City wrestles with $15 million deficit

News Oct 15, 2009 Ancaster News

Hamilton politicians are staring at a projected $15 million

deficit, which translates into a possible 6 per cent average tax increase in

2010.

The deficit is caused by three main areas, a higher social

services caseload, the drop in the recyclable commodities market, and residents

and businesses using less water during an unusually wet summer, said Corporate

Services General Manager Robert Rossini.

Mr. Rossini added that Hamilton joined with other

municipalities across the globe in enduring an economic slowdown that was the

most severe since the Great Depression.

“We are not immune,” he said. “Hopefully we can make (the

deficit) up by the year end.”

Budget projections are notoriously “conservative”, a fact

councillors pointed out this week. Mr. Rossini agreed, saying in the past city

financial staff have projected doom and gloom budget scenarios, but by the end

of the year the problems seem to vanish or are at least mitigated.

Projected budget deficits over the last few years have

ranged from 6 per cent to 12 per cent. Yet, councillors have managed to bring

down the average tax increase to the 3 to 4 per cent range. Councillors have

already established a 2 per cent average tax increase ceiling for the 2010

budget.

A few mitigation efforts that will been implemented to try

and get the deficit down by the end of the year include establishing a hiring

freeze on all non-essential staff vacancies, tighter controls on the city’s

discretionary funding, and dipping into the city’s reserves, even though those

reserves are dangerously low.

Just like other municipalities, Hamilton has seen its social

services caseload jump because of the economic downturn, at an extra cost of

about $4.3 million to provide the basic needs, including shelter, food and

child benefits to its residents. Waste management is expecting a $3.2 million

shortfall because of a decline in recyclable prices, again caused by the

recession. Other departments with projected shortfalls include risk management

at cost of $1.7 million, a $4 million deficit in debt financing, and a $1

million deficit in transit because of the 4 per cent reduction in ridership.

The deficit will be offset, said Gerry Davis, public works general manager, by

the fuel savings caused by the drop in gas prices.

Mr. Davis also confirmed city staff is looking at

implementing what is being called a “stormwater fee” on landowners who have

asphalt on their property. It was an idea talked about last year by Jim Harnum,

senior director of water and wastewater. City staff has been debating the

merits of the fee, and how to apply it. Mr. Rossini said it could be phased-in,

possibly starting next year.

Meanwhile, there will be a projected $7.6 million rate

deficit in the water and wastewater rate budget because residents and

institutions, especially U.S. Steel, have not been using water. U.S. Steel was

closed for a portion of the year.

City staff will also determine the “actual cost” of its

social services downloading monies that the province should be providing

Hamilton. City financial officials incorporated a $16.5 million provincial

funding allocation into the 2010 budget for social services, which is about

what the province has been giving the city each year in special funding to

offset its rising social service costs. But due to the increasing number of

people on social service programs, the funding provided by the province should

be higher, possibly in the $20 million range 

If the province does not provide the funding, it would mean

an additional 1.1 per cent tax increase to taxpayers.

City wrestles with $15 million deficit

News Oct 15, 2009 Ancaster News

Hamilton politicians are staring at a projected $15 million

deficit, which translates into a possible 6 per cent average tax increase in

2010.

The deficit is caused by three main areas, a higher social

services caseload, the drop in the recyclable commodities market, and residents

and businesses using less water during an unusually wet summer, said Corporate

Services General Manager Robert Rossini.

Mr. Rossini added that Hamilton joined with other

municipalities across the globe in enduring an economic slowdown that was the

most severe since the Great Depression.

“We are not immune,” he said. “Hopefully we can make (the

deficit) up by the year end.”

Budget projections are notoriously “conservative”, a fact

councillors pointed out this week. Mr. Rossini agreed, saying in the past city

financial staff have projected doom and gloom budget scenarios, but by the end

of the year the problems seem to vanish or are at least mitigated.

Projected budget deficits over the last few years have

ranged from 6 per cent to 12 per cent. Yet, councillors have managed to bring

down the average tax increase to the 3 to 4 per cent range. Councillors have

already established a 2 per cent average tax increase ceiling for the 2010

budget.

A few mitigation efforts that will been implemented to try

and get the deficit down by the end of the year include establishing a hiring

freeze on all non-essential staff vacancies, tighter controls on the city’s

discretionary funding, and dipping into the city’s reserves, even though those

reserves are dangerously low.

