At $944.2 million, the cost of rehabilitating and eventually replacing all of Stratford’s infrastructure, buildings, machinery, equipment and vehicles over time could see city residents paying as much as 11.2 per cent more in taxes – roughly beginning at an annual 0.7 per cent increase – by 2031.
At Monday’s council meeting, Mai Abdou, an asset management consultant with Public Sector Digest, presented Stratford council with an updated asset management plan using available 2019 condition assessment data, as well as a roadmap to both keeping the plan up to date and paying for the rehabilitation and replacement costs as the city’s infrastructure and buildings approach the ends of their expected lifespans.
“As of 2019, Stratford has a combined infrastructure portfolio of about $944 million, and really the cost of your infrastructure is the biggest investment … that you make within your community,” Abdou said. “As you can see, for roads, for stormwater, for facilities, they make up the majority of your … portfolio. … If we look at the condition of your infrastructure in the field, … you’ll see (it’s ranked on) a scale from very poor to very good. … Sixty-three per cent of your entire infrastructure is in fair or better condition, which is great.”
While having 63 per cent of city infrastructure in fair or better condition sounds good on its face, Abdou noted that assessed condition data was available for only about 37 per cent of all infrastructure. For the rest, she said the age of infrastructure, buildings and other assets was used to approximate their condition – a data gap that exists in many communities.
“Sometimes age is not always the best determinant. This is why it’s important to look at the criticality of these assets and how important it is to have realistic or reliable condition information,” said Abdou.
Breaking the condition of city infrastructure down further, Abdou’s report showed that just more than half of Stratford’s roads are in poor or very poor condition, 24 per cent of city roads are in fair condition and the final 24 per cent of roads have been assessed as being in good or very good condition.
Meanwhile, roughly 67 per cent of the city’s stormwater system, 82 per cent of bits ridges and culverts and 48 per cent of city vehicles have been assessed as being in good or very good condition. On the other hand, 74 per cent of city machinery and equipment – including office equipment – and 54 per cent of public-land improvements were ranked poor or very poor.
Approximately 36 per cent of city assets will need to be replaced within the next 10 years, according to the updated plan.
Based on a lifecycle analysis of all city infrastructure, consultants said Stratford must budget an average of $21.5 million in capital rehabilitation and replacement funding annually to keep city infrastructure and other assets in working condition through their estimated lifespans. Based on a historical analysis of sustainable funding sources, Abdou said the city has been committing roughly $12.3 million to capital projects each year, leaving an annual funding deficit of about $9.3 million.
In her report, Abdou said the city would need to raise taxes by 11.2 per cent over the next decade and increase water and sanitary sewer rates by 27.2 per cent and 14.9 per cent over the next 15 years to eliminate that deficit.
“I know this is a hard question, but do you believe the province and Ottawa is going to help with this?” … Every municipality has this problem and our tax increases can’t go on forever. … If we have this deficit, who’s going to help us other than the taxpayer?” Coun. Tom Clifford asked the consultants.
In response, Public Sector Digest regional director Gabe Metron compared the situation to two kids on a teeter-totter.
“When you talk about … looking at increasing services or reducing rates, you really can’t do both,” Metron said. “So … you as a group have a lot of hard choices … to make in which direction you go with the community, and I think the one question that I have in terms of asset management … is how do we maintain stability. … For that discussion around what’s an appropriate amount of funding that’s going to come from other levels of government, we really take the approach of … this is your deficit, these are your assets, and notwithstanding those (unpredictable) one-time funding opportunities that will come about … (you need) to take care of (your) own house … and not rely on other levels of government.”
Following the consultants’ presentation, Stratford council approved the updated asset management plan and referred the asset management financial strategy to 2022 budget deliberations.