The infrastructure that supports the many services delivered to the residents and businesses of Toronto got a major boost as the proposed 2010 Capital Budget and 10-Year Capital Plan were introduced by Toronto’s Budget Committee. The proposals speed up job creation and the maintenance of City infrastructure by moving more capital spending into the first five years of the plan.  City Council considers the 2010 Capital Budget and 10-year plan at a special meeting on December 8, 2009.

The 2010 capital budget and 10-year capital plan introduced totals over $16 billion with $2.4 billion earmarked for 2010 and over $2.5 billion budgeted for each of 2011 and 2012. The City’s total capital budget plan, including Water and Waste Management is $25.7 billion over the next 10 years. Details of the Water and Waste budgets are below.

The proposed budget and plan includes funding for the ongoing maintenance and replacement of the City’s major infrastructure such as transit, roads and bridges, police stations and emergency communications systems, as well as ongoing environmental initiatives, improvements to the waterfront and Toronto’s many parks, trails, libraries and community centres.

Some of the major projects include:

• 360 subway cars, 390 buses, and 204 low-floor replacements for the existing street car fleet
• redevelopment of the St. Lawrence North Market
• waterfront redevelopment
• construction of 4 child care centres
• Regent Park revitalization
• Union Station revitalization

More than 50 per cent of the City’s 2010 capital budget and 10-year plan (over $8.7 billion) will go towards the infrastructure required for the operation, maintenance and expansion of the TTC. The proposed capital budget will pay the cost of major infrastructure for the TTC, including new streetcars.  In total, the 10-year capital plan sets aside over $11.7 billion for transportation in Toronto (including TTC) - more than 70 per cent of the total capital budget.

In total, the capital budget plan proposed dedicates

• 61 per cent to funding the maintenance of City assets,
• 24.5 per cent to projects required to meet the demands of growth,
• 9.8 per cent to enhance existing programs, and
• 4.7 per cent to meet the needs of health and safety or legislated requirements.

The City has both a capital and operating budget. The capital budget funds major infrastructure and the operating budget pays the day-to-day operating costs for City services such as police, fire, transit, and includes costs such as wages, fuel, and electricity. The operating budget will be considered beginning in February, 2010.

The Capital Budget presentation can be viewed at http://www.toronto.ca/budget2010

Federal and Provincial Infrastructure Stimulus funding
Recent stimulus partnerships with the federal and Provincial governments have enabled the City to accelerate its capital projects and create jobs during this difficult economic climate.

The City and the Federal governments recently announced Infrastructure Stimulus funding for more than 500 infrastructure projects that will begin construction as soon as possible.  These projects include repairs and upgrades to roads, water and sewage infrastructure, public transit, community centres, and cultural facilities.  More than half a billion dollars will be invested, with the Federal government contributing about $200 million and the City providing the remaining two-thirds.

In addition, the City and the Provincial governments recently announced $80 million in funding for more than 100 projects through the Recreational Infrastructure Canada (RInC) and the Ontario Recreation Program.  Approximately $40 million of the projects funding comes from the City with the remainder being funded by the Federal and Ontario governments.

To meet the requirements of stimulus funding from the Federal and Provincial governments, Council approved the acceleration of capital budget investments in 2010 and 2011, increasing the capital budgets for the next two years.

Details on the partnership funding for these programs can be at:  http://www.toronto.ca/legdocs/mmis/2009/cc/bgrd/cc40.10.pdf

A web based map with all of the projects can be viewed at: http://www.toronto.ca/stimulus_fund

Financing the Capital Plan
Unlike the Federal and Provincial governments, municipalities can only borrow money to pay for capital projects - not day-to-day operating expenses.

To accelerate capital plan spending in the next five years, the City will accelerate borrowing.  In accordance with the City’s Long-Term Fiscal Plan, Toronto City Council has established an affordability guideline that limits the City’s debt (including principal and interest) to 15 per cent of the property tax revenues. The City’s current tax supported debt is approximately $2.4 billion to the end of 2009.

