Strategic Planning and Budgets Committee

 


May 5/04 Report
1:40 to 2:37 pm

Highlights:

  • 2003 Variance Report showing a surplus of $1.7M - the timing of the release of this information in light of the budget process just finished.
  • 2004 Final Tax Policies showing, among other things, new tax rates and area ratings (no change in area rated services from 2003, and that area rating levy accounts for 21% of total municipal levy).
  • Dollars spent for projects through the Opportunity Fund appear to not reflect the original intent of the fund.
  • The issue of Harmonization vs. Area Rating of taxes flares up.
  • Suburban vs. Urban Ward representation - representation by population? Review requested

Attending:

Councillors:
Members: DiIanni, Collins, Merulla, Jackson, Kelly, Ferguson
Non-Members: Pearson, Braden, Whitehead

Staff:
Managers: Rinaldo (finance), Peace (acting city manager), Kay (emergency services), Coveyduck (planning), Priel (social services), Graham (human resources). No public works. 4 other staff

Press: None

Public:
No public.

http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/May05/Agenda.pdf

2. Changes to the Agenda: There were changes but the clerk didn't have her microphone on. Paper 'walk-ons' (not included in the web posted agenda ahead of time) include 4.1, 8.3,8.4,8.5,8.6.

4.1 Delegation Requests: 'At the suggestion of City Councillors who are also members of the HECFI Board, Mr. Fred Deys to appear before the Committee to discuss the KPMG Operational Review and the City's timelines.' Motion to approve: CARRIED

8.1 (1:40-1:50)

Capital Budget Variance Report, as of December 31, 2003

http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/May05/FCS04060%20
Capital%20Variance%20Report-DEC%2031,%202003.pdf

RECOMMENDATION:

(a) That the December 31, 2003, Budget Variance Reports (attached as Appendices A, B and C to Report FCS04060) for the tax levy and the rate supported capital projects be received for information.

(b) That the General Manager of Finance and Corporate Services be directed to

close the completed capital projects, as listed in Appendix D to Report

FCS04060, and that the net surplus of $3,300,404 be allocated (as shown in

Appendix D to Report FCS04060 - Summary of Net Funding Sources).

(c) That a Leash Free Parks reserve be established and funded from the one dollar ($1) per dog license tag sold, and used to fund the development of dog park facilities and free running areas (as outlined in Appendix A of Report PW03067).

 

Collins: "On 8.1, I'm looking at the net surplus and the reallocation. But appendix 'D', is that included in this report? (Rinaldo - yes) I'm looking at the WIPS (works in progress), where is the appendix D?" (hard to find) Rinaldo : ".at the very end of the report. These are projects that we are recommending to close". Collins : "So we're closing all of these accounts and transferring those, in most cases, to the capital levy reserve, is that correct?" Rinaldo : "It's a combination. For example the first page, the sanitary sewer capital reserve, that's going back to water.wherever the original source of funding came from". He gives other examples. Collins : "And the other projects that are listed in appendix 'C' and 'B', those are current WIPS that we have, is that correct?" Rinaldo : Yes. Report gives status of all projects on the books.

Braden : In the variance reports, if a particular line was vastly overspent for good reason and we took monies from another account because it was deemed appropriate. Would the budget line - let's say we overspent it by 100% - would those be the figures we show if we overspent it by 100%, or because we got it from another account, and between the two accounts it was even. How is that illustrated in these figures? Rinaldo : "Only when we have a.. If the department head comes forward to Council for reallocation, at that time we reallocate the budget - only when Council approves it. .There's a little bit more flexibility within the Road program because Council developed the policy on a block basis as opposed to an individual project basis.." Braden : "Second question: when you look at the whole report and you look at 'A' and 'B' everything makes sense. When you look at 'C' we're suddenly looking at a leash-free dog park reserve. Without being facetious is this a bit of an afterthought, or is this convenient? What the dollar for the dog leash doing in there with a variance report?" Rinaldo : "It was just the process of ah, Council approved using $1 per license to be set aside for that purpose. We're just formally requesting Council to set up the reserve - it really has nothing to do with appendix 'C', quite frankly. Brade n: ".presuming if it's a reserve it's for more leash free parks. Is there anything that we don't see in here that suggests that we're spending monies from some other source for leash free parks that I can't read into that report? In other words, am I paying some other taxes other than my dog licence for these parks?" Rinaldo : ".I'd have to ask the department.as far as I know, no, but it could possibly be different in other programs in other areas". Braden : "If it's different than what you say Joe, would you just email me and tell me?"

