Assets

The municipality of Prince Edward has a lot of stuff. Hundreds of miles of roads, dozens of bridges and many miles of pipe—some to carry water to our homes— others to carry it away. Our municipality owns trucks, graders and fire engines. It has more than 120 properties it knows about— more than 80 these are populated with buildings. Most are old and in frequent need of repair.

To be crass about, it the municipality has just over $221 million worth of stuff—at least that was what it was worth at the end of last year. Were it to buy all this today new, it would cost more than $360 million. That is because our stuff, like all assets, loses value over time, depreciating by about $9 million a year. We aren’t keeping up. We aren’t able to.

Eventually County things needs to be replaced. Trucks last from five to 20 years. Bridges and sewers systems might last up to 80 years. But they all wear out. The baby born in 2010, the year the sewage plant began processing Picton’s waste, may well outlive that shiny new plant on the hill overlooking the town.

We didn’t always count our stuff. It was only about five years ago the municipality began to tally a list of the things it owns, and assign a value to them. Before that, we just fixed things as they needed mending. County elders accumulated buildings and vehicles based on circumstances of the moment, without really knowing if they could afford to own and maintain these assets.

The business of running municipalities, particularly rural ones, changed fundamentally near the end of the last millennium. The province, under the wisdom and guidance of Premier Mike Harris, removed the responsibility of local school boards to raise the funds needed for our schools—primarily to make it easier for his government to slash this spending.

To balance this out, it had to offload something big upon municipalities and the property tax payer. Overnight, provincial roads and bridges became municipal assets. Yet, they were required to maintain their new assets to the standard set, and modified, by the province. ‘Here is the anchor we need you to carry around—and this is the manner and form by which we want you to carry it about.’

Many of these communities, like Prince Edward County, simply didn’t have, never had, the population or tax base sufficient to keep these assets in safe, proper and good working order. Too many roads, too few people.

Increasing amounts of County treasure was being consumed in a desperate attempt to pay for stuff we could not afford. In one notoriously ill-advised gambit, council ventured into a financial engineering scheme called an accelerated roads program. It was a desperate, but poorly understood, attempt to manage this new burden. Five years later the scheme collapsed,leaving the County with $11 million of new debt, and roads poorer off than when it began.

The province understood the problem it had created almost immediately. But even with a change of government at Queen’s Park. the burden of roads and bridges remained on the municipalities’ shoulders. A series of ever more elaborate funding schemes were rolled out by the province to assist rural communities with this mounting burden—but they were too clever, too convoluted. Municipalities didn’t know until a thirdway into the year how much help they would get from Queen’s Park. By then, all its projects had been tendered or let. Occasionally an MPP would show up with a large cheque—like dad prying open his wallet for his profligate teenager on Friday night. It is certainly no way to ensure safe and navigable roads and bridges.

Now even much of this funding has dried up. The spigot is slowly, but surely, being turned off as the province’s fiscal condition deteriorates (see Comment November 13).

It is a broken model. Too much of our property taxes are being consumed by roads, bridges and other infrastructure. It robs resources our municipality ought to be using to fund community aspirations, maintain town halls, improve recreation facilities and parks for our children.

County council will see the first draft of its 2014 budget early next month. Once again the needs of our roads, bridges and infrastructure will outstrip our ability to fund them.

We will once again be asked to give up something to fund the repair or replacement of our roads and bridges. Or else, we will be told to dig deeper into our pockets. Likely a bit of both.

This is a path to zero. If we hope to tether property taxes in the County in the realm of affordability, we will need to cut more of the things that folks love about their County, to feed the needs of our roads and bridges. In time, without a fundamental change in direction, simply maintaining these things will consume all of the County’s cash flow.

The province is content to let municipalities’ squirm and squabble over these impossible choices. But rather than fight among themselves, our County council and others in the same boat are better advised to redirect this energy toward a more concerted effort to insist the province implement and fund a sustainable roads and bridges plan.

Otherwise; the day will come when we must choose between our library or a road. Our town hall or a bridge. Our park or a culvert. That day is nearer than you imagine.

rick@wellingtontimes.ca