Niagara Falls Council ‘approves’ 2024 operating budget without proper public input
“I am finding it very difficult to do the budget this way,” Councillor Lori Lococo bemoaned four hours into Niagara Falls City Council’s budget meeting on January 23.
She expressed concern over the way the public budget process, meant to get proper input from the taxpayers who fund the City and the local officials elected to represent them, was being carried out in Niagara Falls.
Despite clear mandates in the new provincial strong mayor legislation to ensure mayors who were granted the new powers don’t abuse them, what unfolded in Niagara Falls last week would have left a bitter taste in the mouth of anyone concerned about the need for full transparency when the public’s money is being spent. Despite the clear intention of the new powers to allow proper public debate, there was no 30-day period provided to taxpayers and councillors to come forward with suggested amendments to Mayor Jim Diodati’s proposed 2024 budget. Its largest portion, the operating budget, was instead adopted during the same meeting in which it was first publicly proposed (a loophole in the province’s legislation was used that allows any mayor, with the support of council, to waive the 30-day budget review period).
Lococo’s lament about what unfolded was understandable as the three most populous Niagara lower-tier municipalities have attempted to negotiate their first municipal budgets under the Strong Mayor Powers legislation introduced last year by Ontario’s PC government.
While the legislation was ostensibly passed to speed up housing starts in municipalities, it also brought changes to the annual budget process, though what transpired at Niagara Falls Council on Tuesday did not seem markedly different from previous years, with Council members getting hung up on whether they were “for” or “against” the budget, a binary question that arguably no longer needs to be answered under the strong mayor powers.
Mayor Jim Diodati is now required to propose the budget for the municipality each year by February 1. His provisional budget must be shared with council, the municipal clerk and made available to the public. If the Mayor does not propose the budget by February 1, the responsibility falls to full council.
After receiving the proposed budget from the Mayor, council can amend the budget within a 30-day review period. Diodati then has ten days from the end of the review period to veto any council amendment, by providing a rationale, in writing, for his override to council and the municipal clerk. Within a 15-day period after the veto, council may vote down the veto, if two-thirds of all council members support the override.
Niagara Falls Mayor Jim Diodati presented his own budgets for the first time under new powers granted by the Province, but concerns were raised about the lack of public input prior to the approval of the 2024 budgets.
The council and the Mayor can shorten the timelines related to the budget review, veto and override periods by passing a resolution and the Mayor providing written documentation to members of council and the municipal clerk shortening the veto period.
At the end of this process, there is no formal vote to approve the budget, it is simply adopted by the municipality, once the amendment and veto processes have concluded. The change avoids past practice where a councillor might vote against a budget because there was one or more proposed expenditures she or he disagreed with.
The three Niagara municipalities that have been granted strong mayor powers are St. Catharines, Niagara Falls and Welland. While the budget processes in St. Catharines and Welland have been comparable, Niagara Falls has differed, especially when it comes to timelines.
In Welland, all of the Mayor Frank Campion’s budgets (operating, capital, water/wastewater) were introduced for information at a November 6 council meeting. Two subsequent meetings were scheduled dedicated to proposed amendments by councillors on November 27 and December 5.
On December 6, Campion put in writing a mayoral decision where he did not exercise any veto powers and shortened the timeline related to vetoes, effectively concluding the budget process and adopting the budgets as amended from the December 5 meeting. Mayor Campion’s proposed 2.69 percent increase to the operating budget slightly increased, as a result of council amendments, to 3.15 percent.
In St. Catharines the budget process began on November 22 with staff presenting operating, capital and water and wastewater budgets. The related staff report stated that, “the information in this report and related appendices will be used to support and inform the Mayor’s budget.”
Despite Mayor Mat Siscoe’s budget not slated until the new year, St. Catharines also kicked off an extensive public engagement process on the budget, after the November 22 meeting, which saw two public open houses, a telephone town hall and budget kiosks, with staff available to answer questions throughout the community. (All three of the Niagara municipalities had a public budget survey.)
Mayor Siscoe formally introduced his version of the budget on January 10, which drew ten delegations from members of the public. While some councillors intimated what amendments they might bring forward, no decisions were made that evening, with meetings on amendments scheduled for January 22 and 31 (and February 1, if necessary).
If all time frames contemplated in the legislation are followed, with the limitations imposed, adoption of the St. Catharines budgets may not conclude until February 26.
Niagara Falls City Council began its budget process on November 28, with capital and parking budgets, and the water/wastewater blueprint for 2024 following on December 12. It typically brings forward these three budgets and the operating budget, by far the largest and the one that sparks the most debate, separately.
From the outset, Niagara Falls was expecting quick turnarounds. A report on the November 28 agenda stated: ”[T]his Council typically does not take 30 days to review and amend any of the City's four budgets.”
