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2024 Rate Budget Approved

December 20, 2023

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The City of Hamilton has two distinct budgets that require Council approval: the Operating and Capital budget (funded by your property taxes), and the Rate budget (paid by your municipal water bill), which covers the costs for sanitary and storm sewers, and municipal drinking water. Deliberations for Operating and Capital Budget will begin in January, but the Rate Budget was finalized and approved by Council on Wednesday, December 13. The following is a summary of the Rate Budget.

 

The 2024 rate increase was approved at 10.04%. You may recall that, a year ago, the City forecasted a 10.04% increase for 2024, so on the surface, it would appear that the budget is exactly as expected. That is true, but it was not a straightforward process. Over the past year, the impact of the Province's Bill 23 (i.e. the downloading of costs to municipalities) added $17 million to our water budget and that meant the increase to your water rate would need to be doubled to 20%. The Mayor, recognizing the potential significant financial impact to Hamiltonians via the 2024 budgeting process, gave City staff direction to aggressively examine options to reduce 2024 increases. A high-level summary of available options to reduce increases include: a) drawing on emergency financial reserves, b) issuing long-term debt c) finding operating efficiencies d) prioritization or reduction in services levels to match our Term of Council Priorities, and e) soliciting financial support from upper levels of government.

 

The City has used reserves and found efficiencies to reduce the 2024 rate budget by $17.55 million and maintain the projected 10% increase. The percentage increase and annual dollar impact for an average residential customer can be broken down as follows:

  • 2.39% ($20.95) by the City of Hamilton to cover the costs of replacing or rehabilitating aging infrastructure, program delivery, and absorbing the impacts of inflation.

  • 7.65% ($67.05) attributable to the Province of Ontario and changes in provincial legislation, including the More Homes Built Faster Act (Bill 23). This bill transferred much of the cost of growth that helps build water and sewer infrastructure from property developers to municipalities.

 

It's important context to know that Hamilton currently has one of the oldest water and sewer systems in Canada and our infrastructure in the lower City dates back to the mid-1800s. We have the second-oldest drinking water system and third-oldest wastewater system in Canada. Historically, we have underinvested in these systems and Council has approved plans to, over the next decade, ensure we continue to receive the level of service we have all come to expect.

 

SAVINGS

I often receive feedback that the City should offset tax and rate increases by finding efficiencies, so I am happy to share the following numbers.  Here is a summary of the excellent work City staff have done to reduce costs for the Water budget, saving over $21.5 million every year. $4.47 million of that amount is new savings based on recent decisions.

  • Insourcing utility locates program, rather than using contractors, to fulfill legal requirements before commencing work that may impact underground infrastructure will save approximately $3.3 million every year starting in 2025.

  • Contractual savings from insourcing wastewater analytics, and stormwater services will save $275,000 each, totaling $550,000 in annual savings.

  • The 2024 Operating budget review identified $620,000 in savings

  • Using trenchless technologies to rehabilitate pipes saves the City $13 million annually

 

  • Operating the City’s wastewater treatment infrastructure during off-peak hours, where possible saves $3.1 million annually

 

  • An in-house program to replace lead water pipes on private property saves $620,000 annually

 

  • Proactive leak detection program has saved an average of $358,000 annually since 2019

 

QUICK FACTS

  • Hamilton's system currently has a combined 5,266 kilometers of water and sewer pipes and more than 250 separate facilities with a total value of over $14.6 billion ($4.25 billion of water, $3.14 billion of stormwater, and $7.25 billion wastewater assets). Approximately 146 kilometers of water and sewer pipes are identified for major repairs or replacement in the next five years.

  • The 2023 average residential water and sewer bill in Hamilton was $877. The 2024 average residential water and sewer bill will increase to approximately $965, and even with the 2024 increase, our rates will remain among the lowest in Ontario.

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