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June
25, 2003
HAMILTON TAKES FUN WITH FIGURES TO NEW DEPTHS
Worried
about the cost of building the Red Hill Creek Expressway?
Worried about the City borrowing another $70-80 million
to do the work? Why worry, be happy! A new report presented
to Larry DiIanni’s "Expressway Implementation
Committee" has concluded that it will cost more money
to NOT build the valley expressway.
The
15-page long-awaited "cost-benefit analysis" concludes
that it will cost $78.2-87.2 million to NOT build the valley
expressway. It represents a new depth of deception that
exceeds the normal absurdity levels found in Hamilton politics.
Why
will it cost so much money to NOT build the expressway?
The report arrives at the conclusion by adding together
the following predicted "costs":
$41.2
million
This
is provincial money spent completing the Linc in 1996 and
1997. The reports claims it is "conceivable" that
this money may be demanded back by the provincial government.
In 1995, the Harris government offered $106 million in subsidy
for the completion of the Linc (opened in October 1997)
and the construction of the valley expressway. There has
been NO construction in the valley since 1991, but about
40% of the monies were spent completing the Linc, leaving
$65.55 million for the valley road.
$27-33
million
The
report says this will be needed to fix Red Hill Creek and
manage its storm water so that its flooding doesn’t
threaten the QEW, and the rate at which Windermere Basin
fills up with sediment is reduced. This filling is normal
since Windermere is the mouth of the creek, but the City
wants to keep using this Basin as a final settling tank
for its substandard sewage treatment plant. In fact, much
of the ‘fill’ in Windermere comes from the Woodward
Avenue Sewage Treatment Plant. The flooding threat was allegedly
created as a result of work carried out in 1990 at Queenston
Road, King Street and TH&B crossings before the Rae
government withdrew funding for the valley expressway. Curiously,
the City didn’t get dollars to fix this "problem"
at that time, and apparently hasn’t been worried about
it in the intervening 13 years. The real source of high
flows and erosion in the creek is the unbridled development
authorized by the City which has made much of the Red Hill
watershed impervious to rainfall and thus generates extreme
amounts of runoff.
$2
million
This
is to be spent to "improve the connection between the
Linc and Mud Street with a connection to Mt. Albion Road".
You’ll recall that the City "connected" the
4-lane Linc and the 4-lane Mud Street in 1999 with a 2-lane
S-curve that has subsequently generated truck rollovers.
The City decided to save money (and risk lives) by designing
this "connection" so it could eventually be converted
into a ramp for the Mud Street interchange. The report says
"if this is to be a permanent connection, then it will
have to be straightened and rebuilt as a four-lane connection."
It doesn’t ask why this substandard "connection"
is considered okay for at least eight years (until 2007,
the earliest opening date of the valley expressway).
$1
million
This
is to connect Mt. Albion Road with "a future extension
southerly to Trinity Church" road (currently south
of Rymal Road). The extension was promised by Stoney Creek
to developers who own land in this area. Stoney Creek promised
to pay half the cost. Stoney Creek no longer exists —
but the developers still do.
$2-5
million
This
is listed as the additional cost for combined storm-sewer
overflow tanks. This is not part of the expressway and the
cost is not part of its budget. The City claims that these
facilities would be cheaper if constructed in conjunction
with the expressway. They seem to be still guessing about
how much. If the valley is not paved, there will be a considerable
saving in stormwater costs but that’s one of many things
that are not included in the report’s calculations
such as reconnecting the recreational trail in twenty places,
replacing numerous sportsfields, relocating a major oil
pipeline, etc.
Perhaps
the most revealing part of the report is the value it places
on Red Hill Valley without an expressway. As you’ve
likely guessed it is ZERO dollars. This is precisely the
attitude of the majority of City Councillors. They consider
the valley (and the environment) to have no value.
The
report also considers provincial tax dollars to be worthless.
It admits (for the first time) that the costs of the expressway
at the QEW will total $57.5 million, but doesn’t include
this in its calculations since it is only interested in
the City’s costs. This $57.5 million is to be paid
by provincial taxpayers, and is in addition to the $65.55
million still promised as a provincial subsidy for the remainder
of the road.
When
this is added to the City’s share, it brings the total
remaining cost of the expressway to $196.7 million. This
is the real saving of cancelling the Red Hill Creek Expressway.
And that doesn’t include interest charges, which in
Hamilton’s case alone will exceed $50 million. The
report forgets to mention borrowing costs.
The
report also ‘calculates’ the cost of widening
Centennial Parkway, although it has enough shame to not
include this in the "savings" from not building
the valley expressway. The numbers, however, are interesting.
They estimate "$30 million or more plus costs for property
acquisition". Our understanding (and that of the provincial
government in its 1994 Transfocus study) was that all the
property required for seven lanes in already in public hands.
But
irrespective of this, it is interesting for us to compare
the $30 million Centennial cost with the $196.7 million
price tag of continuing with the valley excessway. The report
authors seem to anticipate this and hasten to add that even
with a seven-lane Centennial Parkway "the future traffic
capacity relief would only be 25% of that provided by the
Red Hill Creek Expressway". Since it’s only 15%
of the cost, that’s not a bad deal. But examine the
phrasing carefully. The claim isn’t comparing the traffic
capacity of Centennial versus Red Hill. It’s comparing
the traffic capacity RELIEF. We presume that’s only
the increase in traffic predicted by the City, not the total
traffic.
Finally
the report devotes three pages (the above is ‘covered’
in 10 pages) to predicting the "Maintenance (Operating)
Costs"for the expressway for the next 100 years. The
standard rule of thumb is maintenance and operation costs
will be approximately 2% per year of the capital costs of
building the road in the first place. That works out to
about $4 million a year for a $200 million expressway. Multiplied
by 100 years, our math gets $400 million. The report authors,
however, obviously have discovered a different kind of math
(perhaps because their calculations are based on the current
maintenance expenditures of the City of Hamilton on its
existing arterial roads). They conclude: "on a Present
Value basis, total maintenance costs over a 100-year period
are about $50 million higher under the Build scenario than
under the No-Build scenario". This is then translated
into "roughly a 0.2% increase in the residential tax
burden".
This
report was prepared in response to a decision by Council
to "develop and participate in implementing a community
information program that explains the importance of this
project to Hamilton’s future". The authors are
allegedly a consultant called KPMG which we presume must
stand for Keep the Public Misinformed Greatly or Krazies
Posing as Mathematical Geniuses. No address or other contact
information for KPMG was provided.
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