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Presentation to Ratepayer Presentation to Ratepayer

and BIA Board of Directorsand BIA Board of Directors

February 27, 2008February 27, 2008

Noel Ryan AuditoriumNoel Ryan Auditorium

AgendaAgenda

• Mayor Hazel McCallion, Introductory remarks

• Professor Saeed Mirza, PhD., ING, McGill University, Canadian Perspective

• Janice Baker, City Manager, Mississauga Facts

• Wendy Alexander, Director of Transportation and Infrastructure Planning, Mississauga Case Study (Roads)

• Questions and Answers

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Cities NOW! Cities NOW!

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Professor Saeed Mirza, PhD., ING, McGill University, Canadian Perspective

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Cities NOW! Cities NOW!

CampaignCampaign

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Where does the tax dollar go?Where does the tax dollar go?

Source: The Fraser Institute Canadian Tax Simulator, 2003

Provincial 32% Municipal 8%

Federal 60%

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Proportion of Canadian Population Proportion of Canadian Population

Living in Urban AreasLiving in Urban Areas

1956 2006

Source: Statistics Canada, censuses of population 1956 to 2006

Urban 67%

Non-Urban 33%

Urban 80%

Non-Urban 20%

Change in Municipal Infrastructure Change in Municipal Infrastructure

OwnershipOwnership

Source: Municipal Finance Officers Association, October 2007

1961

Federal 33%

Provincial 37%

Municipal 30%

2005Municipal 58%

Federal 12%

Provincial 30%

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MississaugaMississauga’’s Infrastructures Infrastructure

13%

7%7% 4%

68%

1%

Road Network

Buildings

Storm Ponds and Non Road Storm

SewersParks & Outdoor

Vehicles and Equipment

Info Tech

Total City Assets $7.7 billion (estimated 2008)

TransitioningFor TheFuture

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Our ReputationOur Reputation

Aging Infrastructure:Aging Infrastructure:Tax Funded Capital NeedsTax Funded Capital Needs

(Adjusted for Inflation)(Adjusted for Inflation)

0

50

100

150

200

250

300

350

400

20082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030203120322033

Road Network Vehicles Buildings Parks Equipment

Millions

2008 Annual Contribution = $13.5 million

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Our Future ?Our Future ?

Mississauga Case Study: Mississauga Case Study:

RoadsRoads

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Our Road NetworkOur Road Network

…is worth close to $4 billion

…contains approximately 2,600 km of pavement

…is in pretty good shape now

…is deteriorating

Pavement DeteriorationPavement Deterioration

Overall Condition Index

(OCI)

EXCELLENT

POOR

Time

30% drop in condition

70% of life

30% drop in condition

10% of life

One unit of cost for rehabilitation

Four to five units of cost for rehabilitation70-75 �

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Maj/Ind/Col Roads - Funding Comparisons

50

55

60

65

70

75

80

85

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

OCI (Overall Condition Index)

$8.5 mil

$ 15 mil

$ 17 mil

Network AnalysisNetwork Analysis

Network AnalysisNetwork Analysis

Local Roads - Funding Comparisons

50

55

60

65

70

75

80

85

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

OCI (Overall Condition Index)

$ 4 mil

$ 8 mil

$ 12 mil

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Very Good ~Very Good ~Very Good ~Very Good ~Very Good ~Very Good ~Very Good ~Very Good ~OCI 80OCI 80--100100

• Pavement is in excellent condition with very smooth ride

• Slight surface deformation distresses

• No visible surface defects or cracking distresses

62% of network

Good ~Good ~Good ~Good ~Good ~Good ~Good ~Good ~OCI 70OCI 70--8080

• Pavement is in good condition with smooth ride

• Slight to moderate surface deformation distresses

• Slight to moderateintermittent surface defects and/or cracking distresses

26% of network

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Fair ~Fair ~Fair ~Fair ~Fair ~Fair ~Fair ~Fair ~OCI 60OCI 60--7070

• Pavement is in fair condition

with acceptable ride

• Intermittent to frequent

surface defects and/or

cracking distresses

• Localized alligator cracking

may be present

• Pavement is in fair condition

with acceptable ride

• Intermittent to frequent

surface defects and/or

cracking distresses

• Localized alligator cracking

may be present

9% of network

Poor ~Poor ~Poor ~Poor ~Poor ~Poor ~Poor ~Poor ~OCI 50OCI 50--6060

• Pavement is in poor condition with barely acceptable ride from frequent bumps or depressions because of moderate deformation distresses

• Moderate to severe frequent surface defects and/or cracking distresses

• Localized slight to moderatealligator cracking may be present

• Pavement is in poor condition with barely acceptable ride from frequent bumps or depressions because of moderate deformation distresses

