A $1,000 literary contest prize.

A $2,100 Phantom 3 professional drone.

A combined $15,000 to help a Scout troop and minor hockey team travel to out-of-town events.

About $50,000 over two years to pay for an outreach worker employed by a charitable agency.

Two years of funding worth $60,000 to build a website for an arts group.

Those are just a few of the grants, sponsorships, salaries and office purchases paid for by councillors from the old City of Hamilton from a little-known discretionary $100,000 budget that is supposed to be spent on infrastructure.

The cash is part of the annual $1.7-million area rating reserve fund available to each councillor in wards 1 to 8.

Each old city councillor can decide how to spend the $100,000 without formal staff or council oversight — and often out of public view.

Critics of the discretionary budget argue it looks like a "slush fund" for old-city politicians because they pick and choose funding recipients without public oversight or a formal vote of council.

They also want to know why the spending is allowed under council rules that otherwise limit city politician office budgets to donations or sponsorships of $350 per organization.

"I just don't see why you need to make that amount discretionary. It's highly anomalous," said Richard Leblanc, a York University associate professor specializing in governance and ethics.

"I am not suggesting wrongdoing is occurring. But the point is how do you know without transparency and robust auditing?"

Contentious cash

Area rating spending has always been contentious in Hamilton. The special funding — currently $1.7 million per ward, per year — was created in 2011 out of a council compromise meant to even out postamalgamation tax rates.

Basically, suburban wards started paying more taxes for services while wards 1 through 8 — rather than getting a corresponding tax break — received dedicated repair cash for old-city infrastructure.

Over the years, councillors have earned both criticism and praise for creatively interpreting the definition of "infrastructure" spending. Most area rating spending decisions are vetted through a council vote. But the public almost never sees how councillors propose to spend their discretionary $100,000.

Discretionary and out of sight

The individual spending items for the $100,000 are not listed in public budget documents and do not require staff approval or a council vote.

That's because the discretionary fund is meant for small, in-year infrastructure priorities or one-time maintenance jobs. They are "not of the financial scale" to warrant individual consideration by council, said city finance head Mike Zegarac.

But small amounts add up, countered Leblanc, who was asked by The Spectator for his opinion on the discretionary spending.

Since 2014, the discretionary funds added up to $3.2 million or $400,000 per old-city councillor, although they don't always spend the full amount in a given year.

"There should be transparency … Just having a loose guideline is not adequate. It introduces the potential for conflict of interest," said Leblanc, a director in York's masters of financial accountability program.

He said at a minimum, he would expect the city's internal audit team to track and report on the spending. "But as a taxpayer, I would also expect to be able to see that spending in public documents, ideally with a few clicks of a (computer) mouse."

(Worth noting: Ward 3 Coun. Matthew Green started posting his discretionary spending on his website in November.)

In a recent letter to council, financial planner Viv Saunders called the discretionary cash a "slush fund" that appears geared to "aid incumbents in getting re-elected."

The avid city hall watcher listed examples of spending that did not appear to fit the discretionary policy, including festival and movie night grants, funding for website creation and a staff position at a local charity.

You could argue the dollar amounts spent on non-infrastructure projects are relatively small and the causes often worthy of support.

But that didn't prevent criticism of former mayor Bob Bratina when he used his office budget surplus to make a $10,000 donation to the United Way in 2011. At the time, many politicians and residents vocally pointed out council members are limited to a $350 donation or sponsorship for any given organization.

The controversy prompted an updated donations policy for council members. It also forced Bratina to break up his donation into $350 cheques to individual agencies supported by the United Way in order to stay within the rules.

Saunders argued using the discretionary infrastructure cash for sponsorships makes it look like councillors are skirting the donation limit to save their office budgets.

Saunders, who previously went to court in an unsuccessful effort to contest city politician election expenses, asked council to pull the discretionary funds out of the 2018 budget.

