is responsible for joining our partners in not charging them interest on money they can’t collect.
“If the amount is substantially less than we anticipate, then we will get together with the CAOs and decide what to do, particularly as it relates to capital projects.”
Harrison said the administration is also combing capital programs and evaluating which projects must go forward. Capital projects are “the big cash drain” on the Region’s balance sheet, he added.