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Road portion of upgrades at risk if increase is held to 2.5 per cent, city official says
By Joanne Chianello, Ottawa Citizen
City council’s current commitment to keeping property taxes to a 2.5-per cent increase until 2014 may delay necessary sewer upgrades going forward, a city official warned Monday.
Dixon Weir, the city’s general manager of environmental services, told council’s environment committee that the rate-supported water and sewer budget could cover the costs of the planned infrastructure program, but he raised doubts as to whether there was enough money in the tax-supported budget to pay for road reconstruction included in the projects.
“The concern is whether there will there be the tax-side funds able to continue,” Weir said. “If not, we’re in the process of doing a consequence review -a risk review -to see what would be the consequence of deferring or delaying that for a few years.”
As expected, the environment committee passed the draft budget that increased water and sewer rates by 3.9 per cent in 2011, translating into an additional $24 a year for residents who already pay an average of $639. This year’s water and sewer budget came in at $264.4 million, a $20-million increase over last year that still requires the approval of full council.
By law, water and sewer operations must be paid for by rates charged directly to homeowners, which is why its budget is completely separate from the one that determines property taxes. Rates have gone up dramatically over the past few years, mainly because the city has been upgrading aging pipes and sewers and investing in a five-year plan to keep sewage from spilling into the Ottawa River.
Indeed, rates were to rise by nine per cent this year, but higher-than-expected demand for water in 2010 from non-residential users allowed the city to cut the planned rate increase by more than half without cancelling any projects.
Weir’s warning applied to the property-tax budget side of things.
So-called “integrated infrastructure programs” are those that include water main, sanitary and storm sewer upgrades, plus road reconstruction. This work is usually done at once, which makes sense.
For example, the $45-million Carling Avenue reconstruction project slated to start in about a month will include replacing a water main that serves 400,000 people and installing new sewers, as well as repaving the road, creating cycling lanes, fixing the road, constructing new sidewalks and improving landscaping.
All the road construction in the project -in fact, anything that doesn’t have to do with water and sewers -is paid for out of the city’s operating budget, which comes from property taxes.
However, Mayor Jim Watson’s pledge to keep tax increases to 2.5 per cent for the next three years may make it difficult to afford road-related parts of planned projects.
The transportation department budget forecasts $79.9 million for infrastructure services in 2011, but that drops to $24.8 million in 2012 and further in 2013 to $17.8 million. The 2011 expenditures include projects that were accelerated because of the federal and provincial stimulus programs meant to boost the economy during the recession.
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