Hamilton councillors delays voting on proposed 10.4 per cent water rate increase

Hamilton councillors at their Nov. 21 budget meeting, deferred by an 11-5 vote a proposed water rate increase of 10.4 per cent until their Nov. 27 budget meeting. The reason for delaying a vote on the water rate increase was to give several councillors time to digest the proposed hike that will boost the average homeowner’s water bill by $88.10 — to $965.40 from the current $877.30.

“I’m hoping to have a deferral,” said Stoney Creek councillor Brad Clark. “It is confusing to me.”

In 2023, councillors approved a water rate increase of 6.49 per cent, or about $53.47 to the average homeowner’s water bill for a total cost of about $877. In 2022, the water rate hike was 4.98 per cent.

Councillors are also staring at a proposed 14 per cent tax increase for 2024. In 2023, councillors approved a 5.8 per cent tax hike, the largest since amalgamation in 2000.

Hamilton water officials had been projecting a nearly 10 per cent water and wastewater increase for several years starting in 2024. But in a presentation in September, Mike Zegarac, corporate and finance services general manager, revealed to councillors the water financial plan included an initial rate increase of 19.79 per cent.

Zegarac placed the blame for the higher water rate on the province’s controversial legislation, Bill 23, the More Homes Built Faster Act. The reasoning was due to Ontario’s decision to exempt development charges for builders, estimated to remove about $5 billion from Ontario municipal coffers. The impact on Hamilton this year is about $27 million, with an estimate that the total impact over the next three years is about $54 million in reduced revenue.

You might be interested in

• Dec 31, 1969
• Comments

• Dec 31, 1969
• Comments

Bill 23 freezes, reduces and exempts fees that developers pay on certain buildings, such as affordable housing, which municipalities use to pay for important infrastructure projects such as roads, sewers, parks and recreation centres.

Officials project water rate increases of about 10 per cent each year over the next decade in order to fund infrastructure upgrades.

“The simple story is we need to make some very significant investments in the city water and wastewater infrastructure,” Nick Winters, director of water and wastewater, told councillors.

Brian McMullen, director of financial planning, said staff managed to reduce the water rate hike by taking $13 million from reserves, completing about $46 million capital projects freeing up additional funding, while delaying about $82 million in capital projects until future years. In addition, the city will apply to the province for $4.6 million under the Building Future Fund.

But Zegarac said accessing that fund could be a “risk” because the program “has not been finalized” by the province.

He said the city will still be forced to use about $7 million in reserves in 2025 and another $1.3 million in 2026 to mitigate potential water rate increases. Zegarac said about five per cent of the 10.4 per cent water rate increase is because of the province’s impact of Bill 23.

Finance officials said Mayor Andrea Horwath urged staff to use the city’s reserve fund and debt reallocation to reduce the water rate increase on homeowners.

The proposed 2024 water rate budget includes $121 million in operating costs, an increase of about 11 per cent from last year, and includes adding 24 new full-time employees, while spending $286 million in capital costs.

Councillors pointed the finger at the provincial government for the higher water rate, which has forced municipalities to pay the province’s cost of building more homes.

“I’m not prepared to support it today,” said Mountain councillor Tom Jackson. “(Residents) know it will come out of their sole, single pockets.”

Dundas councillor Alex Wilson said the city has a “long, long road” to correct past decisions made by councils that failed to improve the city’s aging water infrastructure.

“I’m confident this is the right rate plan,” said Wilson.

Winters said asset management reports have identified the city has underfunded improving the water, wastewater and stormwater infrastructure by about $101 million each year.