The Region’s process for approving the coming year’s financial blueprint typically begins in July with a meeting of the Budget Review Committee of the Whole. This committee is made up of all regional councillors, but unlike a regular meeting, it is overseen by the Budget Chair, Regional Councillor and Mayor Wayne Redekop (Fort Erie)—not Regional Chair Jim Bradley.
During this past July’s meeting, staff outline the projected service costs and proposed “strategy for the preparation and presentation of the 2025 budget.”
This meeting presented the first indication of how much the budget may increase in the coming year.
The Region’s budget actually consists of four operating budgets: the general levy (regional departments and external agencies, boards and commissions, known as ABCs); the water and wastewater rates; and special levies for regional transit and waste management.
The staff report prepared for the July 25 budget committee meeting explained that simply keeping services at the same level would require a budget increase. The general tax levy would go up by 6.41 percent (3.38 percent attributable to departments at the Region and 3.03 percent as a result of the external ABCs), water and wastewater rates would rise 4.11 percent. Special levies associated with the waste management (4.26 percent) and the Niagara Transit Commission (4.44 percent) are also up.
While increases based on inflation are to be expected, certain items pertinent to regional operations, such as utilities, fuel, insurance, software and salt, have outpaced the 2 percent inflation rate increase staff have estimated for 2025. In addition, subsidies from the federal and provincial government for mandated services have not kept pace with inflation, leaving a levy impact of $1.6 million.
The biggest of the “base pressures” driving the increase to regional departments is labour-related costs, which will require a $13.2 million increase.
The July report makes it clear regional departments will be coming forward with requests for increased staffing. Due to deferrals of hiring during the pandemic, “there is a current gap in staffing levels required to support the current service levels which in many areas have increased in complexity. Continuing to operate on lower than required staffing levels creates operational risks,” the report states.
The preliminary staffing changes proposed would increase the general tax levy by 1.93 percent and water and wastewater rates by 1.26 percent, with nominal changes in waste management and transit operations.
Budget Chair Redekop recommended that councillors be provided greater detail about the staffing request, including how many of these staff members are a result of mandated services from the other levels of government. Redekop reasoned that it is often the politicians that hear the Region “has way too many people.” Regional Councillor and Mayor, Bill Steele (Port Colborne) suggested a potential closed-door session in the future for council members to ask “pointed questions” on staffing levels. It was agreed staff would have to investigate the appropriateness of such a session, as per the Municipal Act’s closed meeting rules.
The other area that will contribute to an increase in the various regional budgets is a renewed commitment to capital financing in the general budget and water/wastewater areas. Despite the Region’s approved Asset Management Plan recommending an annual general tax levy increase of 3.82 percent and a 7.22 percent combined rate increase in water and wastewater, the actual amounts added to annual budgets have lagged behind the recommended amounts.
For the 2025 budget deliberations, staff are recommending a 2.5 percent increase, or $12.1 million, in capital funding for general levy programs, and are resigned to working incrementally at eliminating the capital backlog over 50 years, as opposed to 10 years as previously recommended. Staff’s rationale for the change is that accelerating project timelines is unrealistic in light of constraints such as “available project management resources, development charges collected and coordination of timing with external parties.”
With the sustainability of the water and wastewater infrastructure at “crisis stage”, as per the Region’s Chief Administrative Officer (CAO) Ron Tripp, staff’s recommended strategy is to adhere to the approved Asset Management Plan. With a 7.22 percent increase ($11.2 million) in annual capital financing, the water and wastewater backlog will be eliminated within ten years, according to staff, though Mr. Tripp admitted that additional staffing will also be required. A future report on staffing was promised during the budget process.
With the base pressures, programming changes (mostly in the form of labour-related costs) and capital financing, the July forecast of a possible general tax levy increase rested at 8.72 percent. During the deliberations for this year’s budget, the initial increase identified was a 9 percent increase. The amount got as high as 10.7 percent but was finalized at 7.02 percent when the budget was approved in December of last year.
At points during the July meeting, council members questioned staff on what an appropriate increase would be before council were to consider such budget mitigation measures as use of reserves, the taxpayer relief fund or deferrals. Members were reminded that the budget bylaw passed in 2019 discourages an arbitrary percentage amount as “not the best method to adequately present the challenges facing Council in a particular budget year.”
An attempt last year by Regional Councillor Bob Gale (Niagara Falls) to limit staff efforts to a four percent operating levy increase failed. In his prepared remarks to kick off consideration of the Capital Budget on September 12, Budget Chair Redekop did express a more nuanced position stating he believed “staff should be given guidance with respect to Council's budget expectations.”
Staff should be given guidance with respect to Council's budget expectations
While there was no firm discussion amongst councillors on what might be an appropriate increase balancing the Region’s three budget guiding principles of sustainability, affordability and transparency, Regional Councillor Rob Foster (Lincoln) noted that unlike senior levels of government, municipal governments are limited to the property tax base when it comes to revenue. He summed up the councillors’ quandary, “Increases are difficult for the property owner, but it is the only avenue we have.”
