by Vance Gutzman
Laurentian Hills will have to raise both property taxes and utility rates in the coming years to fund capital deficits.
That was the message town council heard last week from a consulting firm which prepared an asset management plan (AMP) for the municipality.
Erin Orr, asset management specialist with PSD Citywide, referred to her presentation as “a snapshot of a really detailed document.”
Orr said asset management plans, which are mandated by the province, enable municipalities to meet a required level of service in the most cost-effective manner.
“It’s all about the service you’re providing through your infrastructure,” she said.
Laurentian Hills’ AMP incorporates the town’s water and wastewater systems, its road network, buildings and facilities, machinery and equipment, and vehicles.
The overall replacement cost of those assets, Orr told council, is $51.2 million and, to meet their replacement and rehabilitation needs, the town’s average annual capital requirements total $2.1 million.
Laurentian Hills, Orr said, is currently committing about $492,000 towards capital projects or reserves in that regard, leaving an annual funding gap of $1.6 million.
The asset management plan also rated the current condition of the town’s capital assets and found 29 percent of them are in “fair or better” condition, while 46 percent are projected to require replacement in the next 10 years.
The big-ticket items in that regard are parts of the town’s water and wastewater networks, whose total replacement costs are $19.7 million and $13.6 million respectively.
The asset management plan rates 77 percent of the water network as being in “very poor” condition, while 60 percent of the wastewater network is rated as being in “poor” condition.
“You have an aging infrastructure,” Orr told council.
“Like most other municipalities in Ontario, a lot of your assets are older and are in need of repair or replacement in the near future.”
To keep up with the replacement costs of all its assets, the asset management plan contains a financial strategy to address their annual funding gap.
The strategy recommends raising average annual water and wastewater rates by 7.2 percent and 4.3 percent respectively over the next 20 years, coupled with property tax rate increases of 1.1 percent a year over the next 10 years for the town’s tax-funded assets.
The consulting firm is also recommending the town review and update its lifecycle management strategies in order for the asset management plan to keep pace with changing infrastructure needs.
“Your plan is a living document,” Orr told council.
“It needs constant revisions and updates.”
(Story first published in the NRT September 28, 2022.)
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