Merulla : "So, the total surplus is how much at this point? Staff: Joe Rinaldo (finance) : ".the surplus on the projects we're closing is $1.7M - $3M, but when you take the debt it's $1.7M". Merulla : "I noticed that Parkdale Park's included in this, but we had established the Red Hill Valley Expressway Fund, and I'm wondering why that's the case? Rinaldo : "Which project is it?" Merulla: "Parkdale Park". Rinaldo : ".We haven't taken that money, the funds in there are still left in that project". Merulla : "And on that RHCE Fund - last week we'd spoken about it - there was $100,000 surplus give or take?" Rinaldo : "Yes, there's still $100,000 available - still left in the reserve". Merulla : "Can we get a report on that? I know that the majority of that is dedicated for Ward 4 ( Rinaldo : "That's right".) but I have a number of projects, particularly surrounding Parkdale Park to deal with, and I'd like to know what the status of that is". Rinaldo : "We can do that".

Collins : "Mayor, I'm trying to find someone in the audience from Public Works, but I.. If you recall during the budget process, we had a phase in of materials and public works related infrastructure projects: road and sidewalk, annual programs related to public works activity. And when I look through the report here, for instance annual new sidewalk replacement.those waiting lists for those programs are pages and pages long. Here we are taking the excess money that we have from those programs and putting it into the capital levy reserve. Are there opportunities to place these dollar amounts that are related to public works back into programs where we have a backlog of cases, and a waiting list for infrastructure improvements?" Rinaldo : "Because the funds are being set back into the reserve, yes, Council can then take those funds and reallocate them to another capital project. So, it's staying within that envelope". Collins : "But would it not make sense then to top up the annual program for 2004 with these dollar amounts, to make it easier. We're making one transfer then, rather than making several transfers and going back and trying to trace the dollar amounts and ." Rinaldo : "If you wanted to allocate those to provide additional sidewalk improvements or whatever, that's at your discretion, it's a matter of deciding which project we would proceed with. I'm sure that through your committee you can actually do that, at any time". Collins: "Ok. Mr. Mayor I don't want to hold up the report, but I do want to pursue that issue, so is it possible to take out the roads portion and pass the rest". Rinaldo : That could be done. "The other way - if it's going to the reserve it's simply asking the public works staff to come forward with the report to utilize those funds for sidewalk improvements ( DiIanni talks over him "I'd suggest.", and Collins also "I'm fine with that".) that would achieve the same goal". DiIanni : "I mean the money's in the reserve to be used as we see fit, and.." Collins : "But I'd like for them to come back then with these specific totals.." DiIanni : (interrupting) "Absolutely, they'll probably come back to your committee, alright? The chief wanted to say something". Staff: Glen Peace (Acting City Manager): "I was just taking that as staff direction. Put it back in reserves and we'll report back and you can make a determination on the prioritizing of the sidewalk issue".

Kelly : "Actually, that was going to be my suggestion too. I share Chad's - Councillor Collins' concern about that too. And maybe included in that report, and unfortunately there's nobody here from Public Works, if there can be some determination about whether the work can get done too. I mean, I'm more than happy to put the money in there, but I don't want it to get in there and find out at the end of the season well, we didn't get it done. So then it's a lost exercise. .Include a time frame. Peace : ".See what can be this year and next".

Merulla : "It's the issue of.. This $1.7M.could have been included in the budget discussions and would have saved us, on a percentage basis, about .5%. I'm just wondering why we have this before us now and not last week when we could have made a difference on the actual bottom line?" Rinaldo : "We just completed the reports quite frankly, and we just submitted them as early as we possibly could, quite frankly. The variance reports weren't finished until just recently". Merulla : "Because you could have saved us $1.7M during that budget discussion". DiIanni : "Could have. On the other hand, it'll do work for us as well, so it's the enhanced services too". Merulla : "Yah, but next year though, if we could maybe direct staff to have it before?" DiIanni : "Yes. Variance reports should come before the end of the budget process and that's a good suggestion to make". Peace : "These are capital dollars so you wouldn't want to direct that back into your operating to offset the issues. They're capital to capital". DiIanni : "Not a bad point but I think the issue is if the timing is before, then we have a little more flexibility in terms of how we direct that, so". Rinaldo : "We're getting better in terms of getting that information. We are moving everything earlier - as you know we're trying to do that every year, so hopefully we'll have that next year".