The city's finance committee considered Saunders' letter last month and asked staff to report back on whether the rules around discretionary area rating should be tightened.

Oversight confusion

So what kinds of projects qualify for discretionary infrastructure spending?

City reports on the area rating reserve offer random examples of appropriate spending, including "historical plaques, small beautification projects and one-time maintenance initiatives."

It's worth noting $100,000 won't repave your street or fix a bridge. But it might pay for a few hundred metres of new sidewalk, or smooth a rutted dead-end residential court.

Zegarac added the discretionary cash is not limited by policy to city-owned infrastructure, so long as the spending has a "community benefit" or helps leverage funding from other agencies or levels of government.

But he also emphasized city staffers do not formally vet the eligibility of discretionary spending proposals, although they sometimes offer advice. "We don't approve those (expenditures)," he said. "Those are at the discretion of councillors to approve."

Nonetheless, several councillors told The Spectator they rely on city staff to give a thumbs-up — or not — to prospective $100,000 budget spending.

Coun. Terry Whitehead — who had several spending items questioned in the letter from Saunders — called city staff "gatekeepers" responsible for ruling if a proposed project is eligible. "I regularly consult with staff on these expenditures."

For example, Whitehead said he had prepared a draft motion to bring before council last May to authorize a time-sensitive $5,000 donation to help the 81st Scout Troop "represent Hamilton" at a national jamboree in Halifax, N.S.

His office provided The Spectator with a copy of the draft motion. But Whitehead said city finance staff later advised him a motion was unnecessary.

Coun. Jason Farr has also come in for public criticism of discretionary spending on festivals as well as staff and a website not owned by the city.

The Ward 2 councillor said he supports the idea of making all discretionary spending public and easily accessible, arguing his list of funded projects "as a whole, would see wide acceptance."

"You can call it a slush fund, but the reality is … these are legitimate requests being made by the community. In each case, using my discretion, I am asking the question: is it of a benefit to Ward 2 or the greater community?"

City staff will report to council on area rating funding — including the discretionary fund and its spending guidelines — later this year.

All eight old city councillors provided discretionary $100,000 spending records for four years upon request by the Spectator (and City Hall watchers like Gabriel Nicholson) last November. The Spectator copied the project descriptions, years and committed/spent dollar amounts into a single document, with tabs by ward.

We checked with councillors on obviously missing or confusing spending entries, but otherwise made minimal changes to the information as presented.

The Councillors How is the money spent?

Spending records provided by councillors show a majority of discretionary spending goes to projects or repairs that arguably fit the vague policy guidelines. Since 2014, much of the cash has been spent on traffic safety measures like speed bumps, replacing curbs and medians, installing memorials and historical plaques, fixing fences and repairing city-owned social housing units.

But critics argue the fund is also sometimes used like a backup office budget or parallel grant system for community groups. In recent years, tens of thousands of dollars have been spent on festivals, movie nights, team sponsorships, opinion polling on LRT and school greening programs.

Here is a small sample of spending by councillors.

Ward 1 Aidan Johnson

$1,000 for HA & L magazine literary prize (2015)

$1,275.15 for Strathcona and Kirkendall movie nights (2015-16)

$50,855.82 for participatory budget co-ordinator (2017)

Johnson, a first-term councillor, said he initially took his spending cues from predecessor Brian McHattie, who often pitched "social infrastructure" spending. But Johnson added he has become "increasingly attuned" to differing opinions about discretionary spending and has changed course accordingly. For example, in his first year he used the discretionary pot to fund a literary prize, movie nights and a seniors' fair. But by 2017, all but $400 of his discretionary cash was used for road repairs and public consultation on area rating spending.

