Ten years is too long to impose a special property tax levy on Guelph homeowners, Mayor Cam Guthrie said Thursday night.
Staff presented council with details on a proposed 10-year, 0.5 per cent annual property tax levy during a five and a half hour meeting on the 2017 capital budget.
For Guelph homeowners, the levy would mean an extra $5 annually on their property taxes for every $100,000 of assessed property value. For example, a home assessed at $400,000 would result in an extra $20 on their annual property taxes.
Guthrie didn’t express any criticism of the amount of the levy, just its length.
“I’ll say right now that I’m not happy about 10 years,” Guthrie said at the end of the meeting when he mistakenly thought the amount and length of the levy were two separate recommendations.
Council accepted Thursday’s staff report and will deliberate the proposed levy on Dec. 7.
The money raised through that levy, $1.1 million in the first year, would be placed in a special reserve fund to be used to address the city’s severe infrastructure backlog, estimated at some $165 million overall.
Council heard that the levy won’t solve Guelph’s infrastructure woes, but it’s a step in the right direction.
“The city simply does not have enough available funding for what we want to achieve,” Chief Administrative Officer Derrick Thomson said.
“This problem was not created yesterday and it won’t be solved tomorrow. It took generations to get here; it will take generations to fix it.
”But it’s fixable and we need to start now,” Thomson said, adding that the levy was not “a magic wand.”
“We can do something different or we can do the same thing as previous councils and stay on the same path that led us here today.
A lack of attention to infrastructure renewal for many years was the problem, Thomson said.
Council was across the board in its reaction.
Coun. Mark Mackinnon said “doing a levy is responsible and 0.5 per cent is something. I’ll take it.”
Last year at budget time a 2 per cent levy was floated, but rejected.
Coun. Andy Van Hellemond said he was he was excited to see the city is trying to address the problem of infrastructure funding and pointed out that on a $500,000 home it meant $2.08 a month.
Coun. Bob Bell, the only councilor to vote against the report, felt that while there was a need to address the infrastructure backlog, but was concerned that an infrastrucutre levy could fuel spending on the operational side of things.
Bell blamed staff for helping create the infrastructure issue for not addressing the problem in previous years and increasing operational costs.
That drew criticism from the Mayor and other councilors, who all pointed out that it was council that made the decisions, not staff.
Coun. Cathy Downer called the 0.5 per cent a “modest recommendation” and said Guelph wasn’t unique in trying to deal with the issue of infrastructure underfunding.
“This is not just Guelph, it’s all across Ontario, all across the country. This is not a Guelph issue,” Downer said.
The total 2017 capital budget presented Thursday totaled $59.4 million.
The levy, if implemented, would be evaluated annually.
Deputy CAO Mark Amorosi told council that there were other possible revenue sources that could be put towards the infrastructure and other capital needs of the city.
But he also pointed out that there were other reserve funds that were in need.
“We need to start somewhere,” Amorosi said.
Greg Clark of the city finance department said it was important to have a reserve fund dedicated to infrastructure because it would be needed to qualify for future provincial and federal government grants.
“We risk not taking advantage of other levels of funding if we don’t have funds,” Clark said.
He added that raising money to do work now could save five or 10 times that amount down the road if the work isn’t done.
There were four public delegates on the issue, three of them opposed to the proposed levy.
Susan Watson supported it but urged council to "identify the big leaks" and be more responsible financially.
Pat Fung said council needs to cut operational expenses, like other municipalities had done.
Glen Tolhurst urged council to “preserve home ownership and reject the levy.”
Rena Akerman said that while 0.5 per cent might not seem like much, it is a lot to people living on fixed incomes.
“It will accumulate and be compounded and it will have an impact,” Akerman said.
