New Council faces three months of heavy budget deliberations

John BestJanuary 2, 20231 Mins read833 Views

The new Hamilton Council will get down to brass tacks next week as it considers the 2023 budget. Right now staff have prepared a budget, that if passed would see the city spending 2.6 Billion in combined operating and capital costs. Roughly $530 million of that is recovered in water bills and other user fees leaving over 2 Billion to be covered on the property tax bill. In a report staff point to a litany of pressures that are driving up costs including:

COVID continues to add to costs. Transit has not recovered pre-pandemic ridership, the Health department incurred extra costs operating vaccination clinics, and providing temporary housing. This comes at a time when COVID cash from senior governments is drying up. The city has managed to squirrel away over $30 million from funds supplied but not spent in 2020-and 2021, but staff don’t know how long that money will have to last.
Inflation, especially for fuel, contracted services like waste removal and other supplies
Wages, with low unemployment, the labour market has become much more competitive. Staff are being enticed with higher wages and being allowed to work from home. The city is having trouble filling some positions through a lack of qualified candidates.
One look at the condition of roads in the city shows the degree of the deficit in keeping infrastructure in a state of good repair. The city is trying to play catchup, but the deficit is approaching $900 million. The city has doubled funding in an effort to make a dent in the backlog.
There is a growing gap between the province’s funding of Provincially-mandated services, (health, social services) and the actual cost of delivering the services.
$17.7 million will be needed to cover increased employee costs due to contractual agreements and the increased cost of pensions and other benefits.
With the increased cost of borrowing, the city will pay nearly $66 million in debt interest in 2023

The proposed budget estimated that Policing would come in at $189 Million, but the Hamilton Police services board has already approved an ask of $196 million, meaning an addition $7 Million will have to be found somewhere.

Towards the end of January, the city departments will make budget presentations to council, followed in early February by public delegations. Staff are targeting March 29^th for approval of the operating budget.