Too big to fix

It’s official—the County can’t afford its roads and waterworks. But then neither can most other municipalities.

How do you manage the unmanageable? How do you stay afloat when your boat is leaking faster than you can bail?

The County’s director of finance, James Hepburn, painted a grim picture last week—of a municipal boat taking on water and no land in sight.

He explained to a committee of council that the cost to maintain and replace the County’s basic infrastructure—roads, bridges and waterworks—is far greater than the municipality can fund on its own. At best the County can only manage to slow the rate of decline.

The total replacement cost of these assets is $679 million.

By his calculations the County needs to spend about $38 million annually just to keep up with maintenance and replacement of this infrastructure. It currently spends about $11 million per year.

The gap is so wide, the County cannot sustain this infrastructure on its own. It can neither borrow, nor raise enough in new taxes to close this gap.

“We can’t do it on our own,” said Hepburn plainly.

The province has mandated that the County and other Ontario municipalities prepare asset management plans. Without it, municipalities will not be eligible for new provincial funding under the Municipal Infrastructure Investment Initiative.

But it is unlikely the province was prepared for what these plans are saying about the decaying state of infrastructure across the province. Nor the growing realization that the property tax payers cannot bear the entire burden alone.

It isn’t just County roads causing funding headaches. Hepburn says the County waterworks are also unsustainable at its current trajectory— warning that the cost to users is certain to climb. This, despite the fact that a comprehensive review of waterworks rates was conducted only five years ago.

“Results are falling well short of projections,” said Hepburn, suggesting revenue is less than expected and costs are greater.

While Hepburn repeated that the County would need help from other levels of government to address its infrastructure funding gap, he suggested steps Council might consider to begin to tackle the immense challenge.

He proposed permanently securing the current level of funding—that is, increasing this budget by at least the rate of inflation each year. He proposed, too, the notion of a capital levy of, perhaps, two per cent or more to be dedicated to infrastructure renewal.

“But would it work?” asked Councillor Terry Shortt. “We’ve heard many other plans around this horseshoe and yet the infrastructure gap continues to widen.”

Hepburn repeated that, no, these measures alone wouldn’t bridge the gap— they were offered merely as responsible steps council might consider to demonstrate it understood the scale of the challenge and its intent to do its part to address it.

“This is a roadmap,” said Hepburn. “It is not a budget. This doesn’t identify funding sources.”

But he couldn’t shake some councillor’s perception they were being asked to approve a permanent tax hike, rather than comprehend the scale of the problems staring them in the face.

The County’s manager, Merlin Dewing, stepped in.

“It is not a plan,” said Dewing. “It is a mirror that reflects our current circumstances.”

Some councillors complained that it was a provincial issue.

“Other municipalities are in the same boat,” said Bloomfield councillor Barry Turpin. “The province should step in.”

Mayor Peter Mertens agreed, but said the province has its own idea about who should pay.

“This is a starting point in our discussions with the province,” said Mertens. “These discussions will not be easy. Every municipality in this province has a massive infrastructure deficit.”

He warned, however, the province was likely to push a greater portion of this burden onto property taxpayers. Provincial officials believe municipalities like Prince Edward County still have room to raise taxes.

“The province wants us to use this tax room first,” said Mertens. “The province hasn’t insisted that municipalities prepare asset management plans because they want to rationalize spending more money.”

Councillor Janice Maynard says residents deserve to know the “cold, hard facts.”

“This is a reality check,” said Maynard. “We need to bring this message to constituents when we are going door to door.”