Tag Archives: Mel Lastman

So Toronto is going deeper into debt (and so is Saskatoon)

Does this sound at all like Saskatoon?  It was Toronto under Mel Lastman who felt he needed to freeze taxes.

Perks noted that Lastman froze property taxes during his first three years in office. During that time, the Toronto Transit Commission was rebuilding 18-year-old buses instead of buying new ones, and the backlog in road repairs was growing.

“We had a mountain of backlog. We were in a profound crisis. Between provincial downloading and Mel Lastman’s tax freeze, we had a giant hole. Now we’re catching up.”

This week’s flooding demonstrates the need for sturdy infrastructure, said Di Giorgio, who on Tuesday was visiting homeowners hit with flooded basements.

“When you talk to people, they’re very irate, and you can’t blame them. They’re really upset that this kind of thing would happen and they blame the city for not having proper infrastructure.”

Borrowing allows the city to do more capital projects each year, rather than put them off to future years, he said.

“To do things quicker, you have to go more into debt. I do think it’s okay to grow your debt a little bit at a time each year, because you do have to replace infrastructure.”

This is what Toronto’s debt is being spent on.

In 2011, on Ford’s insistence, the city froze property taxes. The next year he limited the increase to 2.5 per cent, in line with inflation.

About half of the borrowing was to pay for transit infrastructure, such as replacing worn-out vehicles. Other big-ticket infrastructure spending went to areas such as roads, parks and housing.

That is what happens when you put off infrastructure and transit spending.  Eventually it catches up to you and it’s exactly what we are doing here in Saskatoon and it will take a couple of terms to catch up which will mean more debt.

Holding the line on taxes is always popular but those costs don’t go away.  In Saskatoon it is our roads where we used to pay for but not longer do.  Doubt me?  Check out the 2012 Roads Report which gives funding options to city council.  It includes this line.

Although funding for paved roadways has, in general, increased over the past decade, from 2003 to 2008 the annual roadway budget only increased by 0.5% per year, while  the cost of treatments increased by 15.2% per year. This erosion of purchasing power, combined with the general ageing of the network, has resulted in a degradation of the roadway network since 2002.

The result? Check out this 2012 article in The StarPhoenix by David Hutton

Mike Gutek, the city’s infrastructure services manager, said old crumbling roads such as Koyl are a “victim of priority.” The road rates as “very poor” under the city’s ranking of which roads require resurfacing.

Roads are ranked based on condition and traffic volume. The city has 650,000 square feet of roads that are considered in “very poor” condition, but can treat 15,000 square feet per year under the current budget, Gutek said. Ten per cent of local roads in Saskatoon are rated as “very poor” and in danger of failing, according to the city’s latest assessment.

“(Koyl) has not failed. It’s in horrible shape, the asphalt is very old and it doesn’t drive that well,” Gutek said. “It’s really our worst condition (of road), but it hasn’t failed yet (and turned to gravel).”

Saskatoon has fallen way behind in road maintenance and repair as costs for fuel, asphalt and labour have skyrocketed.

Since 2003, the road repair budget has grown 31 per cent while the cost of fixing roads has jumped 216 per cent. But council declined last year to add a phased-in property tax increase over eight years to bring the annual roads budget up to the point where the city isn’t falling further behind annually. Instead, one-time funding was added for a number of individual projects.

City administration estimates $18.5 million per year is needed to maintain the current state of the roadway network. In 2012, roughly $9.5 million will be spent on roadway rehabilitation, including the discretionary funds.

Koyl is not in the city’s five-year road rebuilding plans and likely wouldn’t be fixed until the annual funding amount surpasses $18.5 million, city staff say.

Where does the money go?

The infrastructure department is tackling as priorities high-traffic roads that have completely failed or on the brink of turning to gravel, Gutek said. 

Council likes to pick on Mike Gutek but when they give him a fraction of what he needs each year, what are city staff supposed to do?  Year after year city council says that they hear that roads are our number one concern and instead hold the line on taxes and don’t add any more new money into roads.

So when does Saskatoon start to dig ourselves out this infrastructure hole that City Council has dug us into and how long will it take?  How much debt will we have to take on to pay for these years where council made a negative infrastructure investment.  As we have seen here and in Toronto, unpaid infrastructure bills come due with interest.