thinking outside the gap - edmonton€¦ · thinking outside the gap infrastructure strategy report...

Infrastructure Strategy Report 2004

Thinking Outside the Gap

Opportunities to Address Edmonton’s Infrastructure Needs

~ Provincial infrastructure funding: Thisproposed provincial funding of up to $1 billion would be significant in addressingEdmonton's infrastructure issues.

• Opportunities Requiring Action by the City:

~ Smart Debt: Incorporate sustainableborrowing tools through:

- Tax-supported debt for next 3 years(2005, 2006, 2007) — generates anadditional $150 million

~ Arterial road levy: Approximately $60million in savings over the next decadecould be realized if developers fund thefull four-lane arterials to service newdevelopments.

~ User pay — development/improvementfees: Property owners are less hesitant topay user fees when the actual improvementsare visible and reflect the true cost ofproviding the service.

~ User pay — self-financing utilities: A self-financing utility can sustain the actual costs to deliver services.

T h i n k i n g O u t s i d e t h e G a p


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Municipal infrastructure is a critical componentto achieving economic prosperity, creatingvibrant neighbourhoods and culturally richcommunities, and committing to conscientiousand responsible environmental stewardship.The state of infrastructure defines a city'scapacity to deliver services to its citizens andprovide a desirable quality of life. ManyCanadian cities, like Edmonton, have limitedrevenues to address aging infrastructure, muchless respond to demands for newinfrastructure. A gap exists between the fundingrequired to address infrastructure needs andthe funding available to do so. Edmonton mustmanage this gap and become a “best-value”provider of sustainable infrastructure.

Managing infrastructure is becomingincreasingly challenging and City Council andcitizens alike face difficult decisions. ThinkingOutside the Gap: Opportunities to AddressEdmonton's Infrastructure Needs –Infrastructure Strategy Report 2004 providesthe inventory and state and condition of cityinfrastructure and explores the followingpotential funding and strategic managementopportunities to address the gap:

Closing the Gap examines methods ofgenerating new revenue for long-terminfrastructure investments and reinvestmentstrategies. Major prospects to reduce theinfrastructure gap are now emerging and theCity of Edmonton will be prepared to seize thefollowing funding and partnershipopportunities:

• Anticipated Revenue Opportunities:

~ Municipal Rural Infrastructure Fund (MRIF -federal / provincial): Through this program,Edmonton could receive up to a total of$12 million from the other two orders ofgovernment to apply to infrastructure projects.

~ GST rebate (federal): Over the next 10 years,up to $80 million may be available throughthis rebate to fund infrastructure projects.

~ Gasoline tax rebate (federal): The City ofEdmonton could receive about $300million through this rebate over the nextten years.

• Possible Resource Opportunities from theProvince:

~ Education tax: Capping the education taxmay provide an additional $370 millionover the next decade to fund infrastructure.

~ Legislative changes to allow cities toimpose taxes: With greater authority togenerate tax revenues the City couldincrease revenues for essentialinfrastructure projects.

~ Matching responsibilities with resources:The provincial government couldsignificantly reduce the fiscal burden oncities by taking back responsibility forservices such as emergency medicalservices and affordable housing.

~ Revenue sharing with municipalgovernments: This policy could provide astable, sustainable source of funding tomunicipalities.

Executive summary



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A report to Council titled Building Edmonton'sNext Century — New Deal Investment andPartnership Strategy will identify how theopportunities described in this report canpotentially be applied to investment projects inEdmonton. The New Deal report will outline theCity's approach for building relationships andpursuing partnerships with other orders ofgovernment and stakeholders. Also related tothese initiatives are a series of motions passedby Council which have become the basis of theCity's Urban Sustainability Action Plan.

Though there are many external factorscontributing to the gap that are beyond the City'scontrol, and though there is no single solutionthat will alleviate Edmonton's infrastructurechallenges, the City must persist in exploringsuitable revenue sources and more cost-effectiveapproaches to address the infrastructure gap.Thinking outside the gap, by exploring newopportunities and relationships, will enabledecision-makers to realize Edmonton's visionfor prosperity and success.

Managing the Gap involves the identificationand implementation of strategies, processesand tools to optimize decision-making andinvestment planning. These long-term planswill play an important role in managing thefactors affecting infrastructure demand.Included in this section are:

• Maximize use of existing infrastructure: This initiative involves recommendationsaimed at making strategic choices aboutEdmonton’s future growth and developmentto sustain Edmontonians’ quality of life.

• Comprehensive asset management system:Includes risk assessment and life cycleanalysis to optimize decision-making andinvestment planning.

• Sustainable levels of service: Determinelevels of service that are financially, sociallyand environmentally sustainable.

• Shared services: Examine cost effectiveand cost sharing strategies amongcommunities to optimize infrastructureinvestment and generate synergies.

• Other opportunities

~ Link property tax increases with specificinvestment

~ Public-private partnerships (P3)

~ Alternate service delivery


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Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iTable of contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iiiIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1What is infrastructure? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2What is Edmonton’s infrastructure gap? . . . . . . . . . . . . . . . . . . . .2Why does the infrastructure gap continue to grow? . . . . . . . . . . . .3What has Edmonton done to address the infrastructure gap? . . . . .4What else can Edmonton do to address the gap? . . . . . . . . . . . . .5Closing the Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7Anticipated revenue opportunities . . . . . . . . . . . . . . . . . . . . . . . .7Municipal Rural Infrastructure Fund (MRIF – federal/provincial) . . . . . . . . . . . . . . .7

GST rebate (federal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Gasoline tax rebate (federal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Possible resource opportunities from the Province . . . . . . . . . . . .8Education tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Legislative changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Matching responsibilities with resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Revenue sharing with municipal governments . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Provincial infrastructure funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Opportunities requiring action by the City . . . . . . . . . . . . . . . . . .10Smart debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Arterial road levy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

