Region facing low assessment, revenue issues for 2017

There are additional costs for planned programs, but the money’s not there

WATERLOO REGION — Regional council is in unusual territory with low assessment growth and lower than expected revenue as it heads into the 2017 budget process.

Add to that major new spending asks and it’s sure to be an interesting budget process.

“What are we going to do as a group to balance providing services but also try to keep tax increases at a reasonable level,” said budget chair Coun. Sean Strickland at council’s first budget session of the season Wednesday.

Region of Waterloo chief administrative officer Mike Murray said the region has two unique challenges this year — low assessment growth and less-than-expected revenue from Grand River Transit and the Region of Waterloo International Airport.

“Depending on what happens over the next couple of months we may be looking at the lowest assessment growth we’ve had in the last 15 years,” Murray said.

The budget has been prepared with an assumption of 0.7 per cent assessment growth, about half what the region had for 2016.

Average assessment growth since 2000 has been 2.2 per cent with a peak of 3.53 per cent in 2006 and a low of 1.34 per cent in 2010.

Transit revenue is expected to be short up to $2 million at the end of 2016. Staff have scaled back anticipated revenue for 2017 by $1.5 million after three years of not making the revenue budget.

The region starts its discussion with a base budget drafted by staff that would require a tax hike of 2.3 per cent, before Waterloo Regional Police are accounted for and before any new spending.

That would add about $44 to the property tax bill of an average home in the region assessed at $312,500 in 2016.

Combined operating and capital spending would be about $1.6 billion.

But the draft budget doesn’t include new spending on the table for the ambulance service and Grand River Transit.

The ambulance service has struggled with poor response times and politicians recently endorsed an emergency services master plan that calls for significantly more money.

The plan calls for 20 additional paramedics and seven support staff at an annual cost of $4.3 million, half of which the province covers. The master plan said an additional $1.1 million for five new ambulances and a new $18-million fleet centre are required.

Another big ticket item is the Grand River Transit master plan. It calls for an additional $5 million in spending every year, for five years.

“Certainly I think both the ambulance and even more so the (Grand River Transit) issue paper, when they come forward, (are) worthy of further scrutiny,” Strickland said.

Staff said those two programs along with a few other proposed new spending items would cost an additional $11 million per year by full implementation in 2018.

Water and wastewater rates are also generally expected to increase.

Staff propose water supply rates increase of 1.9 per cent, about one per cent lower than last year and the 2017 projection. The water distribution monthly service charge is expected to increase $1 to $9.

Waste water treatment rates are expected to increase by 7.9 per cent, or one per cent higher than last year.

Water distribution rates are expected to increase 8.9 per cent, the same as 2016. Waste water collection rates would increase the same as 2016 at 5.9 per cent. The waste water collection monthly service charge $1 to $7. Rates would go into effect March 1. The region sets wholesale water rates for cities, which then set the rates charged to residents. The region takes care of the water and sewage while the municipalities collect and deliver it.

The townships of Wellesley and North Dumfries are the exceptions because they receive services solely from the region.

The Waterloo Regional Police Services Board has not yet seen the proposed 2017 police budget but it’s expected to have a tax impact similar to 2016 which was about 0.7 per cent.

In 2016, politicians approved a three per cent tax hike, including police, which added about $54 to the property tax bill for an average home assessed at $302,000. The average property tax bill for regional taxes was projected to be about $1,882 for 2016.

Water and wastewater services are expected to be approved Dec. 16. The rest of budget is expected to be approved Jan. 11.