November 18, 2016
Waterloo’s infrastructure gap has been in the news this week, but some reports have been full of misinformation about next year’s taxes and that needs to be corrected.
First, we’re being very deliberate. The earliest Waterloo would change its approach is the 2020 budget after some robust public engagement. So, the 2017 property tax increase will be exactly what we said it would be when we passed our 2016-2018 budget in February: 2.3%, just above inflation.
Second, there is a good reason to invest more money in our infrastructure. Our quality of life depends on well maintained roads and bridges, parks and trails, and recreation facilities. These facilities deteriorate over time if we don’t invest in them — and those built decades ago need to be renewed so they can be enjoyed by the next generation.
In the last election, I ran on identifying and solving this important problem. When your roof leaks or your brakes start to squeal, you have to fix them. Putting that work off invites disaster. We knew there was a gap between what we were spending on infrastructure and what was needed to keep our assets in good repair, but we didn’t know how big that gap was. We spent the last two years working with industry-leading experts, so now we know.
Here are the details:
- The City owns and manages $1.6 billion in assets, or $38,000 per household. These include roads, bridges, underground pipes, parks, trails, sidewalks, and facilities.
- We’re spending $22.5 million annually to maintain, repair, and replace these assets. This includes gas tax funding, property taxes, water and stormwater rates, and other grants.
- We need to spend $42-45 million annually, which means we need about $20 million more each year.
- Currently 17% of our assets are in very poor condition, including storm water ponds full of sediment and failing roads.
- If we don’t invest more, 25 years from now 50% of our assets will be in very poor condition (see Figure 1 below).
- If we invest $20 million more each year, we can keep them at the same level (see Figure 2 below).
This is a common problem across Canada, and this is why we’ve been calling on provincial and federal governments to do more. Thankfully, they are.
By 2019, Queen’s Park will provide an extra $2.5 million per year to Waterloo. The federal government is working on its own strategy, and we hope to hear good news in its next budget. But we know they won’t close the entire gap, so we need to find a made-in-Waterloo solution.
On Monday, Council directed staff to work on a Long Term Financial Plan next year, keeping all funding options on the table. This includes creating an infrastructure levy, taking on debt, using provincial and federal grants, and redirecting existing revenue in the budget from other areas. It could also involve lower standards for infrastructure.
Most importantly, we also directed that Waterloo do something no other municipality has done: consult the public on infrastructure performance and funding tools. We will launch telephone surveys and take input online, and this will happen every four years as we continually update the plan with the latest information.
By tackling this issue, we won’t be alone — Aurora, Barrie, Brampton, Kawartha Lakes, Kingston, Mississauga, Newmarket, Richmond Hill, St. Catharines, Stratford, and Woolwich have all chosen infrastructure levies to address this common problem in their communities. A separate levy is transparent for their residents – they know where that extra money is going.
We need to know what the right approach is for Waterloo. And that’s why we’re taking a deliberate approach that includes robust public engagement before we make a decision on how to close the infrastructure gap.
I firmly believe that the next generation deserves the same quality of life as the previous generation. Last election, I promised to get this done.
I’m looking forward to the conversation ahead.