Whitehead : ".In regards to sidewalks and other issues, I'd like to see a presentation done by risk management, so we have an understanding of the current themes in regard to the issues in our community - how it impacts on the bottom line. Rinaldo : "Actually that's an outstanding report for the Corporate Administration committee. We plan on coming forward with a more comprehensive report on that in the fall".

Motion on recommendations for 8.1: Collins/Jackson CARRIED

8.2 The 2003 Final Tax and Rate Operating Budget Variance Report to December 31, 2003 (Unaudited)

http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/May05/FCS04059%20Dec
%20Budget%20Variance%20Report.pdf

RECOMMENDATION:

a) That Report FCS04059, "The 2003 Final Tax and Rate Operating Budget Variance Report, to December 31, 2003 (Unaudited)", be received for information.

b) That the updated 2003 transfers to and from the Tax Stabilization Reserve be confirmed, as per Appendix C to Report FCS04059.

Collins : "Could we have an overview.?" Rinaldo : Gives overview ending with this statement: ".Generally speaking we thought we were going to have a deficit, but with some of the one time revenues that we received we are in a position to say that we're going to have an overall surplus of $3M - of which about $200,000 is City operation excluding the police, storm and library. What he says about the one-time revenues: (e.g. $6.9M Community Reinvestment Fund, and deferred payment of debentures to help balance the 2004 budget "from a cash flow point of view we could do that") ".unfortunately some of these are on a one-time basis but I believe that the 2004 budget addresses many of the chronic issues that we had in terms of 2003 budgets". Collins : ".Out of the issues highlighted in the report, and understanding that we've incorporated many of the new figures into the 2004, are there any areas where we were very conservative with figures for 2004 - we might find some gains for this calendar year, for positive variances?" Rinaldo : Answers re shortfalls . Collins : "On the positive side though, Joe, are there areas where we've been conservative on savings, and we hope to see some higher numbers in that regard - understanding the pressures on the other side. I'm looking at supplementary taxes.we're talking about a $4M figure. It ended up coming in at $5M. Should we have budgeted for $5M for this year?" Rinaldo : "We probably should have, but then in that case we should have increased the provision for tax right-off which would have been an offset, which on an overall basis wouldn't have had a material impact. .should have budgeted about $1/2M more, but I've recommended to staff that we just leave it the way it is for the time being, and hopefully the supps will come in a bit higher than projected and therefore that'll help offset it". Collins : "Ok".

Motion on 8.2: Kelly/Jackson CARRIED

Power Point Presentation (Joe Rinaldo) re 2004 Final Tax Policies showing, among other things, area ratings (no change in area rated services from 2003, and that area rating levy accounts for 21% of total municipal levy).

http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/May05/changes%20to%20agenda.pdf

From the presentation:

At slide # 10 - ' Reduce the rate reduction to first subclass of farmland awaiting development by the allowable annual 10 percentage points (2004 - 35% reduction)' Rinaldo : "The other thing we did - you know that last year - a couple of years ago - Council asked us to make sure that we have land - farmland awaiting development. The legislation has allowed us keep decreasing the reduction that we give - in terms of raw land - we give to farmland. We're recommending that we continue that at 10% again this year, which means that farmland awaiting development, will only get a 35% reduction. Hopefully that creates an incentive for that land to move - ah, to actually get developed, as opposed to sit there idle , and generate some additional revenues for us".

In the context of 'charities' ".continuing to provide the 40% discount that Council adopted over the last number of years and we're recommending a continuation of that. Likewise for vacancies - vacant land in commercial and industrial the rates were set at 30% and 35% since 1998 in Hamilton, and I'm recommending we continue it. Ideally we should probably think about changing that over time, but given the challenges some of our industrial properties are having this year I didn't feel we should recommend making a change this year".