User pay – improvement fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

User pay – self-financing utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

Managing the Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12Maximize use of existing infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Comprehensive asset management system . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Sustainable levels of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Shared services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Other opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Link property tax increases with specific investment . . . . . . . . . . . . . . . . . . . . .14

Public-private partnerships (P3s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Alternate service delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Final thoughts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16Appendix A: Current status of City’s infrastructure . . . . . . . . . . .17What do we own? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Age of infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Value of infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

State and condition of infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

Appendix B: Summary of infrastructure inventory . . . . . . . . . . . .21Appendix C: Summary of infrastructure investment needs (2005-14 Long Range Financial Plan) . . . . . . . . . . . . . . .24

Appendix D: Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

Table of contents



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Sound infrastructure is essential to supportour community’s goals for growth, economicdevelopment and public safety. The state ofmunicipal infrastructure, in a very real sense,defines the City’s capacity to meet its goals.The ability to build and properly maintaininfrastructure is essential to ensure thatEdmonton remains an attractive capital citywhere businesses want to locate and expandand where people choose to live, learn, workand play.

Over the years, the City of Edmonton has effectivelymanaged revenues, balanced competingdemands and provided a high quality of life toits citizens. Since the implementation of theInfrastructure Strategy in 1998, the City hasworked aggressively to address its infrastructuregap. However, like other Canadian cities,Edmonton has limited revenue tools, infrastructurecontinues to age and the population continuesto grow. As a result, Edmonton faces a difficultstruggle to provide citizens with basicinfrastructure needs.

Inevitably, sustainable municipal infrastructurehas emerged to become a prominent urbanissue in the past few years. The Prime Minister’sCaucus Task Force on Urban Issues, ConferenceBoard of Canada and Province of Alberta’sFuture Summit all identified the social andeconomic importance of municipal infrastructure.The federal and provincial governments areconsidering funding for municipal infrastructure.Asset management practices are gainingsupport as an effective way to better managemunicipal infrastructure.

Thinking Outside the Gap: Opportunities toAddress Edmonton’s Infrastructure Needs –Infrastructure Strategy Report 2004 is theadministration’s commitment to report to Councilevery two years on the City’s infrastructureinventory, including its state and condition.This report not only provides an overview ofthe work the City has undertaken to implementinnovative infrastructure managementstrategies, it also details financial needs, andmore importantly, explores solutions to narrowthe infrastructure gap.

While much work has been done, considerableeffort is required to find long-term solutionsthat will address our infrastructure gap.Solutions to this issue will require objective,innovative approaches – they necessitatethinking outside the gap.

Introduction

“Canadians want their communities, towns and cities to be great places

to live – safe, with affordable housing, good transit, clean air and water,

and abundant green spaces. Communities are key to our social goals

and our economic competitiveness. They are the front lines in building

a better quality of life.”

~ Her Excellency Adrienne Clarkson, Governor General of Canada (Throne Speech, October 5, 2004)


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The City of Edmonton defines infrastructure as“all the physical assets developed and usedby the City to support the community’s socialand economic activities.” Infrastructureprovides the foundation on which we carry outour everyday activities and contributes tocitizens’ overall quality of life. It is used in amunicipal context to describe virtually everythingfrom roads to affordable housing to playgrounds.

Covering 700 square kilometres and with apopulation of approximately 700,000 residents,Edmonton has an impressive infrastructureinventory. For example, Edmonton hasthousands of kilometres of sewers, roads andsidewalks; sophisticated water and wastewatertreatment facilities; thousands of hectares ofparkland and dozens of major recreationalfacilities. The estimated replacement value ofEdmonton’s infrastructure assets is estimatedat $19.2 billion. Appendices A and B providean overview of the age, replacement value andthe state and condition of Edmonton’sinfrastructure assets.

What is infrastructure? What is Edmonton’sinfrastructure gap?The infrastructure gap is the difference betweenthe City’s capital needs and the fundingavailable to address the City’s infrastructurerehabilitation and growth requirements.

The City of Edmonton’s 2005-14 Long RangeFinancial Plan (LRFP) (see Appendix C)estimates the City requires nearly $7.2 billionover 10 years to accommodate the demand forgrowth, rehabilitation and other infrastructureprojects. The funded portion of the LRFPamounts to more than $3.0 billion. Thecorresponding unfunded portion of the LRFP,or the infrastructure gap, is more than $4.1billion. In other words, Edmonton’s fundedinitiatives constitute approximately 40 per centof the LRFP whereas unfunded initiativescomprise close to 60 per cent of the plan.



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The infrastructure gap has grown from $1.8 billionin 1998 to the current estimate of $4.1 billion.Growth of the gap is due to two major factors– aging infrastructure which needs to bereplaced and demand for new infrastructure.

Managing Edmonton’s infrastructure is challenging.As infrastructure ages, more maintenance and rehabilitation is required to ensure thatinfrastructure is performing well. Most municipalinfrastructure has passed the halfway point ofits expected lifespan and is due for significantrehabilitation (see Appendices A and B).

At the same time, demands arise for newinfrastructure to support growth. Edmontoncelebrates its centennial birthday this year.Looking back over the past one hundred years,the City has encountered significant growth,some of which has occurred quite rapidly.Since 1998, Edmonton’s population hasincreased by approximately 40,000 people,which is the same as adding an entirely newcity the size of Grande Prairie. Over the next fiveyears, the Edmonton Socio-Economic Outlook,2004 – 2009 forecasts a similar populationincrease, a strong housing market and continuedeconomic and employment growth. However,there are associated social and cost implicationsof economic prosperity. Edmonton must still dealwith continued municipal infrastructure shortfallsand social issues — such as a shortage ofaffordable housing — which cannot be addressedsimply by an increase in the tax base.

“Municipalities continue to face

financial pressure to repair or

replace existing infrastructure.”