• Moderate to severe frequent surface defects and/or cracking distresses

• Localized slight to moderatealligator cracking may be present

2% of network

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Very Poor ~Very Poor ~Very Poor ~Very Poor ~Very Poor ~Very Poor ~Very Poor ~Very Poor ~OCI less than 50OCI less than 50

• Pavement is in very poor condition with uncomfortable ride• Frequent to extensive bumps with frequent to extensive surface defects and/or cracking distresses• Frequent slight to moderatealligator cracking may be present

• Pavement is in very poor condition with uncomfortable ride• Frequent to extensive bumps with frequent to extensive surface defects and/or cracking distresses• Frequent slight to moderatealligator cracking may be present

1% of network

MississaugaMississauga’’s s

Infrastructure DeficitInfrastructure Deficit

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Municipal Budget PressuresMunicipal Budget Pressures

• downloading (federally and provincially)• elimination of unconditional grants for transit, roads and bridges

• unpredictable conditional grant programs• legislative changes to various acts (e.g. 10% discount for soft services in the Development Charges Act, 1997)

• reliance in Ontario to fund education, health and social services from the property tax base

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Municipal Budget Pressures Municipal Budget Pressures

• aging infrastructure

• slower revenue growth

• rising costs like utilities, new technology, labour

• inflation

• rising construction costs

• resident expectations

Infrastructure Deficit In Infrastructure Deficit In

MississaugaMississauga

• Mississauga’s infrastructure deficit is estimated at $1.5 billion over next 20 years

• Need an additional $75 million more per year to eliminate the infrastructure deficit

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City of MississaugaCity of Mississauga

$1.5 Billion Infrastructure Deficit$1.5 Billion Infrastructure Deficit20082008--20272027

$(millions)

$265.7 Buildings

$343.8 Vehicles

$78.1 Parks$93.8 Equipment

$781.4 Road Network

Tax Capital Reserve Fund Tax Capital Reserve Fund

Balances 2001 to 2017Balances 2001 to 2017

0

50

100

150

200

250

300

350

400

450

500

$ Millions

2001 2003 2005 2007 2009 2011 2013 2015 2017

* Does not include year end surplus and interest allocations

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3131313131

$0

$50

$100

$150

$200

$250

$300

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

2007 Budget 2008 Budget

Millions

External Debt BalancesExternal Debt Balances

2008 to 20172008 to 2017

Inflated @3%

2007 Federal Economic Statement2007 Federal Economic Statement

• FCM: Cities are economic engine of country -across Canada municipalities face an Infrastructure Deficit:�$123 billion & growing

• Missed opportunity:– $65 billion in Underlying Budget Surpluses between 2006-2013

• Cuts taxes and pays down financial debt • No new funding for capital investments• Ignores infrastructure deficit

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Federal Tax SavingsFederal Tax Savings

Residential -Mississauga1 602$

Small Business2 1,000$

Corporate Business3 10,000$

2-Net income $100,0003-Net income $1 million

Federal Economic Statement Savings 2008

1-Mississauga average annual household income $90,600

Cities NOW! Cities NOW!

CampaignCampaign

www.citiesnow.cawww.citiesnow.ca

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Campaign GoalsCampaign Goals• To influence the Federal Government and other key

stakeholders towards long-term, sustainable funding of municipal infrastructure

• To inform our taxpayers about the Federal Government’s decision not to share a portion of their surpluses in municipal infrastructure

• To outline the proposed special infrastructure levy on property taxes which is an option to partially fund Mississauga’s public infrastructure in a state of good repair and maintain the quality of life of our citizens.

Special Infrastructure Levy:Special Infrastructure Levy:

Tax ImpactsTax Impacts

Special Infrastructure Levy: 1% 5%

Residential -Mississauga1 10$ 50$

Small Business2 19$ 97$

Corporate Business3 194$ 974$

Special Capital Infrastructure Levy

equates to: (millions) 2.55$ 12.75$

1-Mississauga average assessment of $365,000

2-Property assessment of $500,000

3-Property assessment of $5 million

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Net Residential Savings from Net Residential Savings from

Federal & City Tax ChangesFederal & City Tax Changes

$0

$100

$200

$300

$400

$500

$600

$700

City Infrastructure Levy @ 5%Net Fed Tax Savings

Mississauga Average Annual Household Income $90,600*, Average assessment $365,000

$602

$50

$552

*2007 estimate

$0

$200

$400

$600

$800

$1,000

City Infrastructure Levy @ 5%Net Fed Tax Savings

Small Business Net Income $100,000, property assessment value $500,000

$1,000

$97

$903

Net Small Business Savings from Net Small Business Savings from

Federal & City Tax ChangesFederal & City Tax Changes

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$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