Discussion:

At slide #4: - ' Residential Tax Rates showing each former municipalities different residential tax rates for 2004 from Hamilton at 1.707% down to Flamborough at 1.332% and each other one in between'

Merulla : ".I think the misconception is that somehow Hamilton, for the services we're receiving, we're paying much less than of the suburban areas.Hamilton obviously is the highest when you're looking at that particular category". Rinaldo: "The actual tax is actually higher, but when you look at the assessment in each community.the assessments are higher.. I will try to provide you with that - show you what the actual assessment is vs. the tax rate. There's no question though, that the actual tax rate as part of the amalgamation, as part of the compromise that the City Council did in 2001 you did in fact implement area rating to mitigate the impact of the amalgamation, and that is the result of that - the lower tax rates.." Merulla : "What was that number - for Hamilton -prior to amalgamation?" Rinaldo : ".The average was 1.97% in 1998".

Merulla: At slide 11 ' Other tax policies: Relief to Low-income seniors & Disabled - no change, same criteria' . "In respect to mitigation of impacts on seniors, the vulnerable. If you recall the Opportunities Fund - we set aside a half a million dollars for that.whatever happened to that?" Staff: Jo Ann Priel : "The money was allocated. I'm not totally sure if we spent it all. We just did bring forward a report in terms of that committee - the affordability committee. But there's so many - there's the NCB (?) dollars, there's the Trust dollars and the Target Placement dollars, I'm not sure which one." Staff: 'Mike' (from Finance ?): "The $1/2M was allocated last year to 5 programs. I believe the largest funded one was a food bank ($150,000) for some storage as well as some retraining, and there were a variety of other programs". Report available and "it was approved by Council". Merulla : ".I recall the initial motion I brought forward that money was supposed to assist seniors and people with disabilities who couldn't pay hydro, couldn't pay their gas bills. I'm just wondering.we actually approved that this money be allocated for food banks? Rinaldo : We will circulate the report back to all members of Council for your information. Merulla : "It was during the election perhaps? ( Rinaldo "I don't know") ( Others : "around September) Well that's why perhaps most of us missed it". DiIanni : "The point is we approved the report, so let's have it, and if you want to make some changes we can". Merulla : "But, I guess my initial motion was not pursued with the intent of the motion. DiIanni : "I don't specifically remember your initial motion, but we can't do anything about it now, so lets get the report and if we need to fix anything we'll do that going forward". Merulla : "Ok, thank you".

Collins : re Slide 2-3: Entire assessment? Rinaldo : (re weighted and un-weighted) 'Raw' or 'true' assessment $32.2B. "If we had a uniform tax rate for all classes then we would use this number" The 'taxable' (shifts the weigh to industrial and commercial assessment) is $40B. Collins " I'm looking at $32.2B -that's the raw number. For the purposes of going through area rating we're looking at.$111M in total services for area rating". Rinaldo : "That's correct. But for the purposes of taxation, the weighted taxable assessment is what we are required to use by the province, and that $40.3B is what we use. But if you're talking about the area rating that's the $111M of our $527M budget levy is area rated which is 21%. So one's talking about assessment, and the other one's talking about the tax levy". Collins : "So 21% of our levy supported budget is area rated".

Rinaldo : "That's correct". Collins : "And if at some point in time - I guess the question that always comes up is, you know, how are we phasing this out , how are we dealing with this on an ongoing basis? If we had one uniform rate for that amount of money, what would the shift represent?" Rinaldo : "We did a report last year in terms of the shift . I know it's a fairly significant shift to the outlying.communities.and away from the City of Hamilton. We didn't do an analysis in terms of what it would be for this year.. In a magnitude way it'll be in the same range.. There's no question, it would reduce the tax rate in Hamilton and increase the tax rates in the outlying areas". Collins : "So when do we say from Staff's perspective, understanding that politics are involved as well, but from an affordability standpoint, when does Staff come forward with a report that says, you know, amalgamation is no longer an issue and we're looking at phasing this out over a number of years. How does that work, Joe, in that regard? I don't think we had anything left over from the '74 amalgamation prior to this amalgamation, but at some point in time they would have cut rope and said we're one City with one rate".