~ Alberta Municipal Affairs (Business Plan 2004-07)

The growth of the infrastructure gap can beattributed to a number of other factors. The City is committed to conscientious andresponsible environmental stewardship throughthe 1999 Environmental Strategic Plan, butthere are costs associated with the new andstringent environmental requirements. Inaddition, a growing backlog of unfundedprojects that become more expensive as timepasses and escalating construction costs inEdmonton’s booming economy also contributeto the growth of the gap.

Why does the infrastructure gap continue to grow?


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Edmonton is recognized nationally as one ofCanada’s most progressive municipalities inits response to managing growing municipalinfrastructure pressures. In 1998, City Councilestablished the Infrastructure Strategy toaddress the infrastructure gap, and createdthe Office of Infrastructure in 2000 to developmanagement tools to narrow the gap. A numberof effective measures were initiated to helpthe City better manage infrastructure assetsand minimize the infrastructure gap:

• Corporate infrastructure asset managementapproach: a comprehensive infrastructureinventory, which captures the value andstate of the City’s infrastructure and its long-term investment needs.

• Effective tools such as life cycle analysisand risk assessment: identify priority areasand optimize investment decisions.

• Innovative revenue partnerships involvingdevelopers and home builders to supportnew developments: the Sanitary SewerStrategy Fund for the construction of majorsanitary sewers and arterial assessmentfees for future construction of arterial roads.

• Land drainage utility: a self-financing user-pay system that is independent of generalrevenues collected through the propertytaxation system for land drainage operationand projects.

• Amendment to the City’s Debt ManagementFiscal Policy in 2002: tax-supported borrowingof up to $50 million per year over five years,reviewed annually, to fund large-scale, high-priority capital projects.

• The Infrastructure Technical Advisory Committee(ITAC): is an advisory committee made up ofkey stakeholder groups with expertise inmunicipal infrastructure, and was designedto shape and help effectively implement theCity of Edmonton’s Infrastructure Strategy.

What has Edmonton done to address the infrastructure gap?



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This report lists a number of opportunities theCity can apply to address the gap. Potentialapproaches have been grouped in twocategories. Some opportunities requiresignificant changes to City policy while othersmay require minimal change:

• Closing the Gap: opportunities that coulddecrease the existing gap between the City’sinfrastructure needs and the resourcesavailable to fund those needs. Major fundingand relationship-building opportunities arenow emerging to reduce the infrastructuregap.

• Managing the Gap: opportunities thatminimize the growth of the gap. Theseopportunities consist of management toolsor concepts to optimize decision-making andinvestment planning.

What else can Edmonton do to address the gap?

The administration has developed a report toCouncil, Building Edmonton’s Next Century –New Deal Investment and PartnershipStrategy, which identifies how theopportunities outlined in Thinking Outside theGap: Opportunities to Address Edmonton'sInfrastructure Needs – Infrastructure StrategyReport 2004 can be applied to investmentprojects in Edmonton. The New Deal reportalso outlines the City's approach for ongoingrelationships and partnerships with otherorders of government and stakeholders.

Potential revenue sources are summarized inFigure 1. The chart is based on a “best case”scenario and is used to illustrate opportunitiesto address the infrastructure gap.


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Figure 1: Opportunities to Address the Gap

EstimatedClosing the Gap $ million / 10 yrs

Anticipated Revenue Opportunities:• Municipal Rural Infrastructure Fund (MRIF –

federal/provincial) 12• GST Rebate (federal) 80• Gasoline Tax Rebate (federal) 300

Possible Resource Opportunities from the Province:• Education tax 370• Legislative changes to allow city to impose taxes• Matching responsibilities with resources• Revenue sharing with municipal governments• Provincial infrastructure funding up to 1,000

Opportunities Requiring Action by the City:• Smart Debt

o Tax-supported debt next 3 years 150• Arterial Road Levy 60• User pay – development/improvement fees• User pay – self-financing utilities

Managing the Gap

Strategies, Processes and Tools to Optimize Decision-Making and Investment Planning• Maximize use of existing infrastructure• Comprehensive asset management system• Sustainable levels of service• Shared services• Other opportunities

o Link property tax increases with specific investmento Public-private partnerships (P3)o Alternate service delivery

MRIF$120.3%

GST Rebate$802% Gas Tax

Rebate$3007%

Education Tax

$3709%

ProvincialInfrastructure

Fundingup to $1,000

24%

Tax SupportedDebt (Next 3 Years)

$1504%

ArterialRoad Levy

$601%

Remaining Gap$2,166

53%

Denotes possible one-time funding

Denotes potential funding for neighborhood reinvestment

Total Infrastructure Gap – $4.1 billion/10 years

Total Opportunities – $2.0 billion/10 years



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Closing the Gap

Closing the Gap includes long-term infrastructureinvestment and reinvestment strategies tomaintain city assets into the future. The Citymust partner with other orders of governmentto ensure sustainable funding to addressdeferred rehabilitation, maintenance andcapital investments. The strategies mustensure the City continues to prudently manageexisting revenue generated through propertytaxes, grants and levies. Edmonton needs toconsider opportunities beyond taxation thatcould include innovative revenues, fundingpartnerships, smart debt and full-costallocation to users. The City must also lobbyother orders of government for the authority tointroduce innovative revenue tools.

Anticipated revenue opportunitiesAnticipated revenue opportunities are relatedprimarily to options initiated or administeredby the federal government. Some of theseopportunities have reached the implementationstage; others are still in the developmental stage.

Municipal Rural Infrastructure Fund(federal/provincial)

On February 12, 2004, the Government ofCanada announced negotiations with eachprovince and territory to provide Canadianswith better public infrastructure through theMunicipal Rural Infrastructure Fund (MRIF). The$1 billion fund has been structured to providea balanced response to local infrastructureneeds in urban and rural Canada.

