CITY WIDE IMPLICATIONS

CITY OF HAMILTON

CORPORATE SERVICES DEPARTMENT

Budgets & Finance Division Report to:

Mayor and Members Budget Steering Committee

Submitted by:

Peter A. Barkwell Acting General Manager Finance and Corporate Services

Date: November 10, 2008 Prepared by: Tom Hewitson, x4159

Maria Di Santo, x6247 John Savoia, x7298

SUBJECT: 2009 Tax Supported User Fees (City Wide) (FCS08106) RECOMMENDATION:

a) That the 2009 User Fees contained in Attachment One to FCS08106, be approved

and implemented; and b) That the City Solicitor & Corporate Counsel be authorized and directed to prepare all

necessary by-laws, for Council approval, for the purposes of establishing the user fees contained within this report.

Peter A. Barkwell Acting General Manager Finance and Corporate Services

SUBJECT: 2009 Tax Supported User Fees (FCS08106) (City Wide) - Page 2 of 6

EXECUTIVE SUMMARY:

Similar to the budget process in the last few years, the 2009 User Fees will be considered in advance of the main budget deliberations. Prior to 2006, the user fees were not approved until the end of the budget process. This often meant difficulties in achieving revenue projections and in communicating fees to user groups and the public. An earlier approval of the user fees allows for a more predictable revenue flow for programs and better communications to program users. For the most part, these proposed user fees will be effective January 1, 2009, however, some fees will be implemented sometime during 2009, depending on their specific implementation time required. Attachment One to FCS08106 identifies virtually all of the City’s tax supported user fees, with the following exceptions: ♦ Golf fees: to be included in a separate report with the Golf Course business plan; ♦ User Group Ice Rates: a separate report for the proposed ice rates for the

2008/2009 season went forward to the Emergency & Community Services Committee on November 5, 2008;

♦ Transit fares: have gone forward with a separate report as part of “Transit Day” on November 14, 2008;

♦ Some Planning fees which have been approved through by-law 04-003 “Tariff of Fees” to increase annually, or are going forward with a separate report pending the results of an external review.

At the end of the budget process, all approved fees, whether through this report or separate reports, will be consolidated into one 2009 user fee by-law.

On October 15, 2008, City Council approved the following recommendation from the Budget Steering Committee: “That, as a general guideline, user fees (excluding rate, golf, transit and ice fees) be increased by 3.4% and that any user fee adjustments other than 3.4% be forwarded for consideration with appropriate explanation.” As identified in Attachment One to FCS08106, most user fees are generally increasing by this Council approved guideline. There are, however, some exceptions. Some user fees are being recommended to remain unchanged, either due to a pending review, significant increases in prior years, or market/cost analysis indicates that the current fee is appropriate and an increase is not warranted. On the contrary, some requested fee increases may exceed inflation if costs to provide the service are also increasing in excess of inflation. In some circumstances, where the total fee (including GST) is rounded to provide for streamlined cash handling processes for customer convenience and easier cash handling procedures, increases to some user fees may be slightly higher or lower than the 3.4% Council approved guideline. User Fee increases which deviate from this guideline have a corresponding explanation under “Basis for Fee Increase” in Attachment One to FCS08106. Approving the fees as submitted through this report does not preclude an update during 2009. In particular there are a number of reviews occurring (eg. Dog Licensing) and, for the purposes of this report, the fee has remained the same as 2008 pending the results of the review.

SUBJECT: 2009 Tax Supported User Fees (FCS08106) (City Wide) - Page 3 of 6

BACKGROUND:

Each year the City sets its user fees in the annual user fee by-law. ANALYSIS/RATIONALE:

As identified, Attachment One to FCS08106 provides a listing of virtually all of the City’s tax supported user fees. Below is an explanation by Department. Planning & Economic Development (pages 1 – 27 of Attachment One)

• For the most part, user fees within this department are either increasing by inflation or remain unchanged if they are currently at full cost recovery.

• Building Permit fees, which are remaining at the 2008 approved level, reflect cost recovery achieved with fee changes approved following the completion of an operational review earlier this year.

• Dog licenses are remaining unchanged pending the completion of a fee review. • Lottery License Application Administration Fee has increased significantly to

reflect full cost recovery and to match the fee charged for new business/mobile licences.

• A number of Municipal Law General Fees are increasing greater than inflation to ensure full cost recovery.

• Downtown & Community Renewal are introducing two new user fees: an initial application fee of $250 for the Hamilton Downtown Residential Loan Program and a $300 fee for the Downtown Hamilton Heritage Grant Program. Some of the existing Downtown Loan fees are remaining unchanged to encourage participation.

• Some lottery and parking fees are set by the Province. • Planning application fees are being reviewed by a consultant for movement

towards fuller cost recovery. The report is to be completed, with amendments to the Tariff of Fees by-law, by January 2009.