Rinaldo : "I can even tell you when it happened there, in fact, because I was there. It took us 5 years, honestly, to phase in the impacts when the region was established. (At this point someone (DiIanni? Jackson?) is pointedly and loudly clearing his throat - signifying dangerous territory?) But, quite frankly, the issue we still have is - as you know every year we have a reassessment update and there's a shift. If you do that and the elimination of the area rating you'd have a fairly significant impact to the outlying communities, but that's really a decision of Council in terms of when we look at it. From my point of view, I was looking for the assessment changes to stabilize, and honestly that would be the time you would need to.." Collins : " I think what riles people the most is when they're looking in the New Homes area of the Spectator, and they open up and it says.$400,000 home in a certain part of the city paying X amount of taxes. They compare it to their own and they say, geez, well, that isn't too far off what mine is, in regards to bottom line contribution for taxes. It really does get back to this whole issue of the differing rates between municipalities. So, do you have plans, understanding the variables you just talked about, to come forward with a report that somehow deals with this? I mean, I don't know.I think we've been fairly patient so far, and if you're to tell me that 2 years from now or a year from now you're to have a plan that shows us how to phase it out, I think most people want to eventually address the issue, understanding it's sensitive. What were your plans in that regard?" DiIanni : "Well, it's a Council decision. Do you have plans as a Staff?" (Joe Rinaldo laughs) Rinaldo : He says he's looking for stability in the assessment changes, and direction of Council, given the sensitivity of the issue. Collins : "If I look to other municipalities that have amalgamated I know that there are still in some areas - Ottawa I know has a component of area rating within their municipality. If I wanted to compare their policies and phase-outs and phase-ins of these types of issues - you could go back to Chatham/Kent - you could go back to find out how they've dealt with that and come back to us with some options and alternatives?" Rinaldo : "Sure, I certainly can provide an update on what the other amalgamated municipalities have done.".

Ferguson: ".I assume that if this report came back on phased out area rating, I would assume that also would include phasing in the fire protection in the rural wards.. Any idea what salaries alone would drive from a part-time 'hall' (?) to a full-time complement? I've heard the figure of a million and a half per 'hall' (?)" Staff: Jim Kay (Emergency Services): Can't say. Ferguson : "15 part-time halls times a $1.5 million, that's would to add the negative side of the ledger if we removed area rating. If you remove the area rating the assumption is that the service would be the same - the rural and.. The same with transit, the same with water and sewers. Those areas that don't have it, don't want it, and don't want to pay for it that's the bottom line. It's not as if they're not paying their share now, it's just we don't need the services in those areas and we don't want to pay for them as well .

Ferguson : Just on slide #3 (weighted taxable assessment pie chart) Joe, the residential to commercial/industrial is 75% to 24%. That's an all time low, or high, however way you want to look at it, isn't it? Rinaldo : "I think it's going down every year, but more importantly, more alarming - if you look at the unweighted number. Its commercial/industrial is 13% of our unweighted assessment". Ferguson : "Do you have a 5, 10, 20 year comparison?" Rinaldo : ".We could try to collect whatever we have on that information. I just don't know how far back we have it readily available. We'll provide you with what we have. Probably back to '98 - the only comparable numbers we would have would be '98." Ferguson : "Is there any way you could go back 30 years, you know, I don't know what purpose that would serve, except to say." Rinaldo : Interjects "I'm sorry, my memory's not that good (laughs). I was here. Yah, we can look at that". Ferguson : "Anyway, that adds more credence to the fact why we have to keep (working on this) for commercial/industrial to take the pressure off the residential tax rate".

Jackson : ".Joe, the seniors tax credit - the threshold is increasing every year - that's based on assessment - so I presume that less seniors then are on the program. Do we know how many seniors are currently on the program?" Rinaldo : "Actually, that helps the seniors to (be?) more, because we keep keeping up the assessment values. The more we put, the more people are eligible. So it helps.. What we're not doing is allowing the re-assessment to actually start decreasing the numbers of people that are eligible. So that's what we're trying to do by increasing the value on that basis.. (As far as numbers) it's 2,500 that are eligible". Jackson : "Secondly, area rating and casinos. If I recall that was a decision to pay off Borer's Creek. How far along are we on that?" Rinaldo : "2006 is the year that the debt falls off, and there's only one other issue - some outstanding issues of expropriation and land acquisition that we haven't finalized that goes back to the Borer's Creek project, believe it or not. Expropriations take 10 years sometimes in projects. So there's an outstanding liability on that, that I don't know how much it is yet.. Hopefully by the 2005 budget I'll be able to tell you where we're on that.. Jackson : "So you're saying that the original date of 2006 might be extended beyond that?". Rinaldo : "Well, . we may need additional dollars to fund that project. But 2006 barring that that's not a problem.is the year that the full amount will be available for, for ah." Jackson : "Coming into our City coffers to be used as Council determines". Rinaldo : "And, about $1M right now is being use to - is area rated. The rest is being used to pay for Borer's Creek". Jackson : "Roughly what are we getting from the casinos". Rinaldo : "$3.5M a year".

