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Windsor $2.6B short in expected infrastructure repairs over next decade

CBC

a day ago

Business
CBC

Windsor $2.6B short in expected infrastructure repairs over next decade

Windsor will need to spend significantly more money to keep roads, sewers and publicly owned buildings in good shape over the next decade. There's a $2.6-billion gap between the amount of money the city needs to keep assets — like roads, sewers and facilities — in generally good condition and what council has budgeted to spend over the next 10 years. That balloons to $5 billion by 2034, if nothing changes. As an immediate measure, staff is asking council to extend the previously approved asset management and road rehabilitation tax through 2026 at a rate of 1.41 per cent. But the costs of maintaining and replacing infrastructure has outpaced that combined tax because of inflation and market pressures, write city staff in a report to council. The report suggests council consider "incremental financial strategies" like going into debt and raising taxes to make up part of the $114 million annual shortfall. While these reports are required by the provincial government, actually covering the funding gap is not. Council will discuss the city's corporate asset management plan on Monday. 54% of city assets in 'poor' or 'very poor' condition The plan sets service level targets to determine what condition everything from city streets to community centres and stop lights should be in. That's $16.4 billion in assets which city staff generally want to be in "good" condition. A 2024 analysis puts just over half of what Windsor owns by value is in good condition with nearly 19 percent – or $2.7 billion – in poor or very poor condition. However, council is urged to update building condition assessments for all city owned buildings which could change those valuations. Ottawa is facing a $10.8-billion funding gap over 10 years with plans to increase water rates while taking on new debt. Toronto is looking at an $18-billion shortfall that it hopes to address by unlocking money through its new deal with the provincial government. Windsor's shortfall comes "despite record levels of capital investment in recent years" according to a report to council prepared by Natasha Gabbana, a senior manager in asset planning. But it also points to data that suggests the city has underfunded certain categories of assets. Report suggest underfunding of Transit Windsor, parks department The biggest chunk of the annual gap is between what the city currently spends on sewers, wastewater treatment plants, roads and publicly owned buildings. But while those amounts are higher dollar figures, they're a small percentage of the overall gap. Some categories that make up smaller portions of city's $16.4 billion in assets require a relatively larger increase to the annual budget compared to their value. Overall, the city's annual funding gap is 0.7 per cent of the actual value of the assets. But for Transit Windsor, it's 3.4 per cent. Information technology, which includes things like software and hardware, is 7.9 per cent, while parks is 2.5 per cent. "This suggests that, relative to their replacement value, these asset groups have a higher funding shortfall than others, indicating they have likely experienced greater underfunding over time," according to the city' asset management plan. Transit Windsor is generally in fair condition and getting those assets into "good" condition will cost an additional $6.8 million annually. Staff say keeping information technology assets in "fair" condition, which is the stated goal, will cost an additional $4.6 million each year. There's policy and staffing changes that will help address the city's overall gap, according to the report. That includes creating three permanent positions and extending a temporary job in asset planning, which the report said is covered by existing budgets. The report also suggests asking for more money from upper levels of government or entering into partnership agreements with neighbouring communities to share resources and costs.

Municipal service reductions being considered

CTV News

6 days ago

Business
CTV News

Municipal service reductions being considered

Municipal service reductions being considered Council has directed city staff to prepare three additional business cases about potential service reductions for consideration during 2026 budget deliberations

City plans to take on debt to cover billions in infrastructure repairs

CBC

7 days ago

Business
CBC

City plans to take on debt to cover billions in infrastructure repairs

Some city councillors are worried about how much debt the city may take on over the next decade to maintain everything it owns, from water pipes to roads to the nozzles on fire hoses. At a finance committee meeting Tuesday, councillors discussed two reports: one that takes stock of the condition of all the city's assets and a second that lays out a plan for how the city will pay to repair and renew a portion of them. One of the reports shows a whopping $10.8-billion gap over 10 years between how much money the city needs to maintain things like roads and rec centres — and the funding it is currently able to spend. "It's just such a large number to wrap your head around how we're going to finance this," Coun. Riley Brockington said. According to the report, that gap is driven by factors felt in municipalities across the province, such as the effects of climate change and the rising costs of construction. City staff also laid out a plan for how it will fund infrastructure work it pays for through water bill revenue. The plan for work paid for through property taxes is expected in the fall. Neither plan has been updated since 2017. Councillors approved the city's plan to maintain Ottawa's aging water infrastructure by taking on new debt and increasing water rates, an approach staff described as "prudent" but that some councillors and advocates slammed as short-sighted. "Given the massive amounts of debt that we are loading on, is there not a message here to get back to basics?" Coun. Shawn Menard asked at the meeting. Raise rates, issue debt Water infrastructure is just one chunk — though a big one — of what the city owns. The city needs $4.8 billion over the next decade to address "priority needs" in its water, wastewater and stormwater services. Nearly all of that money will go to repairs, with a sliver set aside for new projects. But the city is short on funds. It has to drum up $169 million more each year for the next 10 years. It plans to do it by charging more for water service and taking on more than $1.7 billion in new debt. Water rates are now set to increase by five per cent per year, or about five dollars per month for the average household. 'Good debt,' mayor says Staff say the approach is sound financial management. "We knew this was coming ... for quite some time," said Cyril Rogers, the city's chief financial officer. "If you look at our reserve balances, we've been actually investing, investing. Saving, saving, saving." City staff don't expect the approach to exceed the city's self-imposed threshold for spending to service its debt until 2030. Mayor Mark Sutcliffe said investments in necessary infrastructure count as "good debt." "If we were using debt to cover our operating expenses, that would not be ideal. But if we're using debt to pay for assets that we will use over decades, then that's a responsible way to approach things," he said. 'Sunsetting' properties Residents who spoke at the meeting were unconvinced. James Murchison, a representative of the non-profit group Strong Towns Ottawa, called the level of deferred maintenance a "tsunami." Carolyn Mackenzie, a member of the Glebe Community Association, said she felt the city's approach fails to "meet the moment." And Neil Saravanamuttoo, executive director of CitySHAPES, said in an interview he thinks people should be "very concerned" about the funding gap. He worries the city will eventually be forced to hike property taxes or close some facilities altogether to raise the money needed. The reports were approved at committee and will go to full council on June 11.