City Infrastructure Levy @ 5%

Net Fed Tax Savings

Corporate Business Net Income $1,000,000, property assessment value $5,000,000

$10,000

$974

$9,026

Net Corporate Savings from Federal & Net Corporate Savings from Federal &

City Tax ChangesCity Tax Changes

Infrastructure Deficit Remaining Infrastructure Deficit Remaining

After 5% City Infrastructure LevyAfter 5% City Infrastructure Levy

(20 year 2008(20 year 2008--2027 average annual)2027 average annual)

$75 million Annual Infrastructure Deficit

Infrastructure Levy$12.75 million

RemainingInfrastructureDeficit$62.3 million

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Why the Federal Government?Why the Federal Government?• Federal investment in Canada’s infrastructure will lead to:– economic benefits (employment, economic activity, positive impact on businesses)

– return on investment to government (increase in income taxes, decrease in unemployment insurance)

• There is more of a benefit to the federal government to invest in infrastructure than for municipalities:– the economy becomes more competitive and productive– helps reverse “economic slowdown”– sensible time to make an investment now– keeps economic activity domestic– revenue options (municipalities limited to property tax and userfees)

Meadowvale Four RinksHuron Park Community Centre

Malton Community CentreMississauga Valley Community Centre

Super Build FundingSuper Build Funding

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Bus Rapid TransitBus Rapid TransitBus Rapid Transit

Mississauga BRT Segment

Gas Tax Gas Tax –– Federal ContributionFederal Contribution

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Foreign CountriesForeign Countries• France

– National Transport Tax: a special tax which finances the investment and operation of urban public transport in cities with a population of more than 30,000. The tax is paid to the local Urban Transport Authority by all employers with more than 9 employees and is fixed at 1.75% of wage.

• Spain– Since 2000, Spain has budgeted more than $120 billion for an extensive infrastructure and public works makeover plan, focused on increasing road, rail, port and airport capacity throughout the country. An additional $200 billion has been earmarked through 2020.

– The Spanish rank as world leaders in building privately managed toll roads.

• United States– The six year Transportation Equity Act (TEA-21) program, initiated in 1999, allocated a total of $217 billion for highways, transit, rail and special projects, such as ferry boats, historic covered bridges etc. More than half (over $100 billion) was available for urban roads, bridges, transit, and light rail.

Budget 2007 Funding Budget 2007 Funding –– $33B Plan $33B Plan The Building

Canada Plan:

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

2013-

14

Total

Base Funding 1,515 1,750 2,790 2,830 2,875 2,915 2,960 17,635

Gas Tax 800 1,000 2,000 2,000 2,000 2,000 2,000 11,800

GST Rebate 715 750 790 830 875 915 960 5,835

Equal per

jurisdiction

funding

325 325 325 325 325 325 325 2,275

Building Canada

Fund

572 926 1,186 1,410 1,427 1,636 1,655 8,801

Gateways and

Borders Fund

137 221 283 335 341 391 396 2,105

PPP Fund 82 132 169 200 204 234 236 1,257

Asia-Pacific

Gateway

108 158 118 144 172 170 108 977

Existing 81 115 63 79 105 94 31 567

New 27 43 55 65 67 76 77 410

Total Plan 2,738 3,512 4,871 5,235 5,343 5,671 5,680 33,050

Total infrastructure funding over period is $37B, including $4B of sunsetting expenditures from CSIF, BIF, MRIF, and Public Transit

Capital Trust –

this includes Budget 2006 funding

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Role of the ProvinceRole of the Province

• Provincial Municipal Fiscal and Service Delivery Review

• Move Ontario 20/20

• Provincial Budgets

SupportSupport• Mississauga Board of Trade• Ontario Real Estate Association

• Ontario Home Builders’Association

• Canadian Construction Association

• Ontario Road Builders’Association

• Ontario Municipal Water Association

• Road Builders and Heavy Construction Association of Saskatchewan

• Ontario Recreation Facilities Association

• Hon. Albina Guarnieri(Mississauga East – Cooksville, Lib.)

• Hon. Navdeep Bains, P.C., M.P. (Mississauga – Brampton South)

• Dufferin-Peel Catholic District School Board

• Canadian Union of Public Employees

• City of Waterloo • BCMC: Vancouver, Surrey, Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Brampton, Hamilton, Kitchener, London, Ottawa, Windsor, Toronto, Gatineau, Montreal, Laval, Quebec City, Longueuil, Halifax and St. John’s

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Ideas Through FeedbackIdeas Through Feedback

• smaller levy carried over 3 or 4 years

• 1% Provincial infrastructure levy

• levy less than 5%

• Provincial sales tax exemption (City of Waterloo proposal)

• do nothing to property taxes

• referendum

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Our ReputationOur Reputation

For more information please visit our website at www.citiesnow.ca

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Questions & AnswersQuestions & Answers

Please fill out your survey and give it

to a City Staff member when exiting the auditorium.

Thank you for your time and participation.

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For more information please visit our website at www.citiesnow.ca