DiIanni : "Councillor Collins has left (he was out for 4 minutes), but on the area rating - Councillor Ferguson was starting to talk about it. What's the relationship between area rating and level of service?" Rinaldo (big sigh) "Well, the intent of area rating was in fact where there's a different level of service, to tax different parts of the community on that basis. That's philosophy of area rating, and in one of the reasons that it was developed on that basis. .In the area of fire the good example is the volunteer fire service is a lower cost and that's what was happening and that's the reason it was set up on that basis". DiIanni : "And that's the point that I'd make. If any report were to come around the phasing out of area rating - and at some point it needs to be phased out - but it needs to be tied very directly to the level of service. And so, you know, I attended a meeting with a Waterdown BIA - they're looking at bus service, they're requesting bus service. (wide eyed exaggerated looks - surprise? - from Jackson) As that service enters into the equation obviously you're going to have to pay for it, and the area rating formula." (tape turned over at this point.lost a bit - about recent new improved bus service to Ancaster) Rinaldo : ".that would levy directly against Ancaster - that was last year when they asked for additional services. So that's what would happen on those areas". DiIanni : "But my point, though, is beyond that, as we harmonize - which I think was your point right Councillor (Collins)? As we harmonize right across the municipality and the tax rate at some point is the same right across that will imply very directly that the level of service will be the same right across. The whole purpose of area rating, which was written in the law, was that if you're not using a service you shouldn't be paying for a service and that helped mitigate the tax rates in the outlying areas. So harmonization won't necessarily be cheaper.for any part of the city, if indeed it's going to cost more to provide services.".

Collins : Are there some municipalities out there that have the same level of fire response times for both rural and urban? "We may be getting ahead of ourselves in regards to this debate.but.I don't think that, comparing ourselves to other municipalities, that everyone within the municipal borders would have the same response time for fire". Peace : He gave details of current levels of service and staffing for fire, and mentions that they were directed by the Province to 'area rate' for fire. Collins : "So, (BUT) if I was to go to a community that hasn't amalgamated - you could pick one out of the air - I'm almost sure we wouldn't find a community that has a uniform response time, with a rural and urban setting within it's boundaries. Is there reason to believe that is one out there that has 4 minutes (Hamilton's urban fire response time) for everyone regardless of where you live and what kind of a community you live in - urban or rural?" Peace : He gives as an example Halton, with the volunteer fire-fighting unit in Kilbride, where the response times would be longer. DiIanni : "Um, we'll chat later". (To Peace? Jokingly?)

Whitehead : "Just on the area rating.I think I heard $100M impact? 21%. .I heard that there's choices now whether you want to have a service or not, and the question I ask as the Councillor in Ward 8, do my constituents have a choice to not have services so that they can be area rated?" Rinaldo : (laughs) "No. .legislation allows us to area rate where there is no service., but not by ward.that's not the intent.."

Whitehead : "I think the point I'm driving is that I don't think it's about choices, quite frankly, it's about level of service, and compensating for the level of service that you get. I think eventually that we're going to harmonize and provide services relative to the area. ."

Braden : (no mic on till we called out about it) ".point of view, and pre-amalgamation the selling of amalgamation was 'look we can have any number of tax rates we want from 2-to 500'. I can remember (it was said) that we're going to design the tax system to fit whatever it was. But that's impractical. But what I want to say for the record and this is contentious, rural people I don't think can afford to pay more. We are certainly not interested in asking for more service. I think we can demonstrate fairly clearly.that services are going down in the rural area.. So, I want to say that we don't have an interest in harmonizing, as a sort of a philosophy. What we want to push.is paying for the service we get. .If we area rated golf, I'd be a little bit quieter, or dog control because dog control in the rural area basically pays for itself. Dog control in the urban area leaves quite a bit to be desired. I'm being extremely diplomatic today. Right? So, we're not begging to area rate what goes along with dogs. It is very, very threatening to us, so this is not a laughing matter. Without area rating, farmers are in difficulty. So I think we need to have this debate. We need to have it year after year and hopefully there will always be balanced representation here, because the farm area right now is under.it's having tremendous difficulty. We don't want anyone paying for us, but we do want to maintain the choice of determining an appropriate level of service. In terms of fire, we want to save people.if we loose animals that's just a tragedy - we want to save people. I think in the city you want to save buildings. It's quite a different thing."

