$286 Million Hamilton Capital Budget deferred to January

Hamilton City Council took a detailed look at the tax-supported capital budget Monday, and decided to defer approval of the budget until a meeting in January to allow new councillors some time to study it and question staff. The cost of the tax-supported budget shows up directly on the household tax bill. The cost of providing water and wastewater services shows up on the monthly utility bill. Staff are recommending a 2023 capital budget of $286 Million which is $100 Million less than the current year. Three quarters of the budget will go towards keeping existing infrastructure in a good state of repair, one quarter will support new growth. The ratio of new growth spending will increase to 37 percent over the next three years.

$102 Million of the capital budget will be transferred from the operating budget. Subsidies, mainly from  senior governments will provide about $70 Million. Fees paid by developers will kick in $40 Million. The remainder will come from city reserves or debt.

Highlights:

• Hamilton’s debt is currently $900 Million (2023). It will double to just under $2 Billion in 2028-9 before starting to decrease.
• Debt cost will increase from $63 million to $98 million over the same period.
• By 2026 Hamilton will exceed the council imposed debt limit for Development Charges financed debt at which point council permission will be required to increase debt levels. Development charges pay for new roads, sewers and water service for new growth areas.
• The tax supported debt limit will hover just below the 60 percent limit set by previous councils.

The budget calls for significant investment in infrastructure for the Airport Employment Growth District. In all $45 million will be spent by 2026 to expand Garner Road to the Airport.

Some new councillors questioned the extra roughly $1 Million that is paid to each of the old 8 wards in lieu of a small tax decrease, as a result of area rating. Councillor Tom Jackson said that in his ward he used it to pay for capital works that otherwise would have been added to the city-wide budget. He argued that in so doing, he reduced the wait time for capital projects in the suburban wards who do not get the subsidy.

Overall the capital budget will account for about a 1 percent tax increase.

The staff presentation deck can be seen here.