With each budget presented, a recommendation for shortening the consideration period for amendments from 30 days to the date of the meeting when each was formally introduced, was proposed. No amendments were brought forward by council members and each budget (capital, parking, and water/wastewater) was considered adopted at the meeting in which it was presented.
While the first three budgets tend to get less notice, a municipality’s operating budget, usually the largest expense (by far), engenders the most discussion and debate, with residents anxious to find out the percentage increase their taxes will go up.
With Tuesday’s scheduled budget meeting, reports began to be posted on the City’s website toward the end of the prior week. On Thursday, January 18, an initial staff “variance analysis” report, authored by the City’s Director of Finance, summarized the key changes in the proposed 2024 budget in comparison to the 2023 budget.
It was only toward the very end of the 24 page report that the potential impact of the proposed changes was highlighted: a requirement of $5,339,296 to fund the 2024 operating and the capital/hospital levies, which would mean a 6.2 percent tax increase.
Like St. Catharines and the Region of Niagara, Niagara Falls City Council was criticized in 2023 when the property tax supported budget came in with a 7.9 percent increase.
The Niagara Falls staff report admitted the proposed increase for 2024 was in excess of the guidance previously given to staff by council that would limit any potential increase to between 4 and 5 percent. A 1.5 percent increase was also contemplated for the capital/hospital levy, with the remainder allocated to the operating budget.
Staff promised that the other report slated for Tuesday’s budget meeting would present options to reduce the proposed increase to within the 4 to 5.5 percent range.
At some point on the Friday before Tuesday’s meeting, the Mayor’s Proposed Draft Tax Levy Supported Budget was posted on the City’s website, though apparently council members were in receipt of the document since January 9.
Council had also held a closed meeting on the budget on January 15 under the provision of the Municipal Act for “the purpose of educating or training the members”, which is allowed as long as none of the discussions “materially advance the business or decision-making of the council.”
A notice of the January 15 in camera meeting had been on the City’s council schedule page but had been subsequently removed. When reached for comment regarding the removal, the City Clerk indicated the following:
“[I]t was taken off our calendar from the website since it had nothing to do with the public. In other words, the date had passed, there are no public minutes or open meeting video to view. However, I can appreciate that it may not look transparent, so I have asked staff to put that date back on the calendar and simply state it was a “closed meeting”.
Mayor Diodati’s operating budget did differ from staff’s with a number of cuts to bring down the proposed increase to the tax levy to 4 percent, made up of 3.5 percent for operating and a 0.5 percent hospital levy.
The Mayor’s proposed mitigation measures continued deferrals to the fleet replacement reserve equal to approximately $1.46 million and a 77 percent deferral of a “debt placeholder” equal to $260,000. Together the proposed deferrals reduced the operating budget to a $3,015,464 or 3.5 increase with the proposed “hospital levy” being reduced from 1.5 percent annually, as discussed in the staff report, to 0.5 percent annually until 2044, bringing the total proposed increase of the municipal portion of the 2024 tax bill to 4 percent.
Staff commented on the Mayor’s proposed budget:
“[O]verall the Mayor’s recommended budget is a ‘keep the lights on’ approach for this year. Though the budget does allow for key strategic priorities to move forward, the budget is essentially an inflationary budget.”
Staff recommended a 5.5 percent operating increase, with the start of the hospital levy to be deferred until 2025. Staff also offered two other options that would have seen 4.7 or 3.8 percent operating budget increases.
At Tuesday’s meeting, council members had their opportunity to present amendments to the Mayor’s proposed operating budget. Unlike St. Catharines’ Mayor Mat Siscoe, Mayor Diodati did not offer up any specific justification or defence of his budget.
In both Welland and St. Catharines, council members were required to submit proposed amendments in advance, in writing, so the amendments could be listed on the agenda, with documentation from staff indicating what the financial impact of the amendments would be on the operating budget, if approved.
Niagara Falls Councillor Lori Lococo was concerned about the lack of transparency around the 2024 budget approval process.
There was no such direction for Niagara Falls City councillors, which proved problematic for Councillor Lococo, who on a couple of occasions indicated that it would be difficult for her to vote on amendments when not knowing how many amendments might be proposed and the total financial impact of the amendments. She asked if it would be possible for all of the proposed amendments to be listed on the council chambers screen.
Chief Administrative Officer Jason Burgess responded: “[I]’ll leave that to the will of council. I believe the challenge is if we put up a whole bunch of amendments that don’t have the confidence of council you are looking at numbers that won’t carry any weight. I think it is better from a staff point of view; if there is an amendment we can tell you what the impact to the budget is. You’d be dealing with 20 amendments that you don’t know whether will pass or not, so I am not sure how you’d make your decision when you don’t know which ones are going to pass and which ones are not going to pass. I think that would be more difficult to get transparency.”
