|
April
2001 Newsletter
Expressway
Dropped from Capital Budget
For
the first time in many years, it appears the Red Hill Valley
expressway will not be part of the local government's capital
budget. A draft capital budget was presented to Hamilton
City Council on March 28. The only reference to the "Freeway"
is a $12.5 million allocation for the Linc-403 interchange
project.
The
accompanying report warns of "a very difficult capital
budget process in 2001" and advises councillors of
the extreme financial difficulties facing the new city.
For example, despite the exclusion of the valley expressway,
the City's debt is projected to more than double by 2004
from $192 million last year to $411 million in 2004. The
external debt portion last year was $145 million and this
is expected to rise to $279 million by 2004. Debt will rise
further in 2005, before beginning a slow decline, but will
still be 50% higher in 2010 than it was last year.
The
expressway is not the only casualty of the ballooning fiscal
crisis. More than 40% of proposed capital spending didn't
make it into the draft budget. The report notes that "this
means that $76 million in capital projects will be deferred
for future years to compete for capital dollars in a fiscal
environment of increasing infrastructure repair and rehabilitation
pressures".
For example, the proposed Mountain Police Station and the
4-pad arena are not included in the proposed budget and
the staff warn that "such initiatives and projects
cannot be approved without sacrificing / eliminating other
hard infrastructure rehabilitation projects."
Instead
the staff are recommending that council: "begin to
address historical deficiencies particularly in transportation
(roads and transit); fund critical environmental projects
such as the Rennie Street Landfill site remediation; begin
to fund historical obligations and previously approved projects;
and lay the foundations for a more sustainable capital financing
strategy as the City moves to a pay as you go' policy."
A
major part of the financial crisis is the failure of previous
councils to adequately fund maintenance and rehabilitation.
In February, senior city staff reported that the water and
sewer system will require over $2 billion in expenditures
this decade, or an average of $210 million per year. By
comparison, last year the budget was $89 million. A 15%
rate increase in water and sewer rates is virtually certain
for this year, and EACH of the next five years. This will
double the rates by 2005. And this will hardly begin to
address the shortfall.
In
fact, it will raise barely 30% of what is required for the
water and sewer pipes in this decade, leaving the other
70% to be collected in the 2006-2010 period. And an additional
$600 million will be required on top of this to fix the
sewage treatment plant and stop the flows of raw sewage
into our waterways.
The
March staff report warns of similar problems in maintenance
of the city's road systems — "$200 to $300 million
of deficiencies and funding shortfalls".
This
crisis is directly connected to expressway spending, on
both the Linc and the proposed Valley route. Senior staff
made this clear when they informed Regional Council about
the crisis more than four years ago. In a December 1996
report to the regional budget committee, senior staff stated:
"Maintenance, rehabilitation and replacement of existing
infrastructure has been deferred as funding has been redirected
to special projects such as the Freeway, PaRCIL, and the
Emergency Communication System."
By
that point, staff reported that the shortchanging of the
water and sewer infrastructure had exceeded half a billion
dollars in the 1990s alone. Their report also warned that
"Postponement of maintenance of existing infrastructure
will serve to aggravate the existing problem resulting in
the need to replace infrastructure sooner than need be.
The costs of repairing and replacing infrastructure will
be 5 to 6 times more costly ..."
In
the current fiscal situation, it is difficult to imagine
how a new expressway could be financed.
|
