Closing the Gap The County Infrastructure Deficit November 6, 2019 - PowerPoint PPT Presentation

Closing the Gap The County Infrastructure Deficit November 6, 2019

Challenges Faced by Municipalities • Aging critical infrastructure • Deteriorating infrastructure condition due to environmental conditions • Increased demand and expectations for service by rate payers • Tax levy supported funding falling behind the needs • Rising construction and operating costs • Low levels of growth within the County • Downloading costs from senior levels of government 2

Closing the Gap Council Approval – February 20, 2019 $93M gap over  2018 Asset Management Policy and Plan next 10 years  Identified significant challenges to sustaining its aging infrastructure assets. Currently This proposed tax  For several years, a dedicated levy increase is not infrastructure levy of 2.0% has been confirmed and does used. not close the gap. Closing the Gap  To close this gap several fiscal tools Strategic direction can be considered. is needed to plan  Reducing service, cost efficiencies, for the future. grant funding, tax levy increases.  Balance affordability and risk.

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Needs versus Funding 5

Available Fiscal Tools • Divesting • Revenue Base Increase • Spending Reduction • Debt Financing • Property Tax Levy Increase 6

Perspective - Cost Effect on the Average Taxpayer • For each 1% tax levy increase this is equivalent to a $9 per year increase to the average residential taxpayer in the County of Peterborough (75¢ per month). • Median assessed value of a single family residential property in the County of Peterborough for 2019 taxation purposes is $257,750. • Statistics provided by Online Property Tax Analysis (OPTA) based on data from Municipal Property Assessment Corporation (MPAC). 7

Perspective – Risk Management • Potential risks that may be associated with County buildings include: – danger to health and safety of occupants, – acceleration of component replacements (e.g. roofing), – catastrophic repairs & associated insurance premiums, – interruption or loss of operations, – deterioration of facilities to the point of loss of use and/or requirement for replacement. • Potential risks that may be associated with road and bridge infrastructure include: – ratepayer inconvenience, – reputational loss, – catastrophic failure of assets, – reduced public safety. – higher travel times between communities. 8

Options for Dedicated Infrastructure Levy 1) Do Nothing – Infrastructure Deficit Expands 2) Reduce Infrastructure Deficit to 50% by 2028 3) Eliminate Infrastructure Deficit by 2028 4) Expedited Infrastructure Deficit Elimination by 2024 9

Option 1 - Do Nothing Infrastructure Deficit Expands • Infrastructure deficit continues to grow beyond $93M by 2028. • Service levels and infrastructure condition deteriorates. • Risk increases – safety, asset, liability • No dedicated tax levy. • No direct financial effect on the taxpayer. 10

Option 2 - Reduce Infrastructure Deficit to 50% by 2028 • Infrastructure deficit decreases to $42M by 2028. • Service levels and infrastructure condition deteriorates. • Risk increases – safety, asset, liability • Annual tax levy increase. • Monthly cost increase to tax payer in 2020. 11

Option 3 - Eliminate Infrastructure Deficit by 2028 • 100% infrastructure deficit reduction by 2028. • Service levels and infrastructure condition levels out. • Risk decreases – safety, asset, liability • Annual tax levy increase. • Monthly cost increase to tax payer in 2020. 12

Eliminating the Infrastructure Deficit by 2028 13

Option 4 - Expedited Infrastructure Deficit Elimination by 2024 • 100% infrastructure deficit reduction by 2024. • Service levels and infrastructure condition improves. • Risk decreases – safety, asset, liability • Annual tax levy increase. • Monthly cost increase to tax payer in 2020. 14

Closing the Funding Gap Option Dedicated Funding Asset Risks Tax Levy Gap Condition Do Nothing – Infrastructure 0% $92.9M Declines Increase Deficit Expands Reduce Infrastructure 2.25% $46.2M Declines Increase Deficit to 50% by 2028 Eliminate Infrastructure 4.25% - $0.3M Stabilize Decrease Deficit by 2028 Expedited Infrastructure 5.56% - $0.1M Stabilize Decrease Deficit Elimination by 2024 15

Dedicated Levy and Effect on Rate Payer in 2020 Option Dedicated Tax Levy Effect on Tax Levy % in 2020 Average Ratepayer Do Nothing – Infrastructure Deficit 0% - - Expands Reduce Infrastructure Deficit to 50% 2.25% $967,817 $20.25/year by 2028 $1.69/month Eliminate Infrastructure Deficit by 4.25% $1,845,099 $38.25/year 2028 $3.19/month Expedited Infrastructure Deficit 5.56% $2,413,824 $50/year Elimination by 2024 $4.17/month 16

Recommendation to Close the Gap Council Direction – November, 6 2019  Strategy be adopted by Council to eliminate Close $93M gap the County’s existing $93M infrastructure over next 10 yrs funding gap by the end of 2028.  Address significant challenges with County infrastructure assets. Proposed Additional $38.25 in  Dedicated infrastructure levy of 4.25% 2020 or $3.19 per starting in 2020. month for average  Include additional $1,845,099 funding in County tax payer. 2020 budget deliberations. Closing the Gap Tax Levy increase  Dedicated infrastructure levy of 4.25% in 4.25% in each of each of the next 9 years. the next 9 years  Balances affordability with the needs of the community.  Zero Gap. 17

Recommendation • Whereas, at the January 25, 2017, Special Council meeting on Strategic Planning, County of Peterborough Council identified the need to implement a long term funding strategy for the purpose of addressing the significant infrastructure deficit of roads and bridges that will be experienced over the next 10-year period; and further • Whereas, at the February 21, 2019, Council meeting the County of Peterborough Asset Management Plan and Policy was adopted and approved by Council, which demonstrates the scope and magnitude of the County’s $93M infrastructure deficit, and further; • Now therefore be it resolved that a strategy be adopted by Council to eliminate the County’s existing infrastructure funding gap by the end of 2028, as outlined in the approved 2018 County Asset Management Plan; and further • That a dedicated levy increase of 4.25% be included in the 2020 budget for County’s infrastructure capital program; and further • That an annual dedicated levy increase of 4.25% be adopted each and every year to 2028, as part of County’s 10-year capital forecast, budget, and reserve fund planning horizon; and further • That a communication plan be developed for the dedicated infrastructure levy as part of the 2020 budget deliberations. 18