Feb 08, 2010 - 02:41 PM

By Jillian Follert

OSHAWA -- With a fall election looming, Oshawa council has passed an unexpectedly low tax hike for 2010, approving an increase of 0.9 per cent.

That works out to $13.34 per year for a home valued at $200,000.

Friday’s budget meeting started with a potential increase of 1.9 per cent, still low by recent standards.

City staff surprised councillors mid-meeting with a list of eleventh-hour reductions -- including use of a $300,000 prior year surplus and $370,000 in snow clearing savings -- to get the magic number down to 0.9 per cent.

Politicians heaped praise on staff, calling the final figure “shocking” and “remarkable.”    “Based on current information, this increase will be one of the lowest in Durham Region,” said City Manager Bob Duignan, noting it is also Oshawa’s lowest increase in a decade.

Mayor John Gray said he was “very happy” with the final result.

“The important thing is that this won’t have a negative impact on next year’s budget. People really see through it when you do a low increase in an election year, then they get hit the next year,” he said. “That’s not going to happen here.”

Councillor Nester Pidwerbecki said he would be surprised if the majority of taxpayers weren’t comfortable with 0.9 per cent.

“It’s a real tribute to the talent and skills of our City staff that they were able to do this, especially with this economy,” he said.

When staff took a preliminary look at the numbers last fall, Oshawa was looking at 4.9 per cent tax hike, above the 4 per cent cap set by council in 2007.

The main drivers are salary and wage increases for City employees, growth, inflation, increased contributions to City savings accounts and financial losses at the General Motors Centre.

And, those weren’t the only items putting pressure on the bottom line.

The day-long Feb. 5 budget meeting kicked off with community groups making pleas for City funding.

A total of 28 groups requested partnership grants for 2010, in the form of cash or in-kind services.

Autofest spokesman Mike Kalynko told council his event lost its sponsorship from Sunoco and needs support to maintain its success, noting it generates close to $1 million in economic impact each year.

In her pitch, Julie-Anne Farr of the Oshawa Block Parent Association said City cash is needed to recruit new volunteers and help cover the cost of police checks.

Councillors approved the majority of requests, despite the fact that some groups don’t meet the City’s grant criteria. Some -- including Block Parents and Simcoe Hall Settlement House -- were approved on the condition that funding be phased out over the next five years.

Politicians were also faced with a list of more than $222,000 in potential budget increases, choosing to approve $150,000 earmarked for retrofits and operating funds for Parkwood Estate.

A handful of taxpayers waited patiently for a chance at the microphone to share their budget theories with council, including Oshawa Ratepayers President Bruce Wood, who urged a zero per cent increase.

North Oshawa resident Tim Bird suggested the City stiffen fines for landlords who run illegal student rentals as a way of funding more bylaw staff, while Larry Ladd admonished council for the lack of waterfront funding in the budget.

As council got down to serious debate, much discussion centred on the City’s reserve and contingency accounts, and whether it makes more sense to save for a rainy day, or achieve immediate relief for taxpayers.

Councillor Tito-Dante Marimpietri was especially pleased with the decision to use $370,000 in winter maintenance funds saved as a result of the dry winter, to help mitigate the tax increase, instead of putting it in savings.

“If there are people who are struggling and can’t pay their taxes, I don’t think they’re too sympathetic to our reserve needs,” he said.

Mayor Gray wasn’t thrilled with council’s decision to take $150,000 out of a contingency fund to help pare down the tax hike, saying it’s not ideal fiscal practice.

“If you’re going to propose increases like council did, you need to propose actual decreases too,” he said.