Public Health Services (page 28 of Attachment One)

• User fees are being proposed to increase by inflation. As these fees are rounded up to the nearest $1.00 (for easier cash handling), some deviation from an exact 3.4% increase will occur.

• One exception: Food Safety Fees, which have not been raised since their inception in 2000, are proposed for increases above inflation in order to adequately recover the cost to provide the service.

Community Services (pages 29-60 of Attachment One)

• Recreation (pages 29-51) user fees are being proposed to increase by inflation. As these fees are rounded up to the nearest $0.25 (for easier cash handling), some deviation from an exact 3.4% increase will occur. For small fees (under $5.00), the rounding will cause greater percentage increases.

SUBJECT: 2009 Tax Supported User Fees (FCS08106) (City Wide) - Page 4 of 6

• Culture (museums) (pages 52-59) user fees remain at the current market rate, hence no increase is being proposed. There has been some rate restructuring which has resulted in some fees being deleted and consolidated with new/existing fees. In an effort to realize a relevant net profit margin, the rental rates where also completely restructured.

• No increase in user fees are being proposed for the Helping Hands Program as clients would find any cost increase prohibitive (page 60).

Hamilton Emergency Services (pages 61-63 of Attachment One)

• Fire and EMS user fees are being proposed to increase by inflation, other than those that are set by the Ministry of Transportation.

Public Works (pages 64-71 of Attachment One)

• Capital Planning & Implementation (page 64) • Fees are proposed to increase by inflation with the exception of Engineering

Drawings, Road Cut and Municipal Consent Permit Fees which are proposed for increases above inflation in order to adequately recover the cost to provide the service.

• Non Potable Water Review is being transferred to the 2009 Rate Fees and Charges Schedule as the related service is provided by Water/Wastewater.

• A new fee is being proposed for Field Review (Utility Co-ordinator Call Out) which recovers the cost of a Utility Co-ordinator going on site to review proposed installation locations.

• Waste Management (page 65)

• Transfer Station deposit fees were increased significantly in 2007 to more accurately reflect the current tipping fees, as such, no increase is being proposed for 2009.

• The white goods pick-up program ended in March 2008, and therefore the existing fee is being deleted.

• A new fee has been proposed for Green Cart Replacements where the client cannot present the broken cart for exchange. The proposed fee represents half of the cost of a new green cart.

• A number of new proposed fees for 2009 are related to waste management services that will be available to various festivals and events.

• Transit (page 66)

• Similar to prior years, the fees for Urban Charters are being proposed to increase by 5% to cover the costs of providing the service

• All other transit fees have gone separately as part of the Transit Day on November 14, 2008.

• Operations & Maintenance (pages 67-71)

• No increase in tree trimming/removal user fees are being recommended at this time – these user fees are currently still under review.

• No increase in marina slip rental user fees are being proposed for 2009 due to a net profit/under capacity situation.

SUBJECT: 2009 Tax Supported User Fees (FCS08106) (City Wide) - Page 5 of 6

• Cemetery fees are increasing mainly by inflation, with the exception of some fees remaining unchanged either due to existing fees adequately recovering costs, or as part of a three year cycle of no increases (2009 being year 2 of this 3 year cycle).

• A new user fee related to the new urn garden grave that is being opened – the proposed fee is established to reflect the cost of the service.

• Other fees are mainly increasing by inflation with the exception of Active Encroachment for bus bench advertising and permanent road closure applications that are increasing significantly to ensure full cost recovery.

Corporate Services (pages 72-77 of Attachment One)

• Most user fees are proposed to remain unchanged or increased by inflation. • Tenders and RFP user fees were increased significantly in 2008 to more

accurately reflect the cost of providing the service - no increase is being proposed for 2009.

• Taxation user fees are proposed to remain unchanged as the existing fees achieve full cost recovery.

ALTERNATIVES FOR CONSIDERATION:

Council may direct staff on any of the user fees. FINANCIAL/STAFFING/LEGAL IMPLICATIONS:

Approval of the user fees is an integral part of the budget process. Revenue estimates for 2009 budget are based on the fees contained within this report. POLICIES AFFECTING PROPOSAL:

N/A RELEVANT CONSULTATION:

The user fees contained herein were submitted by the program department.

SUBJECT: 2009 Tax Supported User Fees (FCS08106) (City Wide) - Page 6 of 6

CITY STRATEGIC COMMITMENT:

By evaluating the “Triple Bottom Line”, (community, environment, economic implications) we can make choices that create value across all three bottom lines, moving us closer to our vision for a sustainable community, and Provincial interests.

Community Well-Being is enhanced. Yes No Establishment of appropriate user fees contributes to community well-being. Environmental Well-Being is enhanced. Yes No Establishment of appropriate user fees contributes to environmental well-being. Economic Well-Being is enhanced. Yes No Establishment of appropriate user fees contributes to economic well-being. Does the option you are recommending create value across all three bottom lines? Yes No Do the options you are recommending make Hamilton a City of choice for high performance public servants? Yes No