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Reconstructing a Stoney Creek street and upgrading its water services consumed eight years of all the property taxes of the houses fronting the road. That helps illustrate why the city is confronted with an accumulated $2 billion maintenance backlog that’s rising by nearly $200 million a year.
Over the last two years, Lake Avenue between Queenston Road and King Street has undergone a $2.1 million repair job – replacing the watermain and reconstructing the roadway and sidewalks. But the 95 residences along this one kilometre stretch pay less than $270,000 a year to the city in property taxes, or about one–eighth of the road work bill.
Lake is only two lanes, with no room for on–street parking, and only part of the west side with sidewalks. There were also minimal drainage costs because the grading allows stormwater flows to be directed to ditches on side streets and hence to two nearby creeks.
And the street’s residents pay more than most taxpayers. In 2011, they averaged just over $3425 per house (including education taxes), while the city–wide standard was $3240 (assessed value of $245,000).
Lake has a higher density than much of the city, especially the rural and suburban areas where many roads have far fewer than 95 houses per kilometre to pay the bills. There is a house on Lake about every 70 feet along both sides of the street.
Fortunately for the city, a block of apartments and a couple of businesses on Lake contribute an additional $62,400 in taxes. But even with that contribution, the road and watermain repair work consumed nearly six and a half years worth of the street’s total property taxes.
Of course the expenditures have to be spread out over a much longer period of time because the entire city road budget receives only one seventh of tax dollars and that portion has to cover snow removal, traffic signs and signals, street sweeping, patching, line painting, etc, plus road replacement. The largest share of taxes goes to policing at nearly one–fifth, a portion of which is also devoted to traffic management costs.
The pain to city financial planners was eased by charging 61 percent of the Lake Avenue project to the water and sewer budget. The city tries to combine pipe and road work to avoid doing the repaving twice, and allocates as much as possible to water rates – apparently because it’s easier to raise those than to convince residents of the need for a tax hike.
In 2011, property taxes only went up 0.5 percent while water rates climbed 4.25 percent – and will do the same in 2012 as a result of a little publicized decision earlier this month. But the average annual water bill is only $578 so even adding that into the revenues from Lake Avenue still leaves a large hole to fill.
The city owns $16 billion in infrastructure with roads comprising $4.4 billion. The average age of Hamilton’s 6500 lane–kilometres of roadway is 25 years. The average useful life is estimated to be only 33 years, and thus it’s not surprising that nearly a fifth of the roads are categorized as “beyond their useful life.” Another 38 percent are within five years of slipping into that category.
“Approximately 78 percent of the road network requires some form of either rehabilitation or reconstruction due to the deteriorated condition,” concluded a study completed last year.
In their recent capital budget report, staff calculated that $146 million should be spent on roads in 2012. But even shifting dollars from other needed infrastructure only produced $75 million in the budget adopted last month. V
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