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1 per cent infrastructure levy back under the microscope

Some councillors feel the city isn't doing enough to help the public understand the full effect over 10 years
20160201 Guelph City Hall Sign KA

The city’s 1 per cent tax levy aimed at reducing its infrastructure backlog went back under the microscope at council during a budget meeting on Wednesday.

That special levy was approved last year for a 10-year period, but it gets reviewed each of those years. It could potentially increase, it could decrease, it could get removed.

At least one councillor went so far as to say city staff weren’t being clear in explaining the full impact of the levy to taxpayers.

Coun. Dan Gibson estimated that over 10 years the levy will cost the average $1,000.

Currently staff is recommending a 2018 budget that would see a 4.83 per cent increase in property owner’s taxes next year. That includes the 1 per cent levy.

Council will decide the final tax rate on Dec. 5.

The problem, some councillors felt, was that because the previous year’s 1 per cent levy gets rolled in to the tax base the next year, people aren’t being given the true cumulative effect of approving the levy each year.

“You need to be clear and explain the other side of the equation,” said Coun. Bob Bell, referring to the 10-year cumulative effect.

“The city has done a good job showing the need… however it’s unclear to the community what the implications of an extra 1 per cent every year for 10 years is on their tax bill,” Bell said.

He and others want to see some numbers that show how much the levy will cost for the full 10 years.

“I don’t think that’s been clear” to the public, he said. “I don’t think there’s been enough clarity provided on that.”

Mayor Cam Guthrie said it wasn’t a matter of transparency, but of identifying the infrastructure levy better for ratepayers.

Coun. Christine Billings backed up Bell’s argument about the levy being somewhat hidden.

“I really thought we were going to keep the two things separate: a base budget and then another line item with the levy and we were going to keep that separate as well, so that every single time there was an increase, that total line item would be there,” Billings said.

“Nothing would be getting rolled in, because then it disappears, right?” Billings asked city staff.

Staff said they would look at a way of addressing the issue of making the levy better explained on tax bills and bring it back to council.

Coun. Karl Wettstein said there might be an assumption amongst the public that the levy will be removed in 10 years and people will see their taxes go down by $1,000 “and I don’t think that’s what we’re saying here.”

“I think we need to be transparent on that front,” Wettstein said.

Kealy Dedman, the city's general manager of engineering/capital infrastructure, said that the $220 million backlog on the tax-supported side will continue to grow unless it is addressed, and capital work needed in the city will be delayed.

“This may sound like a big number, but so is the scale of the backlog,” Dedman said of the 10 per cent being added to taxes over 10 years.

Gibson asked about a detailed list of the city’s infrastructure backlog.

Dedman said there were “hundreds” of projects on the list. The city’s capital asset plan details the areas those projects are found in – from sidewalks, parks and bridges to city-owned buildings and roads.

“Our current level of funding for residential roads would not allow us to go in and reconstruct some of those residential roads for another 40 to 60 years,” Dedman said. “That’s the impact we’re looking at at this time.”

Gibson said that there are limitations to the city’s asset management plan, which arrived at the infrastructure backlog figure, that some of the infrastructure needs are based on theoretical and projected life-cycles of city assets.

The public has its opportunity to speak on the tax-supported budget, including the 1 per cent levy, on Nov. 22.