Hampstead pursues lower local tax effort, while curtailing water usage

According to the 2008 budget, which was adopted last month, most owners of single-family homes in Hampstead will be paying a combined 3.2 per cent more in taxes to the town and to the Montreal Agglomeration this year.

Although local taxes in Hampstead are increasing by only 2.1 per cent, the payment to the Agglomeration, which is responsible for managing a range of services for the whole island, is rising by 4.6 per cent.

Since demerger from the City of Montreal two years ago this month, Hampstead has been pursuing a trend of reducing municipal tax increases. For 2008, the town decided to institute a policy by which virtually all of the local increase will be for the tax on water.

Hampstead has long been one of the few communities in the Montreal region that meters water consumption. While property valuations, which form the basis for tax assessments, are beyond control, the hope is that home owners will be able to negate the local tax increase by reducing their water usage. The 2008 water tax bills will be issued at the end of this year. "We need an extra 2.1 per cent," says Mayor William Steinberg. "But rather than take that money from local property taxes, which is the normal way it would be done, we saw that our water tax rate was too low. We're allowed to have a water tax rate that recoups our costs related to water, and unlike other towns, ours over the years has become too low. "So we decided that we're going to bring the water tax right up where it belongs, and then we don't have to increase our local property taxes. So the entire 2.1 per cent overall local tax increase is going into the water taxes." In other highlights of the budget, Hampstead has estimated spending around $11.6 million in the coming year. The amount has increased at about the rate of inflation, say town officials.

The town has had to set aside $100,000 for legal cases that started before demerger. As well, it is paying an additional $39,000 to the Montreal Metropolitan Community, an administrative authority for the greater Montreal region. This year, Hampstead will be receiving a payment of nearly $880,000 from the provincial government for infrastructure upgrades.

It is the second instalment of a five-year $4.4 million interest-free loan that is repayable over 20 years. Of four West End and West Island Montreal municipalities that were offered the interest-free loan, only Hampstead agreed. According to Steinberg, the loan will save Hampstead tax payers about $3.2 million in interest payments.