Up to 20 per cent of the MRIF will be allocatedto municipalities with a population greater than250,000. Through this program, Edmontoncould receive up to $6 million from each of theother two orders of government for a total of$12 million over the next four years to apply toinfrastructure projects. Because this programhas a defined end date, it cannot beconsidered a long-term, sustainable source offunding.

Negotiations between the Province of Albertaand the Government of Canada are ongoing. Itis anticipated the program will begin in 2005.

GST rebate (federal)

Municipalities have lobbied extensively for thefederal government to provide funding toaddress the growing infrastructure needs ofcities. The federal government made a commitmentto reimburse the GST to municipalities eachyear, starting in 2004. The change in GSTlegislation will result in approximately $12 millionin annual savings to the City, of which $4 millionhas been designated to specific areas (e.g.,grants, reserves, debenture financing, partnerfinancing, etc.). Over the next 10 years, up to$80 million may be available to financeinfrastructure projects.

Gasoline tax rebate (federal)

During the 2004 federal election, the LiberalParty committed to share a portion of thegasoline tax (or its financial equivalent) withmunicipalities. Addressing the Future ofCanada's Infrastructure Conference, JohnGodfrey, Minister of State (Infrastructure andCommunities), noted the gas tax will be a source of stable, predictable funding so thatmunicipalities can make long-term financialcommitments to undertake major newinfrastructure projects. Prime Minister PaulMartin has said that over the next five yearsthe Government of Canada will provide a totalof $5 billion, with at least $2 billion, or fivecents per litre, in the fifth year. Based onthese figures, the City of Edmonton couldreceive about $300 million over the next tenyears.

“In short, the current fiscal challenges confronting western

Canada’s cities constitute a powerful argument for

employing a range of tax tools and revenue levers, where

the advantages and disadvantages of one tax can be offset

by the advantages and disadvantages of other taxes.”

~ Casey Vander Ploeg, Straight Talk, Canada West Foundation


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Possible resource opportunitiesfrom the ProvinceMunicipal governance is mandated by theAlberta Municipal Government Act. Municipalitiesmust work with the Province to improverevenue opportunities and the Province mustprovide municipalities with the capability toaddress infrastructure issues.

Education tax

In their submission to the Province, Sustainingthe Alberta Advantage: A call for provincialinvestment in Calgary and Edmonton,Edmonton and Calgary formally requested thatthe Province honour its 2001 commitment tocap the total provincial education requisition at$1.2 billion in the 2005-06 provincial budgetand reduce the education requisition onproperty taxes an additional $120 millionannually until it is eliminated as a provincialtax source. This request adheres to theAlberta Urban Municipalities Association’s(AUMA) guiding principle that:

“Municipal governments must have the fiscal

capacity to fulfill their mandate through

primary access to the property tax base and

other stable long-term and progressive

sources of revenue.”

By assessing and collecting property taxes atcurrent rates, and capping the portion allocatedto education, municipalities could obtain muchneeded additional funds for infrastructureprojects. In Edmonton’s case, the 2004 educationtax collected is approximately $247 million.Capping the education portion of the propertytax at the 2001 amount of $210 million wouldyield an estimated $37 million annually orapproximately $370 million over the next decade.

If the Province totally eliminated the educationtax Edmonton collects, and allocated thosefunds as municipal revenue, additional fundingcould be generated for capital projects. However,operating impacts of capital investments wouldneed to be considered and a balance attainedbetween capital investments and associatedoperating costs. This would provide a stable,long-term source of funding that could addressongoing and future budgeting requirements.

The government will be developing its 2005-06budget this fall. While there is no indicationthe Province will follow through on its commitment,there has been continued debate about thisissue. Edmonton is working with the City ofCalgary and the provincial government toarrive at a favourable solution.

Legislative changes

Cities could better shape their future if taxrevenues were more equitably shared amongthe three orders of government. Taxationauthority is vested in the provincial and federalgovernments, and Canadian cities must rely onproperty taxes, which are considered the mostregressive form of taxation in the country.

Several notable organizations (Canada WestFoundation, TD Bank Financial, etc.) haveargued cities must have additional legislativeauthority to generate revenues. Currently theMunicipal Government Act does not allowmunicipalities to do so.

American cities, which have access to abroader set of revenue tools that includessales tax, hotel tax, employment tax andothers, are empowered to take some of theeconomic burden off property owners andbetter absorb changes in the economy.

With greater authority to generate tax revenuesthe City would rely less on property taxes. Inturn, this would enable the City to increaserevenues that could be dedicated to essentialinfrastructure projects. The City should supportall initiatives that seek legislative changes totraditional means of revenue generation.



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Matching responsibilities with resources

Cities continue to provide a multitude ofservices that have traditionally been offered bythe Province. The provincial government couldsignificantly reduce the fiscal burden on citiesby taking back responsibility for services suchas emergency medical services, affordablehousing and major roads.

The Province is currently funding Edmonton’sportion of Anthony Henday Drive, which is partof the North-South Trade Highway. Theprovincial government’s plan to take overemergency medical services will allow the Cityto reinvest the operating expenses and capitalcosts of operating ambulance services intoother priority projects and services. In additionto the transfer of emergency medical services,new provincial contributions to police fundinghave also resulted in a net gain of $5.4 millionin funding for Edmonton. The provision ofaffordable housing, traditionally a provincialresponsibility, is another service that could bereturned to provincial authority and jurisdiction.

Revenue sharing with municipalgovernments

The Canada West Foundation recently releaseda report titled Foundations for Prosperity:Creating a Sustainable Municipal-ProvincialPartnership to Meet the InfrastructureChallenge of Alberta’s 2nd Century, whichdescribes recommendations for a sustainablepartnership among municipalities and theProvince. Funding obtained from other ordersof government is often tied to specificprojects, resulting in indiscriminate funding of

initiatives that may suit guarantors’ interests,but overlook municipal priorities.

