Niagara Falls city council approved its 2018 operating budget Tuesday night.
The move will see a $543,169 deficit reduction and will result in a net levy of 1.55 per cent, meaning residents will see a minimal tax increase of around $4 per month.
Currently, the operating budget has a deficit of around $1.6 million.
In January, council requested city staff to present options of routes to take to lower the deficit without putting the strain on taxpayers.
The city’s director of finance Todd Harrison presented council with four options:
Option one was to continue operating as currently run, which would result in an average tax increase of around $60 yearly for resident.
Option two was to reduce spending at the city level, including reducing funding for reserves, ceasing certain special services like free public transit on Christmas and New Year’s Eve and adapting a plan for city clerks to save $20,000 in printing costs. This would see a minimal tax increase of around $4 monthly per resident.
Option 3 was a further reduction in city services including differing transit investments, new hires, reducing allocations to reserve funds and needs assessment, on top of the terms of option 2. This option would see no increase in taxes.
Option 4 was to take the full amount of the deficit ($1.6 million) out of the OLG funds. This would also see no increase to taxes.
Council approved option two, with only two opposed, Councillors Carolyn Ioannoni and Vince Kerrio, who both supported allocating OLG funds towards the operating budget, saying residents are telling them they want to see the tax benefits directly on their bill.
Mayor Jim Diodati said he in no way supported using OLG funds to subsidize the operating budget, because the Falls could end up like Fort Erie if the funding is cut or re-negotiated.
Fort Erie had allocated funding from its former slots towards the city’s operating budget. When the slots closed, it created an economic hole.
Diodati pointed out that the contract with OLG can be terminated in just 30 days, and if it were to be, taxpayers would stuck footing the bill to keep the city operating.
“We’re already subsidizing taxes out of OLG to the tune $6 million, plus another $4 million is going to the police … So to me by putting more on this, makes us more vulnerable to what happens,” said Diodati.
“Way too risky. I’d rather see us go the other way and get money out of that OLG money, because we’re dependent on this.”
Kerrio said he understands the position, but the average taxpayer “doesn’t seem to see the benefit.”
“I’ve had them ask me, well how much money do you need as a gift before we see a benefit?”
Ioannoni said the money is not a gift, but that it represents the cost of being in the city.
Coun. Joyce Morocco said to that point, she thinks it’s extremely clear that the money is already directly going into the pockets of taxpayers.
“Okay wait a minute, there’s just $12 million they’re seeing … because as Todd Harrison pointed out, if we did not have that money, they would be paying,” Morocco said.
“Everybody is seeing it. At some point you touch and feel it … and if it ever dried up, and it’s true that it can disappear at any time … where are we left?”
During Harrison’s presentation of options, he was clear he is surprised by the amount of Falls residents who “consistently have a difficult time remembering what we do with this money.”
City council already allocated $5.9 million of OLG funding towards the city’s operating budget (9.75 per cent), Harrison explained.
“So to put that in context, if the operating expenses were to remain, and this fee was to never to go away, we would have to come up with $5.9 million to maintain the services that we provide.”
If those funds weren’t available, residents would be paying for it directly out of their pocket.
In total, from that $5.9 million, Harrison said residents are saving around $100 annually on their taxes.
Mayor Diodati said he thinks it would be wise to steer completely away from relying on OLG funding for city operating costs.
Instead, OLG money should be used towards economic development projects such as the Winter Festival of Lights and for promoting the city through Niagara Falls Tourism.
“We’re the only municipality in the Region that gets (the funding),” Diodati said.
Other budgets subsidized by OLG funding include the city’s asset management plan for maintaining city assets, valued around $800 million. Without the OLG subsidy, the cost of repairing city infrastructure would also fall directly on residents.
Coun. Kim Craitor echoed Diodati’s statements, saying when the next election is over, it’s possible other communities within the Niagara region might go to the province and ask for some of the OLG funding.
Coun. Thomson was quick to silence the conversation around that, saying it’s not something he “likes to discuss in public.”
He did say “if anybody asks” the city already does invest in the region through the $4 million it allocates to Niagara Regional Police Services.
“I hope we don’t have a lot of dialogue about that in the future,” Thomson said.