His claims made little sense, suggesting there would be less transparency to the public by showing taxpayers exactly what they are being asked to pay for, or not pay for; instead telling councillors to make some sort of individual request to staff to get information on a need-to-know basis. This subverts the very intention and existence of a democratic council that is supposed to inform the taxpayers who put members in office of any proposal to use their money, with the approval of elected local representatives.
The way things unfolded, taxpayers had only one work day, Monday, prior to the meeting day to review the Mayor’s proposed operating budget, analyze it and prepare for any possible delegation in front of council to debate how their money will be used in 2024. Then, the 30-day public response period, when councillors could have prepared amendments, following Tuesday’s meeting, was waived. Instead, the operating budget was adopted with only those amendments brought forward by one councillor.
If there were other proposed amendments, Burgess stamped out any process to show them to the public during the meeting. He seemed to make a decision that should have been left to elected representatives, unilaterally determining which amendments would “carry any weight” with the public.
In Welland, council members introduced 52 amendment motions and 14 (12 tax supported and two water/wastewater) were ultimately adopted. Mayor Campion did not exercise his veto over any of the amendments.
Contacted subsequent to the meeting on why Niagara Falls council members were not required to provide any prior notice of what amendments they would be bringing forward, City staff responded:
“[N]iagara Falls Council has never followed a process of putting amendments to budget in writing beforehand and the Strong Mayor’s legislation does not require this, but rather only requires Council make amendments by passing a resolution (motion) within the 30-day review period.”
The concern expressed by the CAO regarding the number of possible amendments that might not have the confidence of council were proved unfounded. Three amendments were approved and adopted by council, all raised by long-time Councillor Victor Pietrangelo, who had been the chair for budget related matters since the late 2000’s.
Pietrangelo was concerned that some of the measures proposed in the Mayor’s budget would put Council in a 2 percent deficit going into the 2025 budget process, a figure premised on staff also finding $1 million in sustainable savings and revenue increases. Using the phrase of not wanting to “kick the can down the road”, Pietrangelo successfully moved an amendment that returned some deferred monies to fleet replacement.
The total of the amendments raised the operating expenditures from 3.5 percent to 3.95 percent but Councillor Pietrangelo also moved a motion deferring the imposition of a hospital levy, something that council may revisit prior to the conclusion of its term.
Although Councillor Lococo had indicated there were two items in the budget totalling $875,000 for which she did not agree on, one being a $700,000 fee-for-service expenditure on the Innovation Hub located in Downtown Niagara Falls, her motion to amend occurred while another amendment was on the floor. Lococo did not return to her proposed amendments, getting into a discussion on “when do we vote on the whole budget?”
CAO Burgess correctly indicated that under the Strong Mayor Powers there is not “one, all-encompassing vote on the budget”, though later in the meeting he stated that after a recess staff would “put the whole budget on the screen” for council to vote on it.
After Councillor Lococo had voted against the amendment on returning some of the deferred monies to fleet services, Mayor Diodati challenged her:
“[Y]ou voted against the last motion on the fleet, so I assume you are against the budget.”
Burgess indicated the councillor had a right to propose her amendments.
Mayor Diodati responded: “She’s already voted against the last motion for fleet, which is part of the budget so regardless if those two things are in or out (of the budget), she’s not going to vote for the budget, anyway, which is what I’m saying. Is that right?”
Councillor Lococo: “No, it depends where the dollar amount gets to, where the money is coming from and what further options are on the table.”
Mayor Diodati: “What I am saying is that you are showing your hand so if you are already opposed to the budget, it doesn’t put you in a good position.”
With no other amendments in the offing and an approved motion effectively ending the amendment period, the council took a short recess.
Members returned to chambers to vote on what were seemingly superfluous motions, that had already been adopted through the amendments: that the net tax levy of $89,505,600 be approved with an increase of $3,402,914, effectively putting the tax hike at 3.95 percent, close to the current rate of inflation.
The result will see the median household (assessed at a value of $280,000) pay $59.76 more on the City portion of the tax bill, in addition to a $131.89 increase on the Regional portion of the bill.
The motions passed with (as the Mayor had predicted) Councillor Lococo opposed.
What was not superfluous was the third motion, shortening the 10-day veto period by ten days, as Mayor Diodati indicated he would not exercise any powers to override successful amendments by councillors, calling the municipal budget approved by consensus and continuing the pattern of adopting all Niagara Falls’ 2024 budgets during the same meeting in which they were introduced, with next to no opportunity for the public to participate in a back and forth about how their money will be spent this year.
Email: [email protected]
At a time when vital public information is needed by everyone, The Pointer has taken down our paywall on all stories to ensure every resident of Brampton, Mississauga and Niagara has access to the facts. For those who are able, we encourage you to consider a subscription. This will help us report on important public interest issues the community needs to know about now more than ever. You can register for a 30-day free trial HERE. Thereafter, The Pointer will charge $10 a month and you can cancel any time right on the website. Thank you
Submit a correction about this story