December 4, 2008 - National Capital Heavy Construction Association

Committee of the Whole

2009 Draft Operating and Capital Budgets

Tax Supported Programs

December 4, 2008

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National Capital Heavy Construction Association

• 200 companies in the road building, aggregate, sewer and water main production industries.

• Employ 9,000 employees ($350 M in payroll).

• $165 million annual capital investment.

• Pay out in excess of $170 million annually in federal, provincial and property taxes.

• We make sizeable charitable donations & contributions, to fund sports, arts and culture activities in the area.

We are a major economic player

in the Ottawa Area

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Taxpayers Investment in Infrastructure

• Over $26 Billion• $75,000 per

household.• Over $10 Billion in

Transportation Infrastructure

• Over $12 Billion in Environmental Infrastructure

• However, Councils have been putting off the fixing & renewing of Infrastructure

• $1.1 billion funding gap.

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2007 - 2009 Capital Budget (excluding Transit)

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2007 to 2009 Capital BudgetCategory Total City Roadways & Integrated

Roads

2007 2008 2009 2008 2009

Renewal of City assets $306,426,000 $141,337,000 $137,859,000 $84,644,000 $76,379,000

Growth-related capital work $282,916,000 $122,315,000 $109,921,000 $65,187,000 $74,985,000

Strategic Initiatives $33,549,000 $55,959,000 $66,582,000 $1,762,000 $5,435,000

Regulatory $11,549,000 - - - -

Total 633,915,000 $319,661,000 $314,362,000 $151,593,000 $156,799,000

Category 2007 2008 2009

Transportation Services (roadways) $98,555,000 $133,616,000 $113,764,000

Integrated Roads (excl. Water & Sewer)

$106,145,000 $17,977,000 $43,035,000

Total $204,700,000 $151,593,000 $156,799,000

Note: Transit has not yet been determined for 2009, and is excluded from the 2008 figure for comparison purposes. Transit investment totaled $208,709,000 in 2007

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Road Renewal & Resurfacing

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Cost of payment neglect

Renewal Treatment

Treatment Cost per lane-km $,000

Gain in Pavement Life

(Range for arterial and local roads)

Reconstruction $530 - $650 ($590) 18 – 25 years

Resurfacing- Mill and overlay $100 - $140 ($120) 13 – 23 years

Preservation-Microsurfacing-Thin overlays

$25 – 40 ($32.5)$40 - $45 ($42.5)

5 – 12 years5 – 12 years

Source: September 22, 2008 Transportation Committee Report

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The Consequences of not making the needed infrastructure investment

• Increased costs to make repairs.

• Environmental impacts.• Public health and safety

issues.• Increased liabilities.• Reduced credit ratings.• Taxpayer dissatisfaction.• Less money in the future

to spending on programs.

8December 4, 2008 - National Capital Heavy Construction Association

Taxpayers support for Infrastructure Renewal

• A survey of 400 Ottawa households revealed that residents support the 2% Infrastructure Renewal Tax Levy.

• The top priority for infrastructure renewal expenditure was on roads, followed by water mains, bridges and sewers.

• NCHCA findings confirmed by Harris/Decima survey

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Water and Wastewater Rate Support Capital

• The City is on the right track with respect to the rate supported infrastructure.

• The 9% increase approved last month makes sense to catch up on maintaining and improving the water and sewer system.

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Proper Investment in Infrastructure makes: Dollars & Sense

• Saves taxpayers money in the long run

• Consistent with the 2007 Fiscal Framework

• Consistent with the 2007-2010 City Strategic Plan

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Fed. & Prov. Infrastructure InvestmentThe U.S., as well as the federal and provincial governments recognize the importance of investing in infrastructure during a period of economic downturn.

A $20 million infrastructure investment by the City (matched by the provincial and federal governments) would translate into creating 700 jobs.

Please make sure that the City of Ottawa is positioned to take advantage of these funding opportunities.

12December 4, 2008 - National Capital Heavy Construction Association

Recommendations:1. Support the 2% Capital Tax increase.

2. Increase investment in infrastructure in order to maximize contributions from the federal and provincial governments and create jobs.

3. Review list of Capital projects to remove questionable operational projects from the list.

4. Review unspent Capital projects and reallocate this money to much needed infrastructure renewal projects.

5. Increase expenditure on road infrastructure renewal.

6. Reinstate the gravel road dust control and roadside ditching reductions of $1 million.

7. Reallocate money from the $77.3 million provided by the province to roads.

8. Establish appropriate construction standards to reflect rural vs. suburban vs. urban requirements.

9. No new services that are not funded by a reduction elsewhere.

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In Conclusion: • My Ottawa includes ….• This is a huge amalgamated City that needs

roads.• Don’t fall into the “us” versus “them” mentality.• We are not in this financial mess because we

built roads. We are here because of tax freezes.• Don’t forget to replace the damaged shingles.• Run the City the same way we run our

businesses – a long term view.

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