Hamilton council uses $1.4-million to ease rural fire tax hike
The Hamilton Spectator
When a blaze destroyed 11 townhouses on Edenrock Drive in Winona last July, a fire marshal supervisor marvelled over how nobody had died.
The response last month to a major fire at a three-storey seniors’ building on Stoney Brook Drive was just as impressive, Coun. Maria Pearson says.
“I’ll tell you the response was phenomenal in both instances,” Pearson said during this week’s council meeting. “There was no loss of life and no injury.”
The fire department has beefed up its resources to include professional firefighters alongside volunteers and added equipment to respond to once-rural areas that have urbanized with denser housing. But that shift came at a cost to some taxpayers.
“For larger incidents, where we need significant amounts of resources, that was becoming a challenge,” Fire Chief Dave Cunliffe told councillors Wednesday.
Assembling volunteer firefighters from different stations to tackle big blazes in Winona took time, Cunliffe said.
“And quite frankly, based on the risk profile, we did not believe maintaining that level of service was appropriate.”
But the crucial pivot, a product of an overall revamped firefighting master plan approved in 2019, has also meant a shift in taxation.
And this week, in a late manoeuvre following council’s budget approval March 31, city politicians opted to tap $1.4 million in reserve funds to spread out the tax hit for affected residents over two years instead of just in 2021.
Fire services are area rated, which means rural residents who receive volunteer responses pay a certain amount on tax bills while urban dwellers pay for mostly career firefighters.
The overall cost of firefighting in Hamilton is about $94.2 million, the vast majority of which is urban service at $87.4 million. The bill for rural services is $6.8 million.
But at the tail end of budget deliberations this spring, councillors were surprised to learn a shift of roughly 5,000 residential properties from firefighting’s rural area to its urban zone also meant an unexpected spike in taxes.
For 4,442 properties east of Fruitland Road to the Grimsby border the change from rural to urban comes with a 4.7 per cent fire hike on top of the 2.1 per cent overall budget increase, making for a 6.8 impact overall.
“This was a tough one, and it was unfortunate in the process,” Pearson said, adding, “And believe me, I have been getting the calls and emails.”
Measured on an average household valued at about $381,000, the 2.1 per cent increase alone translates into $89 more on tax bills this year.
The shift from volunteer rural services to urban responses represents a shift of $2.4 billion in residential assessment.
The flip side of that realignment is fewer residents to carry the load of volunteer services, saddling them with a greater levy burden.
As a result, those left in the rural pool — 23,297 properties — faced a 2.6 per cent area-rating fire hike on top of their overall budget increase in 2021.
That was “unconscionable,” Coun. Lloyd Ferguson told The Spectator this week before city politicians backed his suggestion to use $1.4 million in reserve funds to soften the blow this year.
“We told the public, including the rural people, that it was a 2 per cent tax increase for 2021.”
The funds from the city’s tax stabilization reserve reduce the 2.6 per cent hike to 1.3 per cent this year with the remainder to be paid in 2022.
That $1.4 million, however, doesn’t shelter those residents, like Pearson’s constituents, from the hike that comes with the shift from rural to urban fire services.
Councillors with rural areas complained they felt “blindsided” and “shocked” by the late-arriving numbers from staff in a report emailed in late
March on the eve of budget approval after weeks of deliberations.
Mike Zegarac, general manager of finance, offered a mea culpa on behalf of his division, saying they’d try to do better in the future.
In an interview, Zegarac said various factors, including the COVID-19 pandemic and added workload, left the fire figures until the end of the budget season.
That was not appropriate, he said.
“Council needs more time; an opportunity to receive this information directly from staff, as well as an opportunity to ask questions before finalizing their deliberations.”
Pearson told The Spectator she appreciated staff’s efforts to sort through a confusing array of figures.
She also supports the bolstered fire services in Ward 10. She watched how firefighters tackled last month’s blaze on Stoney Brook Drive. “And all the equipment was there. At Eden Rock, all the equipment was there.”
But Pearson says she’ll keep a sharper eye on how changing city services affect taxation in the future.
“Going forward, will I be more responsive to say, ‘Hey, you’re bringing us a great master plan, but what’s the dollars and cost behind it.’ And that was not questioned at that time.”