I notice the happy promise from the City that we will have a continued great water supply, provided we spend wa-a-a-y more than the rate of inflation to replace the water pipes. Several mainstream media stories acknowledged that we short-changed pipe repairs and replacement for decades in favour of more visible photo-op-friendly initiatives. Well, hello politics…
So now we have to
- pay to replace ageing pipes
- pay to “catch up” for the skipped work
and this will cost us big time. But, of course, it’s not a higher tax increase, no sir-ee it’s just user-pay, etc etc. Some people even have the gall to say it’s better than privatization, just look at the fast increases in cities that privatized … but maybe cities privatized because they were behind in infrastructure replacement and they outsourced it for a private firm to do the dirty work. And bonus, you can’t sue the City for a broken pipe, but you can sue a private firm for negligence or breach of promise.
There are a couple of wrinkles I haven’t seen addressed in the main stream media. One, is that a huge portion of the water bill is an “overhead” charge that we pay to the City. Sorta like profits, but guaranteed. Should the overhead cost go up in lockstep with the water charges?
The second is the future trend. It’s not just the 1900 pipes that are beyond their best-before date; there’s lots of suburban infrastructure that is ageing rapidly too. And those suburbs that boasted of being pay-as-you-go debt free, we now realize were just municipal Ponzi schemes collecting upfront development fees for grand visible projects like sportsplexes while stiffing other governments for the big expenditures (schools, major sewers and water pipes, major roads) or depending on developers to provide the local essentials, like streets and water pipes. And some of these municipalities neglected to keep any sort of plans or records of what pipes are where, their sizes, or conditions. Buried and outa’sight, outa’mind. We’ve been paying — and paying — since amalgamation to find and map those pipes and other infrastructure.
So I expect the cost for pipe replacement to soar over the next decades as the suburban pipes need replacement. And and there are a LOT of pipe miles in those endless crescents of six-houses-per-acre 1950’s, 60’s, and 70’s neighborhoods. I suspect that those low density developments cannot possibly generate enough tax revenue to replace their pipes and roads. Bernie Madoff would be proud, and should have been (dis)Honorary Mayor of some of our suburban municipalities. This of course means every one else’s water bill will be jacked up.
Now condo boards used to follow the fine example of our municipal parents. They enjoyed their new buildings, wore down the parking lots, elevators, water and heating systems, roofs, and exterior walls, while keeping condo fees low. Seeing the coming of increased fees as replacement times loomed on the horizon, they fled or died of old age, leaving new owners to face the bills. Some of these special levies are huge and a real hardship to residents. The Province stepped in some years ago to mandate proper reserves to replace wearing out infrastructure, so gradually things will get back to an even keel. But for all those who tut tut about high condo fees, well those people are pre-funding their future major repairs while most homeowners, like the City, are not.
I think its time to mandate the same replacement plan for municipalities. And instead of levying the charge city-wide, I’d like to see it levied on a neighborhood basis, so that low-density neighborhoods (ie, high pipe mileage per house) had to put in real replacement monies, and higher density neighborhoods pay their appropriate fee for their pipes. And yup, there should be some really major pipes that we can attribute to everyone as they serve whole chunks of the city. There will always be some elements of cross-subsidization, maybe call it sharing the risk à la insurance, but the pass-the-buck era of stiffing the next generation with the bill has got to stop. As does “equalizing” the bills when it is apparent that low density infrastructure is unsustainable.
Another great post!
My aunt was a ‘city’ councilor in Nepean before amalgamation who always liked to remind urban me that unlike the dirty city, the suburbs had pre-paid for all their development and municipal services. Her economics always seemed fishy.
I love your idea of having neighborhoods pay for the upkeep of their services. Sadly the numbers on council are already too skewed in favour of the suburbs.
Exactly. Not only should the city be required to responsibly fund it’s projects over the long term, but there needs to be a push towards low-density housing paying it’s (higer) share.
A good move in that direction would be to reform the entire property tax regime from one based on property value to one based instead on property size.
As it stands today, there is no straightforward way to charge large-lot owners more for distance-related services than small-lot owners, and to create such a system solely for waterworks would lead to bureaucratic duplication in that there would then be two property assessment regimes in place: a property value regime and a property size regime.
There are a bunch of other reasons to switch over to area-based property taxation, including the fact that the assessment regime itself would be relatively simple to administer once set up since property sizes don’t change too often, unlike property values. That fact also means that property taxes become more predictable and that locations with relatively rapidly increasing property values (i.e. high density inner areas) aren’t hit for increases in property tax compared to areas with declining, stagnant or slowly increasing property values.
David: i concurr that the current tax system has bizarre consequences, such as penalizing higher density “smart growth” and rewarding prolificate users of services. I’d suggest we keep the dollar value system, and modify it by adding in a density or lot size element, and a rural non-farm surcharge as those exurbanites consume so many miles of road, school bus, and ambulance services. Right now, the system penalizes people who add granny suites, or rental apts, which we should be encouraging. Don’t we want property improved?? Indeed, maybe we should just have one “general urban” tax rate and then let anyone develop any lot to any potential as no extra assessment. This would tax a high rise like a bungalow…or a better commercial property like a slummy one, thus encouraging redevelopment. But all this is really a discussion for another day…
Why not just introduce a scaling factor to the dollar value system to represent the cost of providing services from the core of the system. This would be based on distance to the main physical plant(s) providing services (e.g. water, sewage, etc.) and then modified by the density of the neighbourhood.
So Rockliffe and Bayshore might have the same scaling factors for opposite reasons. Stittsville would be scaled higher and Centretown scaled lower.
This might have the accidental effect of having homeowners be strongly in favour of infill developments that increase the density of their neighbourhoods. It would lower their taxes.
I second your comment about the dubious quality of suburban infrastructure. It’s not simply that the former municipalities did a poor job keeping track of it, but it seems that in many cases because it was developers putting in the pipes, they went with the cheapest stuff going.
My mother-in-law in Oshawa had the City there digging up the front yard of her circa 1980s tract house a few years ago to replace the water pipes. Her complaint was with the fact that they hadn’t properly replaced her ornamental lamp at the end of her driveway; mine would have been with the fact that, “What? You have to replace pipes that are less than 30 years old?! When are you going to sue the developer for using shoddy materials?”
Toronto is having the same problem. We amalgamated wiht North York and Scarborough just in time to help pay for replacing the shoddy infrastucture that they installed in the 50’s and 60’s.