Capital budget approved
After the initial budget meeting in late July, regional councillors had a couple of Budget Workshop/Education sessions. On September 5, after one such session, the Committee of the Whole meeting included a presentation by Commissioner of Public Works, Terry Ricketts, on the state of repair of the Region’s water and wastewater infrastructure.
The presentation from Commissioner Ricketts was an eye-opener, detailing that 77 percent of Niagara Region’s water is delivered by three plants that are approximately 100 years old; 90 percent of the wastewater capacity is delivered by plants more than 50 years old; a little less than 50 percent of water and wastewater infrastructure is in poor or very poor condition and the related plants, collectively, have $680 million in overdue investment and repairs.
The Commissioner’s presentation was certainly impactful when the budget committee met a week later, on September 12, to consider the capital budget.
While the operating budgets deal with the day-to-day expenditures, services and programs, the capital budget covers investments in long-term assets and infrastructure, such as roads, buildings, the noted water and wastewater facilities, vehicles and machinery.
Staff presented a recommended capital budget of approximately $376.1 million consisting of 168 projects. Not surprising in light of the previous week’s presentation, $281 million or 75 percent of the capital program is allocated toward “sustainment” of the Region’s existing assets. Capital investments for transit amount to $42.2 million, but will only proceed subject to funding from the other levels of government.
As expected, based on the July budget meeting, staff forwarded $27.1 million in “enhanced capital financing”. Encompassed within the total is the 2.5 percent increase, or $12.1 million, in capital funding for general levy programs, and the 7.22 percent increase, or $11.2 million for water and wastewater. Other funding sources of the $376.1 million capital budget include $148.6 million in capital reserves; $18.3 million from the Canada Community Building Fund (formerly known as Federal Gas Tax); $94.3 million from Development Charges and $87.8 million in cost sharing with local area municipalities (LAMs); and grants from the federal and provincial governments.
The one traditional funding source not being used this year by the Region will be debt. Associate Director Brens explained that with some of the LAMs needing to take on increased debt in 2025, the recommendation was that no new debt be incurred by the Region. (The Region issues debentures for capital projects on behalf of the Region and LAMs.)
A few of the big-ticket items in the capital budget centre around major development projects within the Region. A total of $29.1 million is identified for road capacity improvements on Montrose Road in Niagara Falls in the vicinity of the future Niagara South Hospital. Two major projects in the area of the Port Colborne East Employment Lands—the Barrick Road Trunk Watermain and the East Side Sewage Pumping Station—account for $100 million in investment. The projects were slated to be in the 2026 capital budget, but the announcement of the Asahi Kasei’s investment in an electric vehicle battery separator plant in Port Colborne has accelerated the funding of the infrastructure projects slated for the area.
In light of the sobering presentation the week before, there was no substantive debate on the worthiness of any particular projects or suggestion that particular projects be dropped from the capital budget. As Chair Redekop had plainly stated the week before, the need to invest to alleviate the growing infrastructure gap was not anything new to council members.
As a result, council approved the 2025 Capital Budget, subject to final approval of the related bylaw slated for December 12.
Traditionally, the general tax levy bylaw is considered the same evening, though at the September 12 meeting, Regional Councillor Brian Heit (St. Catharines) suggested the general levy budget was “not looking promising”, with debate possible into the new year.
Opportunities for public input?
In July 2023, when the 2024 budget strategy was unveiled, the related report promised “enhanced engagement with Council and Public.” Staff indicated that the results of the public engagement would be available in October “to aid Council in making critical budget decisions.”
When October 2023 passed with no evidence of such engagement, Regional Councillor Gale inquired about the status, to be told that the public survey had been “deferred”. Councillor Gale was not pleased.
“After the highest tax increase in recent memory (in 2023), and we are not going to hear from the public?” he said.
After the highest tax increase in recent memory (in 2023), and we are not going to hear from the public?
The public survey and some community focus groups were finally initiated in November, but council had already made final decisions on the capital budget and a decision on water and wastewater rates was scheduled a mere three days later, a situation described by Chair Redekop as “not ideal.”
Staff conceded in this July’s budget strategy report that “previous budget engagement activities were too broad and all encompassing”, bringing little value to support decision-makers. The 2025 strategy is to educate residents on how the Region’s budget operates and, not surprisingly, based on the July budget meeting discussions, on maintaining existing assets in good repair.
Staff promise a “public engagement exercise” that will “gauge resident knowledge and appetite on capital investments” to help facilitate staff recommendations. While the Region’s 2025 budget page is currently operable, with a link for residents to share feedback, there is nothing “topic focused” to date. With the capital budget already approved, no opportunity for input on that aspect of the budget process will be available. The page provides key dates and some explainer videos on operating and capital budgets.
The Niagara Region’s 2025 Budget page can be found here.
What’s next in the regional budget process?
The councillors are slated to have a budget workshop/education session on October 10, which will cover the topics of agencies, boards and commissions; water and wastewater rates: waste management and Niagara Transit Commission special levies.
