Toronto budget has some capital issues
Drop in revenue means hard choices coming on infrastructure repairs
The orangutans at Toronto Zoo will get their new outdoor enclosure. Barbara Frum district library will not get new elevators. And those potholes on your street? You may have to get used to them.
Those are the types of decisions being made by city officials as they struggle with a planned reduction in transfers to capital spending in 2019, which could leave them with less money to invest in new projects and less to spend on much needed maintenance and repairs.
Toronto’s draft 2019 budget, introduced Jan. 28, is being debated at city hall and is scheduled to be finalized March 7. The decisions being made over the next few weeks could have far-reaching consequences for residents.
The city owns a vast array of physical assets, valued at just under $95 billion. That includes roads, bridges, culverts, buildings, parks and thousands of vehicles, including subways, streetcars and ferries, which must be maintained and kept in a state of good repair.
Each year cash from the city’s operating budget — which covers day-to-day spending — is transferred into the capital budget, which covers infrastructure, and the 10-year plan for spending the capital budget is updated.
With a growing population, the city had been increasing the amount of cash it transfers to the capital budget every year. But a drop in revenue in 2018 from the Municipal Land Transfer Tax — paid when properties exchange hands in Toronto — has led to a reduction in the amount of money currently earmarked for transfer to the 2019 capital budget.
The current draft budget decreases the transfer by $46.4 million to $340 million in 2019.
The budget estimates that the city’s total backlog for repairs and maintenance will grow from $7.8 billion in 2019 to $9.5 billion in 2028 — but that assumes capital transfer levels return to normal next year and increase every year after that, hitting a high of $754 million in 2026.
Councillor Gord Perks, who supports a property tax increase above the inflationary 2.55 per cent increase currently being proposed for 2019, is concerned that the city’s backlog of repairs is about to get worse — much worse.
“Essentially, to keep property taxes low, we’re sacrificing the money that we’re spending on maintaining roads, libraries, parks and all of that other stuff. When you add all that up, we start to be a city where more and more of the things you rely on are rusted out, leaky, cracked, broken and having to close from time to time while we do patchwork repairs,” Perks said. Where to spend and where not to spend is a continuous and delicate balancing act, and sometimes the compromises result in unintended consequences.
On Jan. 31, at around 2:30 p.m. at the Toronto Zoo, four panes of glass in the African Rainforest Pavilion, overburdened by a heavy snowfall, crashed to the ground, including over part of a public corridor.
Fortunately, many of the guests had left for the day. The pavilion was closed immediately and the area barricaded for staff safety. A contractor replaced the glass with safety glass and the pavilion was reopened the morning of Feb. 2.
Robin Hale, the zoo’s chief operating officer, said the glass was single pane and needed to be upgraded to a stronger, energy efficient, glazed roofing system.
“The broken glass is due to the need to upgrade and replace all of the single pane pavilion glass that forms much of the roofs of the Africa Rainforest and IndoMalaya Pavilions with a stronger, energy efficient glazed roofing system,” said Hale, the zoo’s chief operating officer.
“This is on our (state-of-goodrepair) backlog list and is an ongoing maintenance issue. The work will be scheduled as part of a larger pavilion renovation.”
No person or animal was injured in the accident. But it illustrates the danger of putting off repairs.
“It’s manageable. But I wouldn’t want to see it get any worse,” Hale said.
“Infrastructure maintenance investment isn’t something we in the public tend to notice until it goes wrong,” said Shoshanna Saxe, an engineer and assistant professor of sustainable urban infrastructure at the University of Toronto’s department of civil and mineral engineering.
She added that increasing extreme weather is adding further stress to the infrastructure system.
“Infrastructure that was well designed for the 20th century may not be prepared for the climate of the 21st,” Saxe said.
“Moving forward, I think we need to acknowledge that infrastructure is the foundation of our civil society. It requires upkeep and investment and that costs money. If we don’t invest now, it will be even more expensive in the future to catch up.”
One of the ways the city tracks backlog levels is by comparing the cost of the backlog (estimated repairs and replacements, upgrades and renovations) to the value of the assets being managed.
The figure varies widely between, and even within, agencies and departments.
The zoo’s repair backlog list runs at about 26 per cent of its total valued assets, according to Hale. At Toronto Community Housing, the backlog was at16.4 per cent at the end of 2018, according to spokesperson Bruce Malloch.
Despite significant new investment, it’s expected to keep climbing to just over 18 per cent by 2020, as buildings age faster than they can be repaired.
The agency’s goal is to bring it down to 10 per cent by 2026, which is industry standard, but the long-term funding for that strategy is not in place.
“We’re not underfunded this year, but for our 10-year-plan yes, it’s not a fully funded plan at this stage,” Malloch said.
At Parks, Forestry and Recreation, the repairs and maintenance backlog is expected to grow from 15.1 per cent in 2018 to 20.3 per cent in 2028, although spokesperson Shane Gerard said most of the projects are not obvious to residents and visitors.
Some areas will suffer more than others. According to budget documents, the backlog of work on trails, pathways and bridges will hit 98 per cent of asset value by 2028.
It can take years and sometimes decades for planned improvements in city facilities — the orangutan outdoor enclosure was originally envisioned as part of a 25-year capital master plan put forth in 1990. It wasn’t added to the zoo’s 10year capital works program until 2010 and was scheduled to be completed by 2017.
Now slated for completion in 2020, the new enclosure, outside the Indo-Malaya Pavilion, adjacent to the indoor holding area, will provide the zoo’s six orangutans with more space and activities, allow for some growth in the number of animals and create a better attraction for visitors.
Numerous other projects are being delayed.
Councillor Perks says he is particularly concerned with the backlog of repairs needed to trails, pathways and bridges maintained by Parks, Forestry and Recreation; a $33-billion backlog at the TTC; and with the growing backlog of repairs needed to keep city streets in good condition.
“Some stuff is getting done. I want to be clear — we are doing some repairs. We’re just not doing all the needed repairs. We’re doing a smaller and smaller percentage of the needed repairs every year,” he said.
“It means more potholes, more sinkholes, more cracks.”