Petrolia may be getting a ‘D’ on its infrastructure replacement report card, but it is ahead of the class according to one consultant.
Holly Jennings of Public Sector Digest recently told town councillors Petrolia is not spending nearly enough money to maintain its assets. But she says in an environment where all governments are scrambling for cash to build, Petrolia is doing okay.
The country’s roads, bridges, water and sewer systems and public buildings are aging and governments on all levels haven’t spent enough money to keep them well maintained. The Canadian Federation of Municipalities says to replace all the infrastructure in Canada which is considered fair to poor would take $388 billion. Sixty per cent of that cost would be borne by municipalities like Petrolia.
Jennings painted a stark picture of infrastructure investment. Between 1975 and 1979, the town spent $62 million mostly upgrading sanitary and storm sewers. From 2010 to 2015, it spent just $15 million.
Jennings says recent investments in Petrolia Line and the new sewage treatment plant are a good sign. But it is just the beginning of what needs to be done.
The town now spends about 55 per cent of what it should to maintain its road network and only spends about 14 per cent of what it should to maintain buildings in the municipality.
The report finds the town should be spending about $2.453 million a year just to maintain its assets but spends only $1.358 million.
It has done better with the water and sewer system, falling short by just $200,000 in 2016. However the province demands water and sewer rates pay for the operation and upkeep of the system.
If the town were to try to make up the difference, Jennings says, it would take a 30 per cent tax increase. But no one is suggesting making up the difference in one year.
Instead Jennings is suggesting for the next 15 years, Petrolia raise taxes by 1.2 per cent just to maintain its infrastructure and buildings – a plan Jennings says will have “the least resistance.”
The report also recommends the infrastructure budgets continue to get a rate of inflation increase each year.
And that’s not including any increases for items such as hydro, salaries or additional programs and services the town might want to offer.
The water rates already cover the cost of maintaining the water system but Jennings says sewage rates should be increased 1.4 per cent for the next 10 years to make sure the asset is maintained.
While the situation seems stark, Jennings says Petrolia is actually ahead of many municipalities after adding five per cent into its taxes in 2015 to pay for infrastructure.
“You are not alone; this is what we are finding in many communities across Canada and Ontario; they have the same problems,” says Jennings.
“You’re average… it is good to be where you are; everyone is underfunded severely.”
Even with the reassurances all municipalities are in the same boat, some councillors voiced concern about the infrastructure deficit.
“We have to look at the federal and provincial keep borrowing more money all the time, municipalities keep borrowing money all the time; where does it end?” asked Councillor Ross O’Hara.
“I’d love to get more (federal and provincial) money, and if we get double the amount of money it would be great. We’ve been very fortunate in Petrolia but where it comes from I don’t know.”
Treasurer Rick Charlebois says the federal government is getting ready to roll out its next round of infrastructure projects and the town will work to secure some of that money.
He’s also planning a detailed report for council June 5 to explain some of the challenges ahead and some possible solutions.