Revenue sharing can address this issue andprovide a stable source of funding tomunicipalities. Given that the Province hasmuch more flexibility to generate revenuesthan municipalities, this approach wouldenable municipalities to pay down debts at afaster rate and facilitate stable infrastructuremanagement into the future. A revenuesharing system could be developed whereby acertain percentage of an established source ofrevenue (such as income tax, fuel tax orgaming revenues) would be allocated tomunicipalities for infrastructure projects. Thismoney could then be used by municipalities toinvest in infrastructure assets as they deemsuitable. To be sustainable, revenue sharingmust be legislated to establish a permanentsource of funding.

Provincial infrastructure funding

In recent news the Province of Albertadiscussed a possible investment of $3.3 billionto rehabilitate Alberta’s municipal infrastructure.On September 23, 2004, Premier Ralph Kleinindicated the Province’s proposal to give up to$1 billion to Edmonton, $1 billion to Calgaryand $1 billion to be shared by other Albertamunicipalities. At present, details of thisproposal are uncertain but funding of thismagnitude would be significant in addressingEdmonton’s investment requirements. Moreinformation is anticipated from the Provincebut, at present, this funding must be viewedas neither long-term nor sustainable.


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Opportunities requiring action bythe CityThere are additional opportunities to addressthe infrastructure gap that require decisionand action by the City. Consideration must begiven to these opportunities and the consequencesof implementing them. These options depictthe magnitude of policy change that mustoccur in order for the City to effectively addressthe infrastructure gap. The City of Edmonton isbest positioned for the future if it is proactivein tackling infrastructure issues in a mannerconsistent with other revenue enhancementsfrom other orders of government.

Smart debt

Smart debt is one of the primary sources offinancing for U.S. municipalities and providesgreater flexibility for keeping pace with growinginfrastructure demands. It is also becoming anincreasingly common tool used by Canadianmunicipalities to fund infrastructure.

The City of Edmonton Debt Management Fiscal Policy (DMFP) was amended in 2002. A borrowing policy of $50 million per year overfive years, paid for by a one per cent increasein property tax, for large, high-priority capitalprojects was approved in principle by Council.According to City policy, debt financed projectsmust be in the range of $10 million, have anasset life of at least 15 years, and must fitinto approved capital plans.

Having committed $100 million in debt financingfor key infrastructure projects in 2003 and2004, Edmonton has already made significantstrides in dealing with key infrastructureissues. It is proposed that another $50 millionbe borrowed in 2005 to finance infrastructureprojects.

If the City continues borrowing $50 million ayear for the next three years, an additional$150 million would be available for majorinfrastructure projects.

Arterial road levy

Arterial road levies are assessments requiredto pay for an arterial roadway located within apredetermined catchment area. Each developmentoccurring within the catchment is required topay an assessment based on a per hectarerate. Currently, the standard practice is thatdevelopers pay for the construction of twolanes of an arterial road, and the City pays forthe remaining two lanes. If the arterial roadlevy is implemented by the City, developerswould be required to fund a four lane arterialroad in new developments. It is estimated thatthis levy would generate another $60 to $65 million in savings over the next decade.



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User pay – improvement fees

Levies such as development/improvementfees should be used wherever possiblebecause when property owners actually seeimprovements, they are less hesitant to pay alevy. Under the Municipal Government Act, theCity is allowed to apply local improvement fees.

Currently, improvements are constructed in 25 per cent of neighbourhoods through localimprovement fees. Examples of local improvementcharges include street paving, alley paving andrenewal of concrete curb and gutter.

Consideration of new development/improvementcharges or levies is another potential alternativeto financing infrastructure, whereby eachmunicipality determines and applies fees andlevies based on their particular policies. Someof the development fees and levies in place atthe City of Edmonton include inspection fees,drainage levies and arterial road assessments.

Generally speaking, development or improvementfees and levies should be determined on areal-cost basis, which reflects the true expenseof providing services to new developments orneighbourhood reinvestment. Additionaldevelopment or improvement costs need to beconsidered very carefully as the fees wouldeventually be passed on to the homebuyer andmay result in a higher cost for houses.

User pay – self-financing utilities

Prudent fiscal management at the municipallevel has also resulted in some new fundingmethods using self-financing utilities. A self-financing utility can sustain the actual costs todeliver services, including the life cycle costsof operation, maintenance, rehabilitation andreplacement of infrastructure.

In 2003, City Council converted land drainageto a utility, making the service self-financing,as all costs are recovered directly from users.Renewal, upgrading and expansion costs areall amortized into the rate payment. As such,the City no longer needs to incorporate landdrainage services in its property tax-supportedcapital budget projections. Infrastructuredemands will put increasing pressure on utility rates.

It may be difficult for the City of Edmonton toimplement additional utility or user-pay basedservices because of the nature of certaininfrastructure assets. However, this does notnegate the user-pay model as a valid source offunding. For example, it may be possible todesign a full utility model for the City’s wastemanagement services. Other options related tothis type of funding should be explored further.


12

Managing the Gap

Managing the Gap involves the identificationand implementation of strategies, processesand tools to optimize decision-making andinvestment planning. The City must continue toimplement an effective infrastructuremanagement system across the corporation,ensuring that the technical planners – thosewho propose and build infrastructure assets –are working in collaboration with financialdecision-makers.

In the spring of 2004, Council held the FourPillars of Urban Sustainability workshops. Theseworkshops were designed to capture ideasand concepts from the successful Strategiesfor Urban Sustainability Conference that Edmontonhosted in 2003. As a result, Council passed aseries of motions that formed the City’s UrbanSustainability Action Plan. The Plan addressesthree elements of urban life:

• Urban Form: what kind of city are we tryingto build?

• New Fiscal Deal: how will we finance our city?

• Regional Strategy: how does our city co-existwithin the larger region?

As ongoing implementation occurs, this actionplan will play an important role in managingthe factors affecting infrastructure demand.