Merulla : "Just on the point of equality , I'm wondering - that brings back something that I've been looking into, the representation by population issue of the amalgamation. When exactly - we were supposed to deal with that in our fourth year, I believe, of amalgamation, or, what's the status of that?" DiIanni : "Um, I don't.do we have - was there a plan around rep. by pop., I don't think so, but anyway". Merulla : "Yah, it was actually included." Rinaldo : "It's the.I think it was a set time when it was supposed to be reviewed, I think Councillor Merulla is right. I don't recall when it is". DiIanni : I think that we as a Council have the right to review our own boundaries and our wards at anytime". Merulla : "At the appropriate time I'd like to move a review of that particular issue, based on the original agreement with the province". DiIanni : "Absolutely, I'll accept that motion. In fact I'll accept it now. Go ahead". Merulla : "Moved by myself, seconded by Councillor Collins, that "(interrupted) DiIanni : "Councillor Collins, you're seconding that? Ok." Merulla : "a review " (interrupted ) DiIann i: "to review ward representation for the City" Merulla : "based on the argument of equality that has been brought forward on the area rating" (interrupted) DiIanni : "Leave the last bit, that's part of the debate, but let's just review the ward system, ok?" Merulla : "Ok". DiIanni : "Any questions or comments on that?" Comments made without microphones on, to that DiIanni replies: " This term of Council" and "We'll do that, we'll do that".

Whitehead : "It's also my understanding the Transition Board indicated that in the fourth year ah, recommended a review of the 'rep. by pop'. I know that - it's a sensitive issue, and I understand that in respect to amalgamation. But there's a real issue in our communities relative to the representation vs. the tax dollars that they pay. I mean we hear about area rating - at the same time we're getting hit pretty darn hard on taxes and yet they get less representation vs. the population. I represent over 50,000 people in ward 8, for example, and I don't see the fairness and equality in representing 50,000 people, and yet they only get 1/3 (?) of the say on Council. So, my concern is that at some point we need to deal with that issue". DiIanni : "And that motion will allow us to do that. Any more questions? Comments? All in favour of that? Against? (no) That's CARRIED ".

8.3 Commercial, Industrial and Multi-Residential Property Tax Capping for 2004 : This was 'walked-on', it was not on the website agenda ahead of time, but can now be viewed at:

http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/May05/
FCS04073%20Comm%20Ind%20MR%20capping%20for%20200.pdf

Staff Recommendation :

That a By-law setting out the percentages by which the 2004 tax decreases (Clawbacks) for Commercial, Industrial & Multi-Residential Properties shall be limited be submitted to Council for approval.

DiIanni : "Item 8.3 then, may I have a motion on the - moved by Jackson, seconded by Merulla, all in favour that's CARRIED ".

8.4 2004 Residential Tax Phase-in Options: This also was a 'walk-on'.

http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/May05/FCS04072_2004%
20Residential%20Tax%20Phase-in%20Options.pdf

Staff Recommendation :

a) That the Existing Residential Property Tax Phase-in Plan adopted in the 2003 taxation year be continued;

b) That the 2004 Residential Property Tax Phase-in Plan be modified in accordance with option two set out in Report FCS04072; and

c) That the net surplus in the 2004 Residential Property Tax Phase-in Plan on

December 31, 2004 be transferred to the Tax Stabilization Reserve.

DiIanni: ".On the tax phase in options, moved by Ferguson, seconded by Collins, that's - question? Yes sir".

Jackson : ".Joe, in 'c', do you know roughly how much is in the tax stabilization reserve, and much we hope to put in if we approve this item, roughly?" Rinaldo : "The tax stabilization fund currently has about $444,000, if I recall the number. The amount will vary depending on appeals and, you know, what happens throughout the year, but I think it'll be in that area, ( Jackson interjects "you're projecting".) plus or minus $100,000 give or take ( Jackson interjects "that's all?") - it's not going to be a large amount". Jackson : "Over and above the 444?" Rinaldo : "Over what's there. On this one here. But it's - again it all depends on what happens during the assessment and appeal process during the year, cause that changes the phase in numbers all the time". Jackson : "But you're also a predictor as well Joe, so thank you".

