Ratepayers in Kenora may get a bit of reprieve. Then again, a vote on water and sewer rates may also cost them.
During yesterday's city council meeting, finance chairman Dan Reynard encouraged his colleagues to be patient and take it one step at a time, when voting on two years' worth of water and sewer rate increases.
Instead of passing a resolution that called for increases of eight per cent and 5.5 per cent for 2018 and 2019, council agreed to split the increases. While the eight per cent increase for January 1 will go ahead as planned, they left the door open for revisiting the rates for 2019 early in the new year.
"If I'm going to approve those rates, I want to justify that it agrees. It's in line, and we're following the plan," Reynard said, after the vote.
After five years of 10 per cent increases, a lot of ratepayers aren't in a good mood. They've also been dealing with increases to their hydro bills and property assessments, which have led to property tax increases.
However, in looking for a reprieve by delaying the water rate increase, the ratepayers may be running a bit of a risk.
By provincial law, water and sewer ratepayers in the city are responsible for bills associated with the system, making it a user-pay model. This makes it more equitable for those property owners, who are outside of the system, and they're using wells and septic systems instead.
By postponing the decision on 2019 until early 2018, users on the city's system are hoping they get additional grants to help offset rate increases. They're also hoping there are fewer line breaks over the winter, or the cost to remain the system remains the same.
However, if the city sees another winter like 2014, where there were many breaks and lots of expenses, then users may be forced to pay an increase of more than 5.5 per cent. Before leaving, the former operations manager apparently warned council many of the pipes in the city's water system were damaged by the tough winter, and they could be prone to breakage. This could be why, during the same meeting, councillors also agreed to spend more than a half-million dollars reinforcing some of their old pipes.
After the vote, Mayor Dave Canfield explained why the increases are necessary, noting they've been following the advice of their consultants, who were mandated by Queen's Park.
"So, there are different ways of looking at it and approaching it (the rates)," the mayor said Tuesday. "Next spring, we're going to have to re-address it and take a look at what the rate will be next year. Will it be the same, probably, but you never know."
In recent years, the mayor has recognized the increasing burden on property taxpayers. On average, most home owners have seen their assessments go up, and this has led to property tax bill increases. The city has been mitigating these increases by reducing the city's portion of the bill.
In June, Kenora council agreed to a $91 increase in the property tax bill. However, it could've been worse.
The 2017 reassessment resulted in an increase in the residential tax base of 5.1 per cent. However, the last city budget introduced a 1.18 per cent decrease in the residential municipal tax rate, mitigating the increase for many home owners.
With the increase in assessment, a home owner paid about $2,630 in taxes on a home worth about $210,000 this year. In 2016, the same home was worth about $200,000, and the owner paid $2,539 in taxes.
Councillors have been lobbying Queen's Park for many years, saying a one per cent increase in the HST could reduce pressure on property taxes. However, this strategy has been rejected in Toronto.
The two-year rate hike was also proposed, in order to avoid a lame-duck period. It proceeds municipal elections, and the lame-duck period is meant to protect ratepayers, during the final weeks of a council's term.
By revisiting the increases early in the new year, councillors should have lots of time to consider water rates, well before the municipal election next fall and the start of the lame-duck period.
The issue also comes as the mayor is wavering on running for another term in office. This opens the door for another candidate to come forward, if they're considering a run for the mayor's chair.
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