Greater Sudbury Mayor Brian Bigger says he hasn't changed his mind about the merits of debt financing to pay for some municipal infrastructure projects.
An upcoming meeting will focus on debt-financing as a way to pay for some large projects. Specifically, completing the four-laning of MR35 from Azilda to Chelmsford and resurfacing much of Lorne Street have been talked about as the most likely targets for debt financing. Each project would cost about $30 million.
During the 2014 municipal election campaign, Bigger was critical of rival mayoral candidate Dan Melanson, who proposed borrowing as much as $150 million to close a $700 million gap between what we should be spending to maintain the city's road network and what we actually spend.
Dismissing it as a “credit card” approach, Bigger said in 2014 that Melanson's plan would leave the city unable to maintain roads in the future, since the capital budget would have to be spent on repaying the money.
“I will not bankrupt the city,” he said at the time.
But on Wednesday, Bigger said his position hasn't changed. What Melanson was talking about was a massive debt plan to close the infrastructure gap all at once, he said.
"I was responding to (what he believed was) a proposal to borrow $700 million all at once and fix all capital projects all at once,” Bigger said. “First of all, that's not possible. That would entirely shut down the city. And No. 2, we need to take a strategic approach. We're taking a strategic approach with this council.
However, during the 2014 campaign, Melanson denied he ever proposed spending that much so quickly.
Instead, he said he planned to consult with council on individual infrastructure projects, and they would determine on a case-by-case basis if municipal bonds should be issued to cover the costs.
“I've never said I would spend $700 million in a year,” Melanson said at the time.
Bigger said Wednesday that he's open to debt financing, depending on what they learn from the upcoming meeting.
"We have some of the lowest interest rates at this point in time. The responsible thing for us to do is to look at our infrastructure gap and learn more about the opportunities for debt financing and how that might be to the benefit of the taxpayers."
The goal would be to find a way to accelerate some strategically important projects, he said, without having to raise taxes. With interest rates so low, borrowing makes sense now.
"We've moved for a meeting in the near future that will allow council to understand more about the impacts of debt financing and the opportunity to debt finance,” Bigger said. “Ideally, we would find ways of debt financing within the resources that we've provided in this budget. There would not be any tax increase related to any debt financing that we would do. We're eager to understand what that opportunity is.
“Certainly, we would welcome any kind of federal or provincial funding towards those projects."
While no date has been set for the debt financing meeting, Bigger said another important date is April, when staff will report back on the feasibility of projects presented at the Big Projects meeting held in November. Between the two meetings, the mayor said Greater Sudbury could be moving ahead with a lot of major initiatives during this term of council.
"There are a lot of projects to look at,” Bigger said. “Certainly the idea is to be strategic and to re-evaluate the prioritization of those projects."
