The city recently unveiled a capital asset management study indicating an infrastructure deficit of up to $175 million dollars.
While there is significant sticker shock that comes along with this number, it isn’t something we have to fund in the short term. Infrastructure deficit is not debt; it’s the value of the infrastructure that has passed its expected useful life, but is still providing service to the community. I would also like to note that we are heading into our infrastructure planning process using the upper end of the cost estimate as it is much easier to adjust figures down than it is to increase funding down the road.
We sometimes forget how much the city is responsible for our daily routine/lives. We wake up in the morning and turn on lights with power supplied by the city; we use the bathroom connected to city sewer pipes and waste water treatment plant; we make coffee with potable water supplied by the city; we drive to work on city roads and walk on city sidewalks; we eat our lunch in city parks; take our children or grandchildren to the city pool for swimming lessons while their sibling attends hockey practise in the same city building you can see a concert or take in a Vee’s game in. This cycle repeats daily and we think nothing of it — until the power goes out, or a pipe bursts.
People sometimes compare Penticton and our tax rates to other communities without taking into account our population size or the amenities we have compared to these other communities. Our unique location between two lakes means we have kilometres of beaches, numerous parks, marinas and a historic ship to maintain. We also have four ice arenas, a soccer bubble and numerous heavily utilized recreation facilities. Most communities our size do not have a convention centre or events centre, nor do they receive the significant economic impact and social value to the community of such facilities. The South Okanagan Events Centre economic impact is over $34 million per year.
Further investigation may find that pipes rated to last 50 years are good for another 20 years, allowing us to push the replacement cost out 20 years and lower the deficit. We also have to consider what our risk tolerance for certain types of infrastructure might be — a pipe bursting in residential area might have a lower impact than one downtown or in high densified areas. A good analogy is your car. While warranties and dealerships might suggest replacing a vehicle every five to 10 years; many people use their car for more than 10 years. Despite an odd sound from the engine or some other quirk, it works for our needs and our risk tolerance allows us to continue driving it until it is no longer possible.
Over the next few months we are gathering public input and using your feedback to build a long-term plan to manage our infrastructure. Growing the economy and population of the city are by far the most effective and least painful ways to solve this issue. Taxation always seems to be the easiest avenue for governments to use, but any course of action we consider needs to be sustainable and affordable for everyone. Other funding options could include the sale of some non-core assets, adjusting service levels, shared services or using debt financing. The likely solution would be a combination of several of these factors.
I encourage everyone to visit www.shapeyourcitypenticton.ca for more information on our infrastructure deficit, our community engagement process, and to provide your comments online to help us identify your priorities and shape our plan.