‘It’s going to cause a war,’ Ancaster councillor warns of area-rating elimination

It will be up to the next city council to settle Hamilton's decades-long area-rating debate.

Nearing the end of their term, city politicians shied away from deciding whether to axe the contentious tax system overall, wary of the big hit a wholesale shift to the general levy would deliver to rural residents.

Instead, they opted to remove select services from the regime, including recreation, street lights, sidewalk maintenance, sidewalk snow removal and parkland purchases.

But major area-rated levies - most notably, transit and ward infrastructure funds - were left under the system that was adopted with amalgamation 21 years ago.

It's a stepping stone," Coun. Brad Clark said Wednesday after a sometimes charged debate divided along urban, suburban and rural ward lines.

This initial move would avoid saddling rural residents with considerable tax shifts - the bills would be significant" - but still opened the door to a collaborative approach" to wider deliberations next term, the upper Stoney Creek councillor said.

The services that are to be removed from area rating and funded under the citywide levy will result in an average decrease in tax bills of $2 for urban residents, while rural ones will see an average hike of $14 to $19 this year, staff noted.

Area rating is a revenue-neutral tool that distributes the burden of municipal taxes based on service levels and where properties are located in the city.

It's divided along rural-urban lines and the former borders of the old city" of Hamilton, which merged with Stoney Creek, Ancaster, Dundas, Glanbrook and Flamborough in 2001.

In 1999, special adviser David O'Brien recommended area rating for only fire and transit services. But upon amalgamation, more services were included before the city settled with the current mix.

Those eight services make Hamilton a lone wolf, noted finance staff's scan of 13 other municipalities that showed none had more than three location-based levies.

The differences that ushered in area rating have blurred, staff have pointed out, noting data show residents travel up to 13 kilometres to reach recreation centres, which are also planned for rural areas. And parkland, for instance, is accessible for all residents" across the city.

During Wednesday's budget session, council debated the merits and weighed the impact of phasing out all area rating over four-, six-, eight- and 10-year periods.

Not all welcomed the exploration, including Coun. Lloyd Ferguson, who argued eliminating the system would create a winner and loser" dynamic based on geography.

Buses, for instance, either run empty or not at all in different parts of his Ancaster ward, he said. It's going to cause a war and I would just like to keep the peace."

There are winners and losers," Coun. Maureen Wilson agreed, but the west-end councillor argued the current system isn't fair" for residents in wards 1 through 8, where household incomes lag behind wealthier parts of the city.

Transit advocates have called for HSR to be added to the general levy as a way to improve the service across Hamilton. Staff noted that possibility is also tied to an ongoing transit (re)envision" exercise.

A hybrid taxation option for transit could offer an exemption for the truly rural areas" but include urban and urbanized parts of the former municipalities, suggested Coun. John-Paul Danko.

I would be open to that kind of compromise," the west Mountain councillor said.

Coun. Sam Merulla, who also spoke to the benefits of adding transit to the general levy, recalled bad blood around the city hall horseshoe in the early post-amalgamation days.

It was pretty hate-filled toward the inner city," said the veteran east-end councillor who's retiring at the end of this term. But Merulla urged his colleagues not to repeat history" and do the right thing."

Mayor Fred Eisenberger called finance staff's recommendation to shift the handful of services to the general levy a step forward that we should all seize and appreciate."

But Coun. Judi Partridge, citing concern over a spike in Flamborough taxes, rejected the proposal.

So the rural community will be picking up those costs, but they won't be receiving those services."

Finance staff's recommendation, supported by a strong majority of council in the end, will see area rating for sidewalks, street lighting and recreation phased out over four years starting in 2022.

Sidewalk snowplowing, meanwhile, switches in 2023, and is tied to a decision to offer city service along transit routes throughout Hamilton and not just in Ancaster.

Parkland purchases will be shifted to the general levy once the city pays off internal debt related to green space transactions made under the policy.

Firefighting, which is provided through an urban-rural model and full-time, volunteer and composite services, will be examined further for a potential shift in 2023.

Teviah Moro is a reporter at The Spectator. tmoro@thespec.com