Wednesday, February 1, 2006

Sewage or sentiment?

… the age old question in London. According to the London Free Press, budgetary restraints and council's self-imposed annual cap of $30 million in new debt may mean deferment of a $100 million sewage plant scheduled to be built in 2006. In turn, new development in southwest London, particularly industrial development along the Highways 401 and 402 corridors, may be restricted.

London will have to learn to say no to some developments in the southwest if it wants to delay building a new sewage treatment plant, city staff say. […] Staff are recommending the city delay construction of the Southside plant beyond the planned 2016 by maximizing capacity at existing plants by using new technologies and techniques. Delaying construction of the $100-million-plus plant would save the city tens of millions of dollars in capital spending, giving it time to reduce its current debt load. City officials warn the city would face not just the cost of building the plant, but growth-related costs for sewer, water, roads and other services once it's running. Advancing construction, staff say, would play havoc with the city's debt load and financial strategy aimed at preserving London's triple-A credit rating.

The downside of delay, staff say, is the city could miss out on large-scale industrial projects and restrict development of lower-cost housing because sewage capacity isn't available.

[…] It will take at least a year before the issue comes to a vote on council.
London's 2006 draft budget contained $858 million in spending, of which the city claims slightly less than half is discretionary. Of that discretionary spending, which can be conservatively estimated at $400 million, the proposed 2006 capital and operating included these examples of fiscal restraint:
  • Community Development, Forks of the Thames — $1.4 million
  • Community Development, New Affordable Housing — $2 million
  • Community Development, Lambeth Arena Refurbishing — $2.1 million
  • Culture, Various heritage, museum and centennial hall building renewal — $1.4 million
  • Community Programs & Strategies — $56.67 million — +3/5%
  • Environmental Programs — $0.5 million — new funding
  • Social Housing — $12.047 million — +11.1%
  • London Convention Center — $0.743 million — +11.6%
  • Museum London — $1.458 million — +3.2%
  • Tourism London — $1.558 million — +2.8%
[Note that at the time of this post the approved city budget has not been made available on the city's website; however, substantial decreases in spending between the proposed and approved budgets were not reported.]

These items alone total almost $80 million in discretionary spending, and do not include what are euphemistically called "Service Growth Initiatives," that apparently identify the service needs of such entities as Fanshawe Pioneer Village, Orchestra London, the Grand Theatre, arts and athletic grants, etc. that were estimated in the draft budget to cost about $2 million. Moreover, several years ago the city found the wherewithal to take on a $43 million liability to construct the JLC entertainment complex. In other words, the city can certainly afford to amortize $100 million in spending on a sewage plant over 10 years — without incurring new debt and reducing overall spending at the same time. It's too bad that sewage doesn't have the same kind of political cachet as recreation, entertainment and social programs. The "Anne Marie DeCicco Memorial Sewage Treatment Center" just doesn't buy the same kind of votes.

1 Comment:

Daniel said...

It's a helluva lot more appropriate as a name, though!