The following are an array of options thatfocus on influencing the demand forinfrastructure financing:

Maximize use of existinginfrastructure The City of Edmonton works hard to deliver an exceptional quality of life to its citizensthrough the provision of amenities that make a community a good place to live. Maximizingthe use of existing infrastructure will enhancethe City's ability to manage growth and tooptimize investment in future infrastructure.

City building initiatives, such as Smart Choices,will have a tremendous potential impact on theCity's capacity to effectively manage infrastructureassets. Smart Choices, devised to sustainEdmonton's quality of life by building onexisting municipal and private infrastructure,provides strategies to manage growth throughintensification and reinvestment. This,accompanied by infrastructure enhancement,improves liveability and facilitates theconstruction of progressive cities.

Policy issues arising out of Smart Choices canbe coordinated with the Infrastructure Strategy.While Smart Choices articulates corporatepolicies concerning redevelopment and reinvestment,the Infrastructure Strategy provides many ofthe decision-making tools to ensure effectiveinvestment decisions are made to build newinfrastructure and rehabilitate and replaceexisting infrastructure.

These two initiatives do not exist independently:linkages to Plan Edmonton, the Long RangeFinancial Plan and the Capital Priorities Planshould also be made. Furthermore, a verystrong relationship exists between BuildingEdmonton's Next Century — New DealInvestment and Partnership Strategy and theUrban Sustainability Action Plan.



13

Comprehensive assetmanagement systemAn effective asset management system isessential to optimize decision-making andinvestment planning. Although the City hasinitiated high level asset management similarto what is recommended in the InfraGuideBest Practice on “Managing InfrastructureAssets”, it is important that all departmentsfully implement a comprehensive assetmanagement system at a more detailed level.

The City is implementing an innovative riskmanagement model as a way of prioritizingprojects to assign available funding. Bydetermining the severity of risk associatedwith current infrastructure investment, theadministration will be able to compare disparateinfrastructure elements on a corporate leveland determine which critical areas require themost urgent action. To date, the risk assessmentmodel has been applied to the physical conditioncomponent of the assets; the model will alsobe adapted to assess the demand/capacityand functionality of infrastructure.

Life cycle analysis can help the City select the most cost-effective option to addressinfrastructure investment. The cost of newinfrastructure does not stop at the initialcapital cost. The life cycle costs of operation,maintenance, repair, rehabilitation andreplacement must also be accounted for andincluded in the budget to ensure adequatefunding. For example, in comparing constructionmaterials such as asphalt or concrete to constructa new road, life cycle analysis enables projectestimators to compare not only the initial costof each building material, but also the

performance effectiveness, future reinvestmentneeds and the total cost of operating, maintaining,rehabilitating and replacing the road assetover its entire life. These costs can beproperly recognized in the City’s budget plan.

The Office of Infrastructure is currently developinga revised Infrastructure Strategy to be presentedto Council in 2005 that will recommend theCity implement a comprehensive assetmanagement system and continue to developother effective decision-making tools.

Sustainable levels of serviceOnce a city determines what services it willprovide, it must decide at what level it willprovide those services. Determining levels ofservice is an important component in anyinfrastructure management system. Levels ofservice usually relate to quality, quantity, reliability,responsiveness, environmental acceptabilityand cost of providing services. Service levels,in many ways, determine what infrastructure isrequired; infrastructure capacity determineswhat level of service can be delivered. It is theresponsibility of City Council, with citizen input,to determine appropriate levels of service.

Levels of service provided by the City areultimately determined by users’ willingness topay. Citizens may demand higher services, butthere are cost implications to such demands.Before any decision is made, the costs associatedwith levels of service and the financial resourcesavailable must be determined. Willingness topay and the implications of failing to achievelevels of service also need to be understood.Levels of service must be financially, socially

and environmentally sustainable over anasset’s lifespan.

Current design and construction standards areregularly reviewed by a committee comprisedof city staff and representatives from theUrban Development Institute, with input andexpertise from external organizations such asthe Transportation Association of Canada. Apilot project is planned to implement a citizen/stakeholder review of service levels for oneinfrastructure area.


14

Shared servicesCost effective and cost sharing strategiesamong communities can be examined tooptimize infrastructure investment andgenerate synergies. Collaborative capitalplanning, shared construction and shared useof facilities and related infrastructure canresult in considerable cost efficiencies.Infrastructure investment can take place in a mutually beneficial manner to optimizesavings, reduce costs and maximize usageamong partners.

Currently, the City of Edmonton's DrainageServices treats Leduc's sewage flows from theAlberta Capital Region Wastewater Commission(ACRWC) and, in turn, ACRWC treats thatCity's sewage flows from the north side ofEdmonton. Wastewater and solid wastetransfer stations also services the greaterEdmonton area. Other possible shared serviceareas include transit, waste management,police services, etc.

Other opportunitiesThe following opportunities provide additionalalternatives that would require furtherinvestigation on the applicability to the City ofEdmonton:

Link property tax increases with specificinvestment

Future property tax increases could be dedicatedto specific infrastructure projects. Dedicatingtax increases to particular infrastructureprojects would be advantageous since the dollarswould be applied directly to a particular projectand would not disappear into general revenue.

Another viable opportunity is to increase thelevel of pay-as-you-go funding to capital projects.The current level of pay-as-you-go capitalfinancing is approximately $80 million. TheCity is changing its approach by increasing thatfigure annually according to the ConstructionPrice Index. City Council has the capacity tofurther increase pay-as-you-go funding levelsbeyond the index. Each one per cent tax increasegenerates $5.4 million, which could be appliedto pay-as-you-go funding.

