The
City needs to spend at least $1.55 billion on capital
projects between now and 2012. Staff believe it can
only afford to spend $1.08 billion, leaving a shortfall
of nearly half a billion dollars.
These figures do not include any money to renovate or
rebuild City Hall, or any for the $80-90 million for
the Commonwealth Games, or any money for development
near the airport or in existing City business parks.
The Red Hill Creek Expressway is the only "economic
development" expenditure in the $1.55 billion.
The
list of needed projects includes only what is obvious
today. It is inevitable that more needs will be identifed,
especially in the later years of this 10-year prediction.
For example, the ‘needs’ in 2003-2007 average
$200 million a year, while the ‘needs’ in
the 2008-2012 period only average $108.5 million.
In
this year’s budget over $60 million in capital
projects were "unaffordable". In 2004, the
shortfall will be $101 million.
Where
projects are deemed affordable much of this relies on
borrowing. The City’s external debt will more than
triple by 2007, from $210 million at the beginning of
this year to $643 million four and a half years from
now.
Throughout
the next 10 years, the City will be forced to pay at
least $46 million a year to service its debt. This is
nearly one fifth of the annual spending controlled by
Council and obviously imposes a huge restriction on
all City budget decisions.
"The
City’s state of roads, bridges, buildings, parks,
arenas, water/sewer mains and fleet is rapidly aging
as Hamilton faces an annual infrastructure gap estimated
at $50 million per year". Postponing maintenance
of this infrastructure will simply increase the ultimate
bill. "We can pay now or we can a lot more later!"
"The
City does not have any existing reserves for capital
building replacements, like roads and facilities."
"Reserves declined by $110 million since 2000."
"Building
brand new capital projects or expansion of existing
facilities will often have operating budget impacts
that lead to higher taxes. Development Charges can not
be used to fund these costs."
"Two
major projects – Red Hill Valley and the Solid
Waste Management Master Plan – dominate the capital
budget and will utilize a large proportion of the City’s
available capital financing." The expressway project
will use almost 13% of the total capital spending over
the next 10 years, more than 10 times the amount allocated
to downtown Hamilton, and more than four times the total
allocated to parks.
