[dropcap]M[/dropcap]Most Ottawa motorists agree that the state of Ottawa’s road infrastructure is unacceptable. For Richmond and area residents who rely on cars that is no exception. Forgetting local streets for the moment, major routes serving the village such as Eagleson, Franktown and Fallowfield roads, see too little maintenance and are in a poor state of repair.
The “roads” issue is well known to the Mayor and Council. It begs the question of what is really being done. The answer from budget documents is not an easy or satisfying one.
Mayor Watson, in announcing his candidacy in the 2018 election, stated:
“I have heard from residents, and I believe they are prepared to contribute more in order to have better roads and infrastructure.”
Also, our local Councillor Scott Moffatt cited spending on roads as a key achievement from his previous term and as a plank in his re-election campaign.
Way back in May of 2017 Council agreed to spend an extra $400-thousand on pothole repairs and added a one time injection of $2.5 million to resurface roads. And, in Dec. 2017 the Mayor famously found an extra $10 million in budget surpluses to repair crumbling roads, parks and buildings.
The Mayor in a speech to Council bringing forward the 2019 budget stated:
I, like you, knocked on over ten thousand doors during the last election, and I heard loud and clear that people want us to invest more in our city’s roads and infrastructure. Our total investments in roads, bike lanes, sidewalks and facilities will increase by $9.8 million this year – bringing us to $128.5 million invested in 2019. That’s an increase of 8% over 2018. In 2019, the road resurfacing budget will be $49 million – up from the yearly average of $35.5 million over the last Term of Council.
Trying to track the $9.8 million raised through the increased levy is a daunting task and begs the question whether or not anyone can easily extract the “devil from the detail”. Even City staff needed a few days to track down an answer, an answer that simply begs more questions:
The City’s total investment to maintain tax supported assets such as roads, bike lanes, sidewalks and facilities has increased by $9.8 million this year. The increased capital contribution of $9.8 million is identified in the Finance & Economic Development Budget (FEDC Draft 2019 budget Document 3.pdf) on page 112. In 2019, there is approximately $49 million for resurfacing and preserving roads.The $49 million for resurfacing is up from the yearly average of $35.5 million over the last Term of Council. This is due in part to the additional $9.8 million added to the tax base funding.
Unpacking this answer, the 133 page draft budget does include the $9.8 million on page 112 as a “2019 Pressure”. That means the $9.8 was put in the City pot to be applied to infrastructure. What is important for this article is what was actually applied to the Road Resurfacing budget in the approved budget. Total infrastructure funding is a much broader issue and clouds the picture.
Looking at the 2019 budget (888 pages!) and comparing it to the 2018 approved budget one gets a surprisingly different picture:
Looking at the 3 year spend for 2019, 2020 and 2021 using both the approved 2018 budget and the approved 2019 budget shows the total 3 yr spend stays more or less the same at $115.6M and $116.7M respectively. That wouldn’t even account for inflation let alone a 1% tax increase. City staff did not respond directly to this comparison when provided.
There is an average spend of $38.9 million over the three years. In fact, you will see in the charts above, the roads budget increases in 2019 to 43.8 million then decreases significantly in 2020 over what was there in the 2018 or 2019 budget despite the ongoing tax increase! That is surprising given all the political talk of increased spending for the repair of roads. The three year spend reflects no significant increase.
Perhaps somebody with more knowledge of accounting than I have at my disposal can sort this out. I just don’t see the extra tax revenue in the budgeted figures (unless they are buried in other items) or on the road surface for that matter.
To be fair, budgeting is not a precise exercise. It is a best attempt to forecast and allocate resources against fixed and priority needs. Even once the funds are allocated, day to day realities cause managers to reallocate funds between budgets to meet needs. If streets are completely torn up to replace a sewer main they must be repaved which could impact the “Road Resurfacing” budget positively or negatively depending on whether the event was planned or unplanned.
Despite best efforts it is difficult to rely on “budget documents” to get a fix on whether or not road maintenance is going to improve any time soon. I still do not have an answer that I can rely on. The further I dig into the numbers and manipulate them the more I am reminded of a favorite saying of my father in-law “Figures lie and liars figure!”. I am not suggesting anyone is fibbing, the infrastructure gap is just so large and the budget process is such a fluid beast with such complexity it doesn’t serve as a reliable measurement tool for progress.
It isn’t all bad news though. In 2012, City Council approved the Comprehensive Asset Management Program (CAM) and an update to it in 2017 along with approving the Long Range Financial Plan for tax-supported assets (roads, bridges, buildings, parks) and rate-supported assets (water, wastewater, stormwater). These programs appear to be well founded and might serve as a basis for Improved reporting tools for both Council and the public.
The challenge will be to find the funds to close the infrastructure gap. That is going to require innovative approaches to cutting costs and redirecting funds to where they are most needed. Further tax increases should not be the first choice.
In the meantime the public will continue to check the real condition of the roads they travel as the most reliable measure of progress.
Addendum: Following publication of the above article this clarification was provided on July 9 by Isabelle Jasmin, Deputy City Treasurer.
The 2018 budget already included the increase to the roads envelope due to the recommendation in the 2017 Long Range Financial Plan (LRFP) to increase the overall capital renewal tax envelope by $6.8M annually for the next 9 years starting in 2019. In 2019, the City added $3M to the future spend to increase it to $9.8M going forward for the next five years, to reduce the time required to address the gap. The comparison should be made between the 2017 four year spending plan to the 2019 one, not comparing 2018 to 2019. In 2017, the total four year forecast spending was only $135M versus the 2018 budget of $154.8M.
*Editor’s comment: The addendum helps explain the source data behind the Mayor’s comments to Council noted above but doesn’t help with an understanding of why there is a significant reduction in spending in 2020. Neither does it help the public understand why a call for increased spending on roads and infrastructure during the 2018 election wouldn’t be best measured by looking at the post election 2019 budget spending plans for 2019, 2020 and 2021. An expectation was created during the election that roads would get more attention. The public expectation is that spending would be significantly higher than the 2018 budgeted plan rather than virtually flat. If the spending plan is flat for those three years then there is a legitimate question as to why a tax increase was necessary (coincidentally about 9.8 million/year), why it was linked to roads to sell it and where the funds got directed?
As the public is aware, the Province of Ontario is planning major changes to its 2020 cost sharing formulas. Some changes have already been announced and may well hit the City of Ottawa with unanticipated budget pressures. How roads and other critical infrastructure will be maintained will be a key issue going forward. Budget clarity and how spending is forecast is sure to be of increasing interest to the public.