An audit of the state of the city's infrastructure paints a “grim” picture, says Ward 5 Coun. Bob Kirwan.
Kirwan was responding at Tuesday's meeting of the audit committee to Auditor General Ron Foster's overview of how well the city is doing when it comes to maintaining its infrastructure. Foster said the deficit has grown to $1.4 billion and is getting larger every year.
“It paints a pretty grim picture of where we are,” Kirwan said. “We have to do something that changes the way we're operating.”
Kirwan said previous city councils since 2002 haven't “done anything to maintain fiscal stability that we're looking for.
“Our budget for roads is $30 million to $40 million behind what it should be, so we're going to continue to fall behind,” he said. “How are we going to close this gap if we don't make some major changes in the way we provide service?”
Foster said previous councils have put in place long-term plans to deal with the deficit, but the results have been uneven. In 2002, councillors passed a plan that would have increased taxes by 2.7 per cent a year for 10 years to close the gap. But that plan faltered after just two years.
A plan to close the water and sewer deficit by increasing user rates by 7.2 per cent a year has only been approved once, in the most recent budget.
Foster said his audit was intended to provide “a financial dashboard so council is in a better position to make those long-term decisions.”
Staff is currently working on a long-term asset management plan, and his audit provides a backdrop to help inform decisions, he said.
“These reports are a little more negative than council is accustomed to,” he added. “But work is in progress.”
CAO Ed Archer said councillors have a range of possible solutions, such as raising taxes, changing service levels, debt financing, increasing user fees and getting support from the federal and provincial government.
But each come with risks, he said. For example, while city taxes are lower than most cities our size in Ontario, there is a limit to how much local ratepayers can handle.
“So the problem didn't occur overnight; solutions won't appear overnight, either,” Archer said. “We're going to need some time to fully address this, if council wants to.”
Foster said other solutions are possible, such as building arenas with more than one sheet of ice, and closing older, costly facilities.
“A twin pad arena is cheaper to maintain than three,” he said.
Mayor Brian Bigger said while the total deficit seems massive, the $1.4 billion figure is what it would cost to upgrade city infrastructure to nearly new levels, something virtually no city would do.
“And last year we made some significant inroads in our water/wastewater,” Bigger said. “We've been making some significant infrastructure investments.”
“It's not in the realm of hundreds of millions … We've taken a lot of action.”
At this point, he said councillors will wait to see the asset management plan, which will allow them to determine the best way forward.
“Then we can make better decisions about other opportunities” and “take responsible action toward (shrinking) our infrastructure gap.”
But Kirwan said in the long run, they are facing a choice between cutting some services or raising taxes.
“We have to accept reality at some point,” he said. “I think we have to stop and say we need to make some big decisions.”
However, Ward 1 Coun. Mark Signoretti to say he was getting tired of pessimistic outlook of some of his colleagues.
“We have to stop talking doom and gloom – that gets pretty tiring,” Signoretti said. “We have to look at the glass as half full, rather than half empty.”
But Ward 2 Coun. Michael Vagnini, disagreed, saying councillors will have to find a way to pay for the massive “unfunded debt.
“That's something we can't lose sight of,” Vagnini said. “To make a comment like that I think is disrespectful.”
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