WATERLOO REGION - Regional staff are discussing an infrastructure tax on citizens because of the government's high debt per capita and low reserves.

At a budget meeting Wednesday, chief financial officer Craig Dyer said staff are discussing the idea of an extra tax on citizens to pay for infrastructure in future budgets.

"We'd like to talk to council more about this as we get into 2017, considering the introduction of a regional infrastructure levy," he said. "If we're going to start making progress, significant progress on getting our waste management, transit, facilities capital programs properly financed, we need to look for ways of getting there.

"This is a possibility."

The Region of Waterloo plans $2 billion in capital work in the next 10 years and a third of that is expected to be paid for with debt.

Regional debt is projected to hit nearly $900 million by 2021, up from about $660 million today.

Compared to five similar municipalities, the region has the second highest debt per capita, at $1,093, and the lowest reserves per capita at $431.

To ensure a stable financial future, Dyer said the region needs to increase funding not from debt.

"Based on the mix right now of debt and non-debt sources, we're not where we need to be," he said "We're making progress, but there's still a road ahead I think to get us a better mix of in-year contributions versus long-term borrowing."

Budget chair Sean Strickland is cautious of the infrastructure tax idea.

He pointed out there's already an extra property tax on citizens for the light rail transit and bus expansion.

"You could argue we already have an infrastructure tax in terms of what we're paying for Ion (and the transportation master plan) and there's also increased user rates for water and waste water that we've been doing for the past six, seven years that pays for capital, so I think we've got to be careful about piling on," he said.

The region plans tax increases in the cities for rapid transit that will see tax increases equivalent to about 12.9 per cent between 2011 and 2019 for bus expansion and light rail. Officials say other savings offset the cost.

What hasn't been decided is what will happen after 2019 to that tax hike that's already built into the budget.

"I think that's part of what staff might be setting us up for, to carry that base number forward," Strickland said.

He said after 2019 not needing the light rail tax hike makes room in the budget to fund more capital projects.

The region not only has to think about current spending, but its future outlook and that includes keeping a coveted triple-A credit rating.

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"We want to make sure we're not eroding our fiscal flexibility in the future," Dyer said. "We don't want a significant portion of out budget simply taken up with debt servicing costs."

Coun. Helen Jowett asked if staff have a debt limit they're comfortable with.

"Have you established some sort of limit, a threshold you're not willing to cross," she said.

Staff have not, however the region is within its limit as set by the province which says a municipality's debt servicing costs can't exceed 25 per cent of own source revenues.

The region is at about 10 per cent right now.

Regional Chair Ken Seiling took issue with the debt comparators, saying some of the other municipalities don't have all the same services as the region and some don't have to build crucial infrastructure up front and wait for development charges to pay it back.

Staff will bring information to council in 2017 about a potential infrastructure tax.

Earlier this week, Waterloo city staff floated the idea of an infrastructure tax of up to two per cent. The previous Waterloo council twice opted not to implement an infrastructure tax.

The Township of Woolwich has an infrastructure tax that contributed about 1.5 per cent to the tax hike in 2016.

Township of North Dumfries council may include a 1.5 per cent tax hike for capital reserves in 2017.