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Hamilton is in good shape, says city manager

By Kathy Yanchus • REVIEW STAFF

The City of Hamilton is in pretty good shape.

There are certainly challenges, but in many areas such as taxes, employment, economic development and city services, Hamiltonians have much to be proud of, according to city manager Chris Murray, who was the guest speaker at the Flamborough Chamber of Commerce’s Nov. 28 meeting at Dutch Mill Country Market in Waterdown.

Even the rest of the country has good things to say about the city: The Conference Board of Canada, for example, predicts Hamilton will be fastest growing economy in Ontario, and Site Selection Magazine ranks the city tops in the country for attracting industrial and commercial development. Other sources call Hamilton the best place in Ontario to invest and the Steel City has been cited as being among the top in North America for quality of life.

For two consecutive years, Hamilton has had the second lowest tax increase among major Ontario municipalities.

“Council has given us a very specific goal of trying to achieve a zero tax increase and the way we’ve been doing it over the last couple of years has been through attrition and with some reorganization within our departments, to find ways to do more with the resources we have,” said Murray.

The economy continues to grow in a positive direction, GO Transit is expanding service to the core, and there is active downtown development, including McMaster University’s medical campus, a 50,000-square-foot grocery store in Jackson Square and two new hotels.

Compared to other major cities in the country, Hamilton boasts a diverse economy, a fact that holds the city in good stead to withstand the ebbs and flows of the world economy, and helps keep unemployment numbers down, said Murray.

Building permits topped the billion dollar mark in 2010, and the city has already exceeded that number as of today, he said.

The city continues to do more to bring business into Hamilton and ease the pressure on residential taxpayers, said Murray, adding that by the end of this year, he projects building permit values to be somewhere in the area of $1.2 or $1.3 billion.

“These are the numbers that back up what the rest of the country is saying in terms of why coming to Hamilton is a smart financial decision,” he said.

Unemployment rates continued to improve in 2012 – 6.8 per cent – and when compared to the provincial average (7.9 per cent) and the national average (7.4 per cent), Hamilton is on the right side of balance sheet, said Murray.

“From an infrastructure standpoint one of good things about Hamilton is that we started 10 years ago to inventory our assets in terms of their condition and the amount of money we’re investing in the maintenance of those assets,” he explained.

The city, however, faces a sizeable shortfall in terms of funds to manage those assets if they are to be sustained well into the future.

“We are short somewhere in the order of about $200 million a year (over 10 years) that we should be spending on top of what we’re currently spending on our assets,” said the city manager.

How to pay for this growing debt forecast is the question, one that’s complicated by the fact the city relies on a 77 per cent residential tax base and a 23 per cent commercial industrial one.

“What concerns me the most is not so much where we are today, but think about this 10 years from now,” said Murray, noting inevitable higher health-care costs and the growing number of people entering their senior years and living longer.

“So everything we can possibly do now to build our commercial/industrial tax base is critical. I know council, without a doubt, is very much focused on this, wanting to make sure our economic development department continues to be extremely successful, which they have been,” he said.

The city is also, “like everyone else” grappling with increased operating costs, salaries, wages, pensions and utilities. Everything it can do to maintain costs is critical, said Murray.

Another “critical concern” for the city is its AA credit rating and although “from an ability to borrow money, the city is in fairly good shape, that isn’t to say that in the next 10 years we won’t have some challenges to address,” he said.

When a credit rating is established, analysts are not just looking at the present, but future debt and how it will be managed, he explained.

There is a growing concern and interest from all levels of government to understand and address the infrastructure shortfall and hopefully build a strategy that allows the city to tackle infrastructure before it becomes necessary to replace it, as opposed to repair it, said Murray.

“But if that’s ignored, there certainly is the possibility our credit rating could be affected because we’re going to have to expend more and more money to address the shortfall in infrastructure,” he said.

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