Ward 15 Newsletter - February 2003

At the moment, we are going through one of the worst cold-weather snaps in Flamborough history. However, a tax meeting held by myself and Ward 14 Councillor Dave Braden on January 18 at the Millgrove Community Centre proved that there’s plenty of heat up here – especially when it comes to the recent round of Current Value Assessment (CVA) hikes and the 2003 Budget process. In this newsletter, I’ll try to bring everyone up to speed on where the 2003 Budget sits; how it got there and what can be done. As well, we’ll be dealing with the contentious (and in many cases, outrageous) CVA hikes to properties in Flamborough and what I’m hoping to accomplish when I and city staff visit provincial Finance Minister Janet Ecker in the near future.

2003 Budget: For those who missed it, the January 18 tax meeting in Millgrove was very well-attended and at times, quite emotional. Hamilton’s Budget Chief Rob Rossini was on hand to explain the city’s tax situation while Corinne McCormack of the Municipal Property Assessment Corporation (MPAC) was there trying to explain the methodology used to arrive at the CVA figures.

The City of Hamilton 2003 Budget is seeing an increase of $57.8 million over the 2002 Budget and the first question everyone asks me is: “why?” There’s a number of increases in service costs for 2003 and near the top of the list is an additional $12 million needed for emergency services. That breaks down into police ($6.8 million more needed), fire ($2.7 million), ambulance ($1.3 million) and radio trunking ($1.2 million).

Let me explain the situation with the police services since their portion is the biggest and their set-up is different than most of the city’s other service providers. Our total city operating budget for 2003 is presently slated at $493 million. The requested police budget for 2003 is $91.6 million – roughly 20 per cent of our entire budget. Last year, the police received roughly $85 million. Under municipal legislature, the city itself has no say on how the city’s police force distributes its budget. This means simply if the police force wished to buy, say, a helicopter, they could without our permission. As well, if we decline to give them an increase, the police board has the option of appealing our decision at the Ontario Commission On Police Services (OCOPS). Any decision brought forth by OCOPS is binding – if they insisted we increase the police budget, we have to. That is why, every year, it’s best to come up with a figure both the city councillors and the police services board can agree upon.

After emergency services, there are a number of other budget pressures and increases from last year, including another $5 million for Social and Public Health, another $4.2 million for Fleet, another $3.7 million for Waste Management, another $3.6 million for Roads and another $1.3 million for various Board and Agencies. As you can see, it doesn’t take long to pile up. However, staff from every department in the city has been told to come up with a total of $41 million in cuts, bringing that $57.8 million down to about $17 million.

Here is where we face one of our biggest problems – while $493 million is a huge number, council doesn’t even control half of that figure. We control about 48 per cent of it. Another 28 per cent of the total are Provincially-mandated costs, such as social housing, which the Province dictates to us and we pay for. The final 24 per cent is controlled by numerous board and agencies, which the city funds.

This is where we really run into problems. Ontario is the only province in all of Canada that expects its municipalities to pick up the tab for social services. Social Services and Social Housing will cost Hamilton $117 million this year and we all pay into that through our municipal taxes. By the same token, if, for example, Edmonton had $117 million in social costs, the Province of Alberta would pick up the tab. In fact, Ontario is the only province, state or region in the entire G8 industrial democracies (Canada, the United States, France, Great Britain, Germany, Japan, Italy and Russia) that legislates municipalities to foot the bill for social services. That’s why in my June 2002 Newsletter, I noted the city’s Finance staff was pressuring Queen’s Park to include us in the Greater Toronto Area (GTA) pooling. That way the cost of our social services would be spread right across the GTA (Burlington through to Oshawa), rather than be shouldering by Hamilton’s residents alone. Presently, that’s how the City of Toronto is staying afloat with its social services costs – all those municipalities are putting tax dollars into the social services pot. However, our request for Hamilton’s inclusion into the GTA has now been turned down twice by the Province. We are still working on the social services pooling concept, though – this time with Halton and Niagara.

So where are we losing money? Any number of places, it would seem as we are faced with some huge tax inequities. The City of Hamilton’s number one employers are health services, such as hospitals and medical clinics. The buildings which houses these health services, as well as colleges, universities and jails, are taxed at a far lower rate and the Province is supposed to forward the City the difference in a “payment-in-lieu.” However, the Province has frozen those payments-in-lieu at the same rate for the past 17 years. This year alone, that figure represents up to $70 million in potential lost revenues to the city.

