AlvinofDiaspar
Moderator
From the Post:
Mississauga Will Soon Surrender Debt-Free Status
Ageing Infrastructure; City expects to spend reserve in less than five years
Natalie Alcoba, National Post
Published: Monday, September 17, 2007
Mississauga, which proudly boasts its debt-free status, expects to spend its half-billion-dollar reserve in as a little as five years and then go into the red for the first time in three decades.
According to figures released in its 2006 financial report, the city has more than $582-million in its reserves and reserve fund -- money it set aside to invest in things like civic buildings, roads and sewers. But as the infrastructure has aged, Mississauga has had to dip deeper into its savings, according to City Manager Janice Baker.
"We anticipate that by 2012 we actually will be borrowing to maintain our infrastructure," Ms. Baker told the National Post during a recent meeting. "We will have used up most, if not all of those reserve funds."
Mayor Hazel McCallion was unavailable yesterday to comment on the anticipated shortfall, but she has often touted her city's impressive financial record, which is the envy of other municipalities that struggle to meet their bottom line.
Toronto, for example, has been running the city on borrowed cash for years.
Toronto's debt was forecast at more than $2.6-billion this year and expected to grow to the $3.1-billion mark by 2011. This year, the city will spend 12.6% of its property tax revenues on debt servicing, a figure that is expected to jump to 15.4% by 2011.
The last time Mississauga borrowed money was in 1978, when Ms. McCallion took office. The city remains debt free, even though its reserves and reserve funds are dropping--from $645.8 million in 2002 to $582.2-million in 2006. The city's latest financial report notes that while those savings "remain high and very strong, capital pressures required draws from these funds to finance our growing infrastructure requirements."
Ms. Baker said Mississauga spends about $100-million a year on capital investment, most of it going to keeping roads in drive-able condition. Last year, the city also upgraded its transit fleet, surfaced 90 streets, and added to or replaced 21 playgrounds.
As Mississauga grew from a community of farms and pastures to a bustling, thriving suburban municipality, much of the infrastructure -- including the roads, the sewers, even the signalization -- was paid for by the developers who built the subdivisions and industrial areas.
The developers have since handed over that infrastructure to the city, Ms. Baker said. "Well, fast forward 20 or 30 years, those streets have been driven on for all that time," said Ms. Baker. "There are cracks in them, they need to be rebuilt. In some cases they need to be widened because growth has happened and they can't accommodate the level of traffic."
It is costing the city $18-million to construct the Confederation Parkway Bridge over Highway 403, the city manager said.
"When we need to resurface Hurontario [Street], you're talking mega-millions to do sections of that road."
Road maintenance is set to double in the next five years, Ms. Baker said.
nalcoba@nationalpost.com
© National Post 2007
Mississauga Will Soon Surrender Debt-Free Status
Ageing Infrastructure; City expects to spend reserve in less than five years
Natalie Alcoba, National Post
Published: Monday, September 17, 2007
Mississauga, which proudly boasts its debt-free status, expects to spend its half-billion-dollar reserve in as a little as five years and then go into the red for the first time in three decades.
According to figures released in its 2006 financial report, the city has more than $582-million in its reserves and reserve fund -- money it set aside to invest in things like civic buildings, roads and sewers. But as the infrastructure has aged, Mississauga has had to dip deeper into its savings, according to City Manager Janice Baker.
"We anticipate that by 2012 we actually will be borrowing to maintain our infrastructure," Ms. Baker told the National Post during a recent meeting. "We will have used up most, if not all of those reserve funds."
Mayor Hazel McCallion was unavailable yesterday to comment on the anticipated shortfall, but she has often touted her city's impressive financial record, which is the envy of other municipalities that struggle to meet their bottom line.
Toronto, for example, has been running the city on borrowed cash for years.
Toronto's debt was forecast at more than $2.6-billion this year and expected to grow to the $3.1-billion mark by 2011. This year, the city will spend 12.6% of its property tax revenues on debt servicing, a figure that is expected to jump to 15.4% by 2011.
The last time Mississauga borrowed money was in 1978, when Ms. McCallion took office. The city remains debt free, even though its reserves and reserve funds are dropping--from $645.8 million in 2002 to $582.2-million in 2006. The city's latest financial report notes that while those savings "remain high and very strong, capital pressures required draws from these funds to finance our growing infrastructure requirements."
Ms. Baker said Mississauga spends about $100-million a year on capital investment, most of it going to keeping roads in drive-able condition. Last year, the city also upgraded its transit fleet, surfaced 90 streets, and added to or replaced 21 playgrounds.
As Mississauga grew from a community of farms and pastures to a bustling, thriving suburban municipality, much of the infrastructure -- including the roads, the sewers, even the signalization -- was paid for by the developers who built the subdivisions and industrial areas.
The developers have since handed over that infrastructure to the city, Ms. Baker said. "Well, fast forward 20 or 30 years, those streets have been driven on for all that time," said Ms. Baker. "There are cracks in them, they need to be rebuilt. In some cases they need to be widened because growth has happened and they can't accommodate the level of traffic."
It is costing the city $18-million to construct the Confederation Parkway Bridge over Highway 403, the city manager said.
"When we need to resurface Hurontario [Street], you're talking mega-millions to do sections of that road."
Road maintenance is set to double in the next five years, Ms. Baker said.
nalcoba@nationalpost.com
© National Post 2007
