CITY FACES $195.9M INFRASTRUCTURE GAP

'OUR ASSETS ARE CRUMBLING,' SAYS COUNCILLOR

The early indicators of what it will take for Hamilton to close its so-called infrastructure gap paint a grim picture for taxpayers.

And the initial sticker shock — $195.9 million annually over 10 years to make up the difference — has some councillors balking that the figure could translate into reality.

"Don't try to fearmonger us into doing something that may not be necessary," Coun. Lloyd Ferguson told staff after listening to a report about the state of municipal infrastructure June 15.

Others, however, argued city politicians have made "political decisions" to not keep up with what should be spent to properly maintain its assets.

"And that is on this elected body," Coun. Maureen Wilson said.

The 10-year forecast applies to core assets: roads, sidewalks, bridges, sewage overflow tanks, water mains and stormwater pumping stations.

Tapping the tax base to close the massive gap would mean annual levy hikes of about 20 per cent — or roughly $850 for the average household, said Mike Zegarac, general manager of finance.

"There's still going to be some additional requirements," he added in explaining Hamilton's provincially mandated assetmanagement exercise.

Other assets, such as fire halls, museums and parks, also need to be analyzed. And by 2025, the city must present a management plan with proposed service levels for all of them.

"This is a Mount Everest amount of work that we have in front of us," Patricia Leishman, director of corporate asset management, told council, noting that poor, dated or non-existent data was a roadblock in making an accurate assessment of the city's assets.

The price to replace all of Hamilton's core assets is about $21.3 billion. Overall, they are in average or fair shape, 28 years old on average and with half of their service life behind them, a staff report noted.

Infrastructure challenges have mounted over the past 150 years due to underinvesting, lack of sustained government funding and spikes in growth, the report noted.

"Every municipality is having this exact conversation," Leishman said, adding the city must strike a balance between spending, life-cycle costs, performance and "appetite for risk."

Asset management — how best to maintain them through strategic investment — was a focus of a scathing city auditor's review of Hamilton's roads program last year.

Of 25 recommendations, seven focused on "poor asset-management practices," Leishman noted.

The state of the city's assets must be "quite evident" for Hamilton drivers, Wilson remarked.

"Our assets are crumbling and they have been underfunded."

The city's ability to generate revenue through property taxes is limited and the province has downloaded services onto municipalities, the Ward 1 councillor acknowledged.

But council also opted for "zero dollars" for capital needs in 2014 and a "zero per cent levy contribution" in 2021. "And just for the record, I voted against that," said Wilson, who was elected in 2018.

In response, Mayor Fred Eisenberger said he couldn't recall a councillor "advocating for a 20 per cent increase" in taxes during 2022's budget talks.

Municipalities across Canada have grappled with infrastructure deficits for years, mostly due to "stagnant resources" from the federal and provincial governments, Eisenberger said.

Ferguson, however, said he had "trouble taking terribly seriously" the report's dire forecast due to the noted lack of reliable data.

In fact, facilities staff are doing an "amazing job" at keeping buildings in good repair, he said.

"I just have a little discomfort with these great big numbers that get tossed at us as a way to try to have us go back to the taxpayer for the problem. I just want to make sure they're real."

Leishman and her staff aim to firm up life-cycle data for city assets to help make "more informed choices" and better define the funding gap over the next three years.

For now, staff don't suggest any financial commitments, but the plan is to use the analysis to help guide 2023 budget deliberations.