Hamilton councillors are taking a wait-and-see view of capital projects
Hamilton’s skyrocketing debt has prompted councillors to curtail its 2010 capital budget, despite the city’s deteriorating infrastructure problems that amount to over $60 million every year.
Councillors approved a 0.5 per cent increase, or $2.9 million, in capital spending for 2010, and reserved the right to bump it up to one per cent, or $5.8 million before the budget is approved early next year. The 2009 capital budget was set at $77.5 million. With a one per cent approval, the budget will jump to $83.3 million. The increase to the capital budget will remain until council decides to remove it.
The difference is that for a full one per cent, there will be an additional $4 million for road construction, instead of $40 million that would be allotted under a 0.5 per cent budget. For that extra $4 million, an additional $6 million will be added to this year debt, making it $34.2 million.
The city’s overall consolidated debt is expected to balloon from $590 million in 2010 to $810 million in 2011. The city’s debt is expected to reach a high of $1.26 billion in 2017 before dropping slightly in 2018 and 2019.
“We are caught between a rock and a hard place,” said Robert Rossini, the city’s corporate services general manager.
Despite its high debt and the potential for the city’s credit level to affect how it finances projects, Hamilton still desperately needs to spend on infrastructure projects, Rossini said. Hamilton’s infrastructure deficit for major projects is projected to be about $62 million each year for the next 10 years.
Just under half of Hamilton’s capital budget will be directed to road construction. Money will also be used for park acquisition and development, economic development proposals and waterfront development.
A few of the projects proposed for next year include $21 million for the West Mountain Recreation Centre, $15.4 million for city hall renovations, $13 million for the Stoney Creek recreation centre, $11.7 million for the Trinity Church Arterial Corridor to open up the North Glanbrook Industrial Park, $10.3 million to twin the Morgan Firestone Arena and improvements to Woodward and York roads, and Randle Reef rehabilitation.
Mayor Fred Eisenberger urged councillors to accept the extra 1 per cent funding for infrastructure. He said both the federal and provincial governments are looking at how the city pays its share of infrastructure projects.
“Some time we will have to get our heads around that the federal and provincial governments will not fund our infrastructure,” he said. “We need to keep pace. This signals to other governments we are doing our bit.”
He said there have been complaints made by provincial officials that Hamilton has used provincial and federal monies to cut its taxes rather than direct the money to needed capital projects.
Stoney Creek councillor Maria Pearson, who supported the one per cent, said her greatest fear is the potential for safety problems for residents who are injured due to the city’s crumbling sidewalks and roads.
Ward 1 Councillor Brian McHattie suggested councillors wait early next year when councillors have more information about the city’s financial situation.
Councillors are scheduled to approve the 2010 budget at the end of February.
“I’d like more time to understand our situation,” he said.
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