A series of budget meetings will follow with consideration of the waste management and Niagara Transit Commission special levies on October 17, water and wastewater rates on November 7, and budgets of the ABCs on November 14. All budget meetings are on Thursdays, with a start time of 6:30 p.m.
Councillors will have one further budget workshop/education session on the general tax levy on November 28, with consideration of the general tax levy (operating budget) the following week on Thursday, December 5 at 6:30 p.m.
If all budgets and rates are approved on the scheduled dates, the process will be formalized with the passing of the related general tax levy, capital and user fee bylaws at the December 12 Regional Council meeting.
Distinguished budget award?
A July 30th news release from Niagara Region trumpeted the following:
For the 12th consecutive year, Niagara Region has been recognized for meeting the highest principles of government budgeting by receiving the Distinguished Budget Presentation Award from the Government Finance Officers Association (GFOA).
A panel of independent reviewers examined the Region’s annual budget document for 2024 and have determined that Niagara Region’s Financial Management and Planning Division met the high standards set for this award.
Sometime after regional council approves the annual budget, staff will produce a summary document—last year’s ran nearly 350 pages and was broken down into seven sections: a summary of the budget, accompanied by bullet statistics and related infographics; an “About the Niagara Region” section, which in addition to facts about the Region includes Council’s priorities and a corporate organization chart; a Report from the Treasurer; an Operating Budget and Corporate overview; department summaries; a Capital Budget Overview; a section on Financing Sources, and Appendices, which include policies, supporting documentation, glossary of terms and acronym descriptions, amongst other detailed information.
It is, without a doubt, an impressive, informative and well-thought-out document.
How does it become “award winning”?
The Distinguished Budget Presentation Award Program (DBPA) is administered by the Government Finance Officers Association (GFOA), an organization founded in 1906, headquartered in Chicago, that represents public finance officials throughout the United States and Canada. GFOA's mission is to advance excellence in public finance, and it boasts 20,000 members.
GFOA established the DBPA in 1984 to encourage and assist state and local governments to prepare budget documents of the very highest quality. To earn recognition, budget documents must meet program criteria and excel as a policy document, financial plan, operations guide, and communication tool. Each year over 1,800 governments receive the DBPA.
To be considered for a DBPA, the Region has to submit its budget documentation within 90 days of budget approval and pay the requisite fee. As a municipality of more than 200,000 residents, the Region would pay $1,450 USD (or $725, if a GFOA member).
The DBPA section of the GFOA website provides an “Explanation of Criteria” document that, over a dozen pages, goes into substantial detail on what a submitted budget document should look like. Explanations on criteria are provided and what mandatory requirements to include in the document, such as organizational charts, strategic priorities, table of contents and glossary of terms, are detailed.
The Pointer spoke to John Fishbein, Senior Program Manager, Budget Award about the DBPA. Mr. Fishbein provided a broad overview of the program and its goals:
“The budget award program is a prestigious program. You have to meet 25 criteria and governments really work on it to make sure that they receive the award. They like it because it also gives them comments on which to try and improve from.”
While the FOGA is up front on it website, providing detailed steps on how applicants can achieve award status, Mr. Fishbein was less transparent. When asked, in light of 1,800 successful recipients annually, how many applied for the award, he would only say, “we have over 1,800 applications.” When pressed further on whether there was a certain percentage of applicants that make the grade, Mr. Fishbein replied: “We don't give out that information. We just list the award winners, right? We're not here to penalize governments. We're here to educate all governments.”
When asked if the nominal entry fee went toward administering the awards program or expenses incurred by the volunteer budget reviewers, perfectly justifiable expenditures under the circumstances, Mr. Fishbein again refused to elaborate: “We don’t go into that detail.”
The Niagara Region has likely paid its fee and dutifully followed the step-by-step criteria and instructions provided by GFOA for the last dozen years. Mr. Fishbein offered no apologies for the fact that by municipalities “winning” the distinguished budget award, annually and repeatedly, that it would undermine its credibility.
“It's like riding a bike. You become better at riding a bike the more you ride it. When people do the budget, they become better at it.”
News of the award came just a week after it was announced the Region parted ways with its Commissioner of Corporate Services and Treasurer, Todd Harrison, who had served in the position for more than six years and had previously worked in a similar capacity in Niagara Falls for 11 years. Mr. Harrison’s departure was not the only major staffing change in the Finance department.
Helen Furtado, the Region’s Director of Financial Management and Planning, who was the public face for many years during the regional budget process, walking councillors through the related PowerPoints and reports, had retired earlier in 2024.
With Harrison’s departure, the Regional Deputy CAO Dan Carnegie was made the Acting Commissioner, with Beth Brens, Associate Director, Budget Planning and Strategy taking over responsibility of shepherding council through the 2025 budget process. Ms. Brens had returned to the Region after serving a year as the Director of Finance and Treasurer in Grimsby.
Dean Iorfida is a Local Journalism Initiative reporter based at The Pointer.
