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Expressway, sewer costs threaten other city projects
By Eric McGuinness, The Hamilton Spectator, Tuesday, March 23, 2004Hamilton council is being warned the huge cost of the Red Hill Creek Expressway and new solid-waste management facilities requires the city to empty its $100-million Future Fund or slash spending for repair of roads, bridges and buildings.
Finance commissioner Joe Rinaldo reiterates that the expressway and Solid Waste Management Master Plan leave little money for other infrastructure over the next five years.
In a report released in advance of today's budget debates, the city treasurer says a plan to borrow $15 million from the Future Fund this year just delays the spending crunch until next year.
He says the only alternative to raiding the Future Fund is to hope the federal and provincial governments come through with infrastructure grants. But Rinaldo wondered how seriously Ottawa will take Hamilton's pleas if the city has $100 million sitting in the bank.
It's a significant issue because Mayor Larry Di Ianni won election on the strength of his commitment to the $200-million expressway and council has committed itself to diverting 65 per cent of all waste from the Glanbrook landfill by 2007.
Plans are to raise $65 million from property tax for the expressway by 2007 and $92 million for the waste plan by 2009. Extra money will be borrowed, and there's also provincial aid for the expressway.
A table in the new report shows almost $83 million in tax-supported capital spending this year -- $18 million for the expressway, $15 million for waste facilities, $43 million for other infrastructure and a $7-million contingency allowance for industrial park servicing, City Hall or other unbudgeted projects.
The expressway will take $18 million again next year and solid waste $21 million, leaving just $8.6 million for other work unless the city uses up the Future Fund.
Waste plan costs include $14 million for a composting plant, $12 million for a recycling plant, $15 million for collection containers, $11.6 million for trucks and almost $19 million for land, engineering and other costs, plus $7.5 million for transfer stations and depots. There are also plans for an incinerator or other forms of energy-from-waste plant.
The Future Fund was established in 2002 with $100 million of the $137 million realized when Hamilton Hydro was privatized. The idea was to not touch capital or interest for five years, but the city is taking $4 million in interest to ease its budget squeeze.
Rinaldo earlier this year recommended taking $60 million from the fund for capital expenses, but fund governors urged instead a 15-year loan of $15 million.
The commissioner now says all $100 million is needed to maintain infrastructure spending at the 2004 level in future years. And he says the $50 million for 2004 is far less than it should be.
Several councillors say they would support a $60-million withdrawal, but others argue the city can save elsewhere to pay for infrastructure maintenance.