To take advantage of the low interest rates and properly fund the capital needs, the City will refinance portions of the current and future debt.  The City will pay down existing debt and borrow funds for selected projects on 30-year terms, instead of the current 10-year term.  The 30-year debentures will fund long term assets such as subway tunnels and streetcars.  Lowering the annual debt payments, and spreading them out over a longer period, will allow the City to direct more property tax dollars to services each year and less to debt repayment.  These debentures will be protected from fluctuated interest rates.

To implement this approach, the City will use the proceeds of the Toronto Hydro promissory note, which had been dedicated to two specific areas of investment (Spadina subway and Waterfront development), and pay down approximately $600 million of existing debt. The projects previously funded from this reserve will be refinanced for that amount over a 30-year period and only when the funds are actually required.

Toronto’s Solid Waste and Water budgets will fund waste diversion and infrastructure renewal programs that protect the environment and build the economy

The 2010 proposed capital and operating budgets for Solid Waste Management Services and Toronto Water support the City’s priorities and Toronto’s ongoing commitment to waste diversion and infrastructure renewal programs.

The proposed budgets detail the City’s plans for building on the successes of these two important programs by making the investments needed to reach waste diversion goals and speed the pace of infrastructure renewal.  The capital budgets contained in these two programs play an important role in the ongoing roll-out of the City’s 10-year, $25.9 billion capital plan announced last year that will maintain and create over 30,000 jobs.  City Council will consider these budgets at its meeting on November 30, 2009.

Over the past several years, both Solid Waste Management Services and Toronto Water have hit significant milestones while maintaining progress toward critical waste diversion and infrastructure renewal goals.  These and key priorities for the 2010 budget are outlined in the backgrounders found on the City’s website.

Solid Waste Management
Solid Waste Management fees, which pay for much more than garbage collection, fund a wide variety of expanded diversion initiatives including recycling; organics processing; leaf and yard waste collection for composting; implementing packaging reduction policies; Community Environment Days; operation of City-owned Green Lane landfill; Reuse Centres; collection of durable goods; promotion, public education and outreach; and enforcement of mandatory diversion bylaws.

Key elements of the proposed 2010 Solid Waste Management Services budget are:

• New infrastructure to support waste diversion and disposal security
• Landfill infrastructure improvements in preparation for the closure at the Michigan border at the end of 2010
• New Green Bin processing facility at the Disco Transfer Station
• Complete roll-out of in-suite recycle bins to all multi-residential units
• Request for Expressions of Interest for proposed mixed waste processing facility

Enhanced service levels

• Complete roll-out of door-to-door curb side service for townhomes
• Roll-out Blue Bin and Green Bin service for residents living above commercial properties
• Extend Municipal Hazardous and Special Waste (MHSW) (formerly called Household Hazardous Waste) depot operations to five days per week, in addition to piloting a multi-unit building mobile depot service for MHSW and electronics
• Replace and upgrade existing street litter/recycle bins
• Continue to introduce Green Bin Program to multi-residential buildings
• Continue to roll-out durable goods collection

Toronto Water
In September of this year the Government of Canada and the City of Toronto announced Infrastructure Stimulus funding of $56.8 million for Toronto Water. Combining the infrastructure money with the Toronto Water capital plan means important projects such as Basement Flooding Relief projects can be accelerated. Funding key programs with the infrastructure money will result in cost savings to the City through reductions in water main breaks and basement flooding and will help the City improve beach water quality.

The infrastructure money and City funding will be used to specifically fund the following key Toronto Water programs:

• Coxwell Sanitary Trunk Sewer emergency repair
• Basement Flooding Relief
• Lead Service Replacement Program
• Lake Ontario and river water quality improvements
• Upgrading trunk water main infrastructure

As previously announced, Toronto Water is recommending a 9% water rate increase.  The 9% increase, which is part of a multi-year budget originally announced in the 2006 budget year, is important to ensure that the City can continue to provide quality drinking water and water treatment services and to address the city’s aging infrastructure.

The Toronto Water budget calls for an annual 9% increase every year up to and including 2014. For the average Toronto household, the new rate equals a $51 increase over 2009, with total costs for all water services including drinking water and wastewater treatment, and storm-water reduction and treatment averaging only $1.69 per day.  Toronto Water’s rates are amongst the lowest in the GTA.