Public-private partnerships

Traditional ways of doing business have notkept pace with Alberta’s booming economy.This is perhaps most evident in the Province’stwo largest cities – Calgary and Edmonton.Subsequently, the Province has initiated aprocess that will see the southeast leg of theEdmonton ring road become Alberta's firstpublic-private partnership (P3) highway project.Though P3 projects are not uncommonthroughout the world, Canadian municipalitieshave been slow to adopt this approach.

The merits and advantages of using the P3concept must be weighed against disadvantagesand the perception that governments wouldrelinquish jurisdictional control and createundesirable outcomes. P3 projects must bestructured, transparent and advantageous toall partners. Most importantly, P3s must notbe implemented at the expense of the taxpayerin the form of increased taxes or fees.

Alternate service delivery

This option is presented to stimulate dialogueand initiate discussion on ‘traditional’ ways ofdelivering municipal services. Opening upmunicipal services to competition may resultin economies and/or efficiencies, but thoughtmust be given to potential negative ordisruptive consequences.



15

Final thoughts

The City has made significant strides inaddressing the pressures of inadequatefunding to properly maintain and build newinfrastructure assets. Nevertheless, theinfrastructure gap continues to grow due to anumber of variables, not all of which are withinthe control of Council and the administration.Council continues to face challenging circumstancesas it makes decisions to maintain servicesand minimize property tax increases.

While it is the responsibility of Council and theadministration to address the infrastructuregap, it is unlikely that the City can close thegap on its own. The Building Edmonton’s Next Century — New Deal Investment andPartnership Strategy report summarizesopportunities for future involvement of otherorders of government and partners to create a prosperous, vibrant, culturally rich andenvironmentally conscious city.

The City must also embrace new opportunitiesto address the gap – opportunities thatdepend on the willingness of Council and theadministration to take action. Such actionrequires extensive public dialogue, as citizensand the City need to work together to defineacceptable parameters around the cost anddelivery of municipal services. This requires amade-in-Edmonton solution that is widelyunderstood and endorsed by citizens.

Though there is no single solution that willalleviate Edmonton’s infrastructure challenges,persistence is crucial as the City exploressuitable revenue sources and more cost-effective approaches to manage theinfrastructure gap. Edmonton mustdemonstrate leadership, influence the othertwo orders of government to shareresponsibility in managing this issue andadvocate for mutually beneficial solutions.

“It is important to stress, therefore, that creating a sustainable funding

solution for municipal infrastructure should not fall on the shoulders of

any one government; Albertans need a balanced and comprehensive

strategy that includes the municipal, provincial and federal

governments.”~ Casey Vander Ploeg, Foundations for Prosperity, Canada West Foundation


16

Appendices



17

What do we own?The City of Edmonton defines “infrastructure”as “all the physical assets developed andused by the City to support the community’ssocial and economic activities.” The City’scorporate administration manages a broadrange of infrastructure that can be groupedinto 12 key infrastructure classes 1, asdetailed below.

Appendix A: Current status of City’s infrastructure

1 Water services are managed by EPCOR Utilities Inc. (a private corporationowned by the City of Edmonton), and is not included in the City’sinfrastructure inventory.

Description of Infrastructure

Drainage includes sanitary, storm and combined sewers (incl.manholes, catchbasins) and wastewater treatment.

Road Right-of-Way includes roads (arterials, collectors, local; and curb andgutter), sidewalks, bridges and auxiliary structures(such as gates, streetscapes and others).

Parkland includes horticulture, trails, hardsurfaces, playgrounds,sportsfields, park infrastructure and parks.

Transit Facilities and includes Light Rail Transit (LRT) systemEquipment facilities and equipment (including cars), transit centres,

bus equipment and systems, trolley system.

Fleet includes transit buses, city vehicles and shopequipment.

Buildings includes civic offices, public works and operationfacilities (e.g. yards), emergency response buildings,police buildings and libraries.

Traffic Control & includes traffic signals, signs, markings, streetStreet Lighting lighting and parking meters.

Recreation Facilities includes all major recreational facilities (e.g. arenas,leisure centres, Fort Edmonton) and amenities.

Affordable Housing includes non-profit housing, community housing andseniors lodges/cabins.

Waste Management includes operation and administration facilities,Facilities transfer stations and public facilities, processing

facilities and operating landfills and appurtenances.

Technology Equipment includes servers, network, all communicationequipment.

Others includes emergency response and police equipment,and library contents and materials.


18

Age of infrastructureOn average, Edmonton’s infrastructure assetshave passed the midpoint of their life expectancy.The aggregate average age2 of infrastructureassets is 30 years, while average life expectancyis 50 years of age, rounded to the nearest fiveyears. Edmonton’s inventory ranges in averageage from five years to 75 years.

0

10

20

30

40

50

60

70

80

Average Age

Expected Asset Life

Yea

rs

Infrastructure Element

2 Aggregate average age figures have changed slightly from the 2002Infrastructure Update report as a result of improved data collectionmethodologies.

Average Age and Expected Asset Life of Infrastructure



19

Value of infrastructureThe total replacement value of Edmonton’sinfrastructure is now $19.2 billion, an increaseof more than $1 billion from the amountspecified in the 2002 Infrastructure StrategyUpdate. This growth can be attributed toconstruction of new infrastructure, inflation,improved data collection methodologies andasset management practices.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000 7,669

5,978

1,457

972773 665 530 523

218 181 102 89

Infrastructure Element

$ m

illio

n

Drainage assets constitute the greatestproportion (40 per cent) of the value of theCity of Edmonton’s infrastructure assets. Road Right-of-Way assets account for another 31 per cent of replacement value.

Total 2004 Asset Replacement Value – $19.2 billion Replacement Value by Infrastructure Element

Drainage40%

Road Right-of-Way31%

Parks 8%

Transit Facilities & Equipment

5%

Fleet 4%

Buildings 3%

Traffic Conrol & Streetlighting 3%

Recreation Facilities 3%

Affordable Housing 1%

Waste ManagementFacilities 1%

Technology Equipment 1%


20

State and condition ofinfrastructureSince 2002, the City of Edmonton has used astandardized rating system to determine thestate and condition of its infrastructure. Thisfive-point system (A - Very Good, B - Good, C -Fair, D - Poor and F - Very Poor) is used toassess each aspect of municipal infrastructurein terms of physical condition, functionalityand demand/capacity.