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Ward 2 Jason Farr

$60,000 for Hamilton Arts Council website (2014-15)

$50,000 to help pay for a Ward 2 "community animator" with the Social Research and Planning Council of Hamilton (2015-16)

$26,000 for four years of support for Racalmutese Maria SS Del Monte festival

Farr said in the past he "broadly" interpreted the infrastructure definition to include "social" projects like the arts council website. Now, he said he relies on the city "enrichment fund" grant process — which did not exist in 2014 — to handle such community requests. He said the idea of a "community animator" — someone to engage with Ward 2 residents on planning priorities — was vetted through his participatory budget process, which allows ward residents to vote on area rating projects.

Farr said he sometimes uses discretionary funds to support community events like the Maria SS. Del Monte festival celebrated in honour of Hamilton's twin-city connection with Racalmuto in Sicily, but tries to ensure it is spent "on actual infrastructure" such as fences, portable toilets or stages. "I didn't fund a festival; I funded temporary infrastructure for that event," he said.

Ward 3 Matthew Green

$1,510.72 for Lifesaver Park barbecue (2015)

$66,900 to fix CityHousing Hamilton units (2015)

$28,920 for cameras at 30 Sanford Ave. S. (2016)

Green posted his discretionary infrastructure spending on his website late last year as part of a promised "open government" Ward 3 effort. He noted he has a motion coming next week that calls on city boards and agencies — such as the Hamilton Waterfront Trust — to post financial information online. "If I'm asking boards and agencies to do it, I should do it, too."

Ward 4 Sam Merulla

$15,364.77 for McQuesten Fitness Trail (2014)

$33,010.72 for seasonal wreaths for Kenilworth and Ottawa Streets (2014-2016)

$45,000 (in $5,000 grants) for school greening projects in his ward (2017)

Merulla said he thinks the discretionary funding is useful for time-sensitive spending, but suggested the city could publish quarterly reports on funded items. He said his school "greening" grants equate to Ward 4 park improvements. "In some areas, this is all (residents) have for green space."

Ward 5 Chad Collins

$65,000 to create an east end food bank (2014)

$10,000 for east end air monitoring station (2015)

$19,288 for escarpment cleanup (2016)

Collins said the discretionary fund is useful for projects or work "that doesn't appear to have an obvious home" in the city budget. He pointed to cash he used to pay for a cleanup of trash tossed from the escarpment edge onto land not maintained by city parks.

Ward 6 Tom Jackson

$90,672.50 for concrete-to-floral median conversions (2014)

$3,534.13 for anti-graffiti cameras in Fay and Lisgar parks (2016)

$1,350.80 for poll on light rail transit project (2017)

Jackson said he values the discretionary fund because it can quickly cover emergency expenses, such as safety fencing at Albion Falls. He also pointed to the ability to improve planned capital projects, such as adding a flower bed to an otherwise concrete traffic median.

Ward 7 Donna Skelly

$14,414.37 for various bocce club equipment issues like heaters, doors and chairs

$33,555.38 for a power source for events in Sam Lawrence Park

$35,475 for "coach" lanterns along Concession Street

Skelly, who took over from predecessor Scott Duvall (elected Hamilton Mountain MP in 2015) in 2016, said she is also concerned about some of the discretionary spending financial planner Viv Saunders listed in a letter to council and wants to see more transparency around the spending envelope. She suggested council could vote on any discretionary expenditure worth more than $10,000.

Ward 8 Terry Whitehead

$3,842.51 for various neighbourhood movie nights (2014)

$2,150.36 for a Phantom 3 professional drone (2015)

$15,000 to sponsor a Scout troop and Hamilton Huskies minor hockey team for out-of- town travel (2017)

Whitehead said dollars he green-lighted for neighbourhood movie nights were typically used to advertise newly completed capital projects paid for with area rating funds. For example, he used $11,000-plus to pay for and advertise a Buchanan Splash Pad Movie Night in 2016 after the project was done.

Whitehead says he uses the drone to do "due diligence" on development application or tree-cutting plans. He says he considers it infrastructure, not an office budget item. He said he offered to bring council motions forward to authorize funding for Scout troop and Huskies trips, but city staff told him they were not necessary.

- Area rating: Boring name, colourful history