Just like other municipalities, Hamilton has seen its social

services caseload jump because of the economic downturn, at an extra cost of

about $4.3 million to provide the basic needs, including shelter, food and

child benefits to its residents. Waste management is expecting a $3.2 million

shortfall because of a decline in recyclable prices, again caused by the

recession. Other departments with projected shortfalls include risk management

at cost of $1.7 million, a $4 million deficit in debt financing, and a $1

million deficit in transit because of the 4 per cent reduction in ridership.

The deficit will be offset, said Gerry Davis, public works general manager, by

the fuel savings caused by the drop in gas prices.

Mr. Davis also confirmed city staff is looking at

implementing what is being called a “stormwater fee” on landowners who have

asphalt on their property. It was an idea talked about last year by Jim Harnum,

senior director of water and wastewater. City staff has been debating the

merits of the fee, and how to apply it. Mr. Rossini said it could be phased-in,

possibly starting next year.

Meanwhile, there will be a projected $7.6 million rate

deficit in the water and wastewater rate budget because residents and

institutions, especially U.S. Steel, have not been using water. U.S. Steel was

closed for a portion of the year.

City staff will also determine the “actual cost” of its

social services downloading monies that the province should be providing

Hamilton. City financial officials incorporated a $16.5 million provincial

funding allocation into the 2010 budget for social services, which is about

what the province has been giving the city each year in special funding to

offset its rising social service costs. But due to the increasing number of

people on social service programs, the funding provided by the province should

be higher, possibly in the $20 million range 

If the province does not provide the funding, it would mean

an additional 1.1 per cent tax increase to taxpayers.

City wrestles with $15 million deficit

News Oct 15, 2009 Ancaster News

Hamilton politicians are staring at a projected $15 million

deficit, which translates into a possible 6 per cent average tax increase in

2010.

The deficit is caused by three main areas, a higher social

services caseload, the drop in the recyclable commodities market, and residents

and businesses using less water during an unusually wet summer, said Corporate

Services General Manager Robert Rossini.

Mr. Rossini added that Hamilton joined with other

municipalities across the globe in enduring an economic slowdown that was the

most severe since the Great Depression.

“We are not immune,” he said. “Hopefully we can make (the

deficit) up by the year end.”

Budget projections are notoriously “conservative”, a fact

councillors pointed out this week. Mr. Rossini agreed, saying in the past city

financial staff have projected doom and gloom budget scenarios, but by the end

of the year the problems seem to vanish or are at least mitigated.

Projected budget deficits over the last few years have

ranged from 6 per cent to 12 per cent. Yet, councillors have managed to bring

down the average tax increase to the 3 to 4 per cent range. Councillors have

already established a 2 per cent average tax increase ceiling for the 2010

budget.

A few mitigation efforts that will been implemented to try

and get the deficit down by the end of the year include establishing a hiring

freeze on all non-essential staff vacancies, tighter controls on the city’s

discretionary funding, and dipping into the city’s reserves, even though those

reserves are dangerously low.

Just like other municipalities, Hamilton has seen its social

services caseload jump because of the economic downturn, at an extra cost of

about $4.3 million to provide the basic needs, including shelter, food and

child benefits to its residents. Waste management is expecting a $3.2 million

shortfall because of a decline in recyclable prices, again caused by the

recession. Other departments with projected shortfalls include risk management

at cost of $1.7 million, a $4 million deficit in debt financing, and a $1

million deficit in transit because of the 4 per cent reduction in ridership.

The deficit will be offset, said Gerry Davis, public works general manager, by

the fuel savings caused by the drop in gas prices.

Mr. Davis also confirmed city staff is looking at

implementing what is being called a “stormwater fee” on landowners who have

asphalt on their property. It was an idea talked about last year by Jim Harnum,

senior director of water and wastewater. City staff has been debating the

merits of the fee, and how to apply it. Mr. Rossini said it could be phased-in,

possibly starting next year.

Meanwhile, there will be a projected $7.6 million rate

deficit in the water and wastewater rate budget because residents and

institutions, especially U.S. Steel, have not been using water. U.S. Steel was

closed for a portion of the year.

City staff will also determine the “actual cost” of its

social services downloading monies that the province should be providing

Hamilton. City financial officials incorporated a $16.5 million provincial

funding allocation into the 2010 budget for social services, which is about

what the province has been giving the city each year in special funding to

offset its rising social service costs. But due to the increasing number of

people on social service programs, the funding provided by the province should

be higher, possibly in the $20 million range 

If the province does not provide the funding, it would mean

an additional 1.1 per cent tax increase to taxpayers.