Tuesday, August 31, 2010

Infrastructure renewal planning starts
(excerpts from article published by The Daily Gleaner, August 31/10)

Money to be put toward facility upgrades

Fredericton city councillors have struck a policy on how to start grappling with repair and regular replacement of capital infrastructure between now and 2030.

At their first budget planning session Monday night, councillors voted to continue with their 20-year plan to repair and upgrade 90 per cent of the city's facilities and services and spend 10 per cent on new projects based on an annual five per cent increase in the capital budget.

In 2010, the city decided to increase its capital spending by four per cent to start renewing existing services. Deputy mayor Dan Keenan and Coun. Jordan Graham voted against committing to a fixed annual increase and a fixed division of how the capital dollars will be spent.

Finance and administration committee chairman Coun. Mike O'Brien wasn't surprised at the early dissent on the policy statement, saying the topic is likely going to resurface between now and the final 2011 budget document in mid-December.
Across Canada, the nation's 4,000 municipal governments are realizing that they can't continue to spend only on new roads, streets and services, without setting aside adequate funds to do capital repairs to existing systems.

Acting city treasurer Tina Tapley showed councillors how the figures change based on a lower contribution. If the city sets aside four per cent in extra capital spending over and above increases in the consumer price index, instead of five per cent annually, the city will still have about $50 million in infrastructure upgrades to be done in 2030. At five per cent, the infrastructure deficit would be $12.5 million.

O'Brien is comfortable with the city striking a reasonably aggressive approach to ensuring that the investment of taxpayers in existing infrastructure is maintained. The finance committee chairman said rather than tax hikes, part of the budget process is going to look at efficiencies, reduced service levels in some areas, and trimming budgets in order to hold the tax levels.

"You just don't cut willy-nilly. If you're going to try to find savings, you have to reduce a service and an expenditure that's sustainable. A one-time cut of $1 million doesn't do you any good," he said. "When the mayor and I have talked about a tough budget process, this is what we're talking about.''

Twenty years ago, council opted to eliminate the city's long-term debt and incorporate capital spending into the general fund budget, which has been dubbed pay-as-you-go. But O'Brien said by focusing so much on eliminating debt, the trade-off was that councils over the past 10 years weren't as focused on renewing and repairing the inventory of pipes in the ground, streets, curbs and sidewalks.

"It's up to us to take a tough policy stand to complete the capital projects that we're in the midst of because we're of the unanimous opinion that it was essential to grow the city," O'Brien said. "We have to make that same tough policy decision that council did 20 year ago to make our infrastructure sustainable."

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