DiIanni : "We have a motion then on the recommendations moved by Jackson, seconded by Ferguson, all in favour, that's CARRIED ".

8.5 Tax Policies and Ratios : Also a 'walk-on'.

http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/May05/FCS04071%202004%20
Tax%20Policies%20&%20Ratios.pdf

Staff Recommendation:

a) That the following optional property tax classes be confirmed for the 2004 taxation year: . New Multi-Residential . Parking Lot & Vacant Land . Large Industrial

b) That the following 2003 transition ratios for the purpose of mitigating reassessment tax shifts be applied, and that the corresponding Council resolution be forwarded to the Ministry of Finance: Residential 1.0000 Multi-Residential 2.7400 Commercial (residual) 2.1770 Parking Lot & Vacant Land 2.1770 Industrial (residual) 3.5847 Large Industrial 4.2035 Pipeline 1.5154 Farm 0.2250 Managed Forest 0.2500

c) That the following 2004 final tax ratios be approved: Residential 1.0000 Multi-Residential 2.7400 New Multi-Residential 1.0000 Commercial (residual) 1.9800 Parking Lot & Vacant Land 1.9800 Industrial (residual) 3.3338 Large Industrial 3.9093 Pipeline 1.5154 Farm 0.2250 Managed Forest 0.2500

d) That the following tax reductions be approved: Vacant units and excess land subclass (residual commercial) 30% Vacant units and excess land subclass (residual industrial) 35% Vacant units and excess land subclass (large industrial) 35% Farmland awaiting development (1 st subclass) 35% Farmland awaiting development (2nd subclass) 0%

e) That the City of Hamilton continue to provide a tax deferral option for eligible low-income elderly and disabled persons.

f) That the City of Hamilton continue to provide a tax exemption for Legion's and Veteran's Clubs further to the three-year extension approved in 2003 (2003 - 2005).

g) That the City of Hamilton continue to provide 40% tax rebates for eligible charities and similar organizations.

h) That the City of Hamilton continue to provide a Senior's Tax Credit program for 2004.

i) That the City Solicitor & Corporate Counsel be authorized and directed to prepare all necessary by-laws, for Council approval, for the purposes of establishing the tax ratios and related tax policies.

DiIanni : ".May I have a motion on that? Jackson, seconded by Merulla, that's carried".

(question off microphone)

Rinaldo : "The amendment, just to clarify for Council. As you know we didn't shift the assessment impacts from the commercial/industrials to the residential and as a result of that the Province just requires us to pass that resolution, confirming that that's what Council elected to do. Because we use that to reduce the impact on the residential class".

DiIanni : "Ok, sorry, I was chatting. We need an amendment on the amendment, Councillor Merulla, Councillor Jackson, all in favour that's CARRIED . On the main recommendation then, 8.5, Jackson/Merulla, that's CARRIED .

8.5 2004 Area Rating Tax Policies: Also a walk-on.

http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/May05/FCS04070%20-
%202004%20Area%20Rating%20Tax%20Policies.pdf

Staff Recommendation :

That the 2004 area rating service costs and other financial adjustments, as contained in Appendix One to Report FCS04070 be approved.

DiIanni : ".Item 8.6 respecting area rating tax policies, Jackson, seconded by Merulla, that is CARRIED - against? (no) - that's CARRIED.

Any motions or notices of motions? Seeing none, thank you.

Motion to adjourn. Ferguson/Merulla, all in favour CARRIED. Thank you very much - appreciate that".

Meeting adjourned 2:37 p.m.

ng fruit". DiIanni confirms 5% off levy. Collins wants to know what reserves are spared etc. Jackson asks what 5% equals in dollars - $150,000? - and asks if more do-able? Rinaldo states that this budget has already been reduced by 10% ($200,000).

Motion (Jackson): CARRIED

Dental:

Jackson asks about the implications of eliminating $130,000. Staff ('Dorothy' from HR?) there would be some changes in service delivery - some clinics would be closed and the clients would get their treatments at private dentists. Regarding #2 - the $24,000 - 'optional work' would be declined. Jackson questions "so, most marginalized wouldn't be...

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