As well, businesses in Hamilton paying commercial-industrial taxes are at a huge competitive disadvantage and that, in the end, hits home-owners in the wallet. Our commercial education tax rate is 47 per cent higher than Halton’s and our industrial education tax rate is 14 per cent higher than Halton’s. Why is this important to you, the home-owner? The reason is the Province’s Bill 140 says that if your city’s commercial-industrial tax rates are above the Provincial average, the difference has to be made up by your residential tax base. That difference is considerable, totalling $27.8 million.

What Can We Do? The first thing we should do is let the Province know we’re not happy with the money being withheld from Hamilton. To that end, I am inserting a separate letter within this Newsletter to Finance Minister Janet Ecker, which I am asking Flamborough residents to sign and fax to her office. Please feel free to bring it into the Flamborough Town Hall and have staff fax it for you. Six months ago, I moved a resolution at Hamilton Council, asking the Province to do an audit of the monies promised and never delivered for downloading costs and then hopefully, come forward with the monies we’re missing from the supposedly “revenue-neutral” downloading. Hamilton has heard nothing yet from the Province. When the Province does its audit, it can tell us what they believe we are or aren’t owed. But perhaps if Flamborough’s voices are loud enough, the Province might finally begin to move on this. This letter is not going to Ecker by choice but by necessity. The financial picture for Flamborough (and Hamilton) is bleak and getting bleaker by the day.

CVA hikes outrage Flamborough: Even more than the 2003 Budget, which is contentious enough, the message I’m getting from Ward 15 residents is anger and confusion over their recent CVAs.

In early-2001, Flamborough had already seen an average 12.2 per cent CVA hike across town and when the new CVAs came out in November 2002, the new residential assessments were through the roof. The Flamborough average was 16.6 per cent but my office got about 300 phone calls from residents that were far above that – ranging from 20 per cent right up to 68 per cent. Every resident wanted to know the same thing: how were these figures being derived? Even MPAC is having a hard time answering that, especially on a case-by-case basis. As the group that assesses the value of your home, MPAC works off a number of variables, including recent sales of homes in your neighbourhoods but we have a hard time believing the hikes we have seen, as do most residents. MPAC was created by the Province, follows Provincial dictates but its costs, too, were downloaded to the municipalities by the Province. In Hamilton alone, we pay $4.3 million every year for MPAC but have absolutely no say over assessments.

However, from our January 18 tax meeting, one thing became crystal clear. If we want to change MPAC, we have to do so at the Provincial level. To that end, both myself and city Finance staff have a meeting on January 30 with Finance Minister Janet Ecker’s staff with the promise of a follow-up meeting with the Minister herself after she’s been briefed on the Flamborough situation. We had also appealed to Premier Ernie Eves for a meeting over Flamborough’s spiraling CVAs and he responded to me in a letter, saying he had forwarded the matter to Ecker. Fortunately, we will certainly have plenty to work with when we arrive at Ecker’s office  – nearly 300 of you e-mailed and phoned in with your CVA figures and that’s precisely the ammunition I’ll need when I meet with her.

That’s The Provincial Problem – What Should The City Itself Try To Fix? There’s a number of “white elephant pet projects” within the city that I personally don’t believe should be in our budget at all. The Red Hill Creek Expressway – possibly the most expensive eight-kilometres of unbuilt roadway I’ve ever heard of – will add another $50 million in debt by 2006. At the moment, the total cost of the expressway, spread over 15-20 years, is $180 million and rising. Hamilton’s bid for the 2010 Commonwealth Games set us back $350,000 and that was just the cost to bid on the games. If we actually “win” the right to host them, our portion of the bill will be another $100 million with the Province and Federal government kicking in equal portions. Now granted, that’s a “prestige” event for the city and there could be sizable revenues that come back to us (though mostly to the downtown core) but if we’re barely scrapping by now, should we be shelling out for a prestige event? I don’t think so.

When Hamilton needs billions of dollars to fix its rotting infrastructure, unneeded highways and high-profile events should fall to the wayside. Anyone looking at the front page of the January 22 Hamilton Spectator should realize that. A deadly combination of bitter cold temperatures, underground frost and old age caused a 76-year-old watermain to split and flood a huge portion of downtown homes and businesses. That was the most recent example of Hamilton’s decaying infrastructure but I suspect it won’t be the last.

In Closing: This can hardly be considered a “good news” newsletter and I apologize for that. But our financial situation is dire and I need Flamborough residents to speak loudly against the inequities we are facing, particularly at the Provincial level. I will continue to battle at Hamilton Council against costly initiatives, such as the Red Hill Creek Expressway and the Commonwealth Games bid but we need that Provincial cash to survive. Let’s work together.

Sincerely,

Margaret