Physical condition refers to the condition ofphysical infrastructure that allows it to meetan intended service level. Functionality refersto the ability of physical infrastructure to meetprogram delivery needs. Demand/capacityrefers to the capacity of physical infrastructureand its ability to meet service needs.

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

$10.2 $7.7 $12.1

$6.3 $10.2 $4.0

$2.7 $1.3 $3.1

PhysicalCondition

Functionality Demand/Capacity

Classification

Assessment Classification

Good & Very Good

Fair

Poor & Very Poor

$bi

llion

53% 40% 63%

33% 53% 21%

14% 7% 16%

While the majority of the City’s assets aregenerally in fair to good condition, someinfrastructure assets require reinvestment.

• Fourteen per cent ($2.7 billion) of assetsare considered poor or very poor withrespect to physical condition.

• Seven per cent ($1.3 billion) ofinfrastructure is rated poor or very poor withrespect to functionality.

• Sixteen per cent ($3.1 billion) ofinfrastructure assets are deemed poor orvery poor for their ability to meetdemand/capacity.

The overall state and condition is a snapshotof existing infrastructure only; the needs forgrowth and new services are not reflected inthis assessment.

These figures indicate the magnitude ofreinvestment required for each assessmentarea. However, figures should not be addedtogether to determine the total reinvestmentrequired to raise infrastructure to acceptablelevels. For example, if an asset is in poorphysical condition, it may or may not have acorrespondingly poor rating in the functionalityand demand/capacity categories. It is possiblethat an investment in one category mayresolve the issues in the other two categorieswithout requiring additional investment.

Overall Status of the City’s Infrastructure



21

Appendix B: Summary of infrastructure inventoryInfrastructure Element Unit of Quantity Average Expected Physical Functionality Demand / Replacement

Measure Age Asset Life Condition Capacity Value(Note 2) (Note 2) (Note 2) ($millions)

A+B / C / D+F A+B / C / D+F A+B / C / D+F(Years) (Years) (%) (%) (%)

DrainageWastewater Treatment Facilities # 1 28 50 100 / 0 / 0 0 / 100 / 0 100 / 0 / 0 $395 Sanitary System km 1,827 28 75 34 / 55 / 11 60 / 40 / 0 61 / 14 / 25 $1,148 Storm System km 2,005 31 75 82 / 16 / 2 50 / 50 / 0 35 / 38 / 27 $3,416 Combined System km 937 56 75 31 / 56 / 13 0 / 100 / 0 17 / 32 / 51 $1,089 Service Connections # 273,214 35 75 67 / 25 / 8 0 / 100 / 0 100 / 0 / 0 $1,621 Drainage Total 35 75 65 / 29 / 6 31 / 69 / 0 53 / 24 / 23 $7,669

Road Right-of-WayRoads km2 / km 43 / 4,395 33 20 41 / 37 / 22 46 / 47 / 7 68 / 19 / 13 $4,867 Sidewalks km 4,334 32 30 59 / 7 / 34 45 / 46 / 9 100 / 0 / 0 $647 Bridges # 142 33 63 52 / 42 / 6 45 / 45 / 10 35 / 38 / 27 $428 Auxiliary Structures varies N/A N/A 17 73 / 1 / 26 N/A N/A $36 Road Right-of-Way Total 35 25 44 / 34 / 22 46 / 47 / 7 69 / 18 / 13 $5,978

ParksHorticulture varies N/A varies 60 11 / 89 / 0 10 / 90 / 0 100 / 0 / 0 $1,016 Access/Circulation varies N/A 22 60 3 / 62 / 35 60 / 0 / 40 60 / 35 / 5 $244 Playgrounds / Water Features # 588 21 20 86 / 5 / 9 79 / 7 / 14 79 / 11 / 10 $115 Sports Fields / Fixtures # 5,176 N/A 18 100 / 0 / 0 57 / 43 / 0 57 / 43 / 0 $50 Protection Elements varies 36,508 N/A 13 0 / 100 / 0 0 / 100 / 0 0 / 89 / 11 $23 Park Furniture # 10,839 27 15 0 / 100 / 0 0 / 100 / 0 0 / 100 / 0 $9 Parks Total 20 55 18 / 75 / 7 25 / 67 / 8 88 / 10 / 2 $1,457

Transit Facilities and EquipmentLRTLRT Major Facilities # 10 19 95 92 / 6 / 2 92 / 8 / 0 100 / 0 / 0 $222 LRT Fleet # 37 23 40 33 / 24 / 43 50 / 40 / 10 0 / 100 / 0 $155 LRT Line km 72 21 58 91 / 7 / 2 79 / 21 / 0 92 / 8 / 0 $379 LRT Equipment varies N/A 22 27 55 / 35 / 10 46 / 37 / 17 89 / 11 / 0 $69 BusBus Major Facilities # 24 15 26 42 / 39 / 19 46 / 15 / 39 58 / 11 / 31 $33 Bus Stops # 12,890 9 16 56 / 24 / 20 48 / 14 / 38 59 / 20 / 21 $16 Bus Communications # 874 10 11 13 / 22 / 65 8 / 92 / 0 100 / 0 / 0 $4 Bus Equipment # 846 16 15 51 / 26 / 23 51 / 2 / 47 25 / 52 / 23 $8 Trolley Electrification rte km 140 21 37 70 / 14 / 16 76 / 12 / 12 100 / 0 / 0 $85 Transit Facilities & Equipment Total 20 55 74 / 14 / 12 73 / 21 / 6 77 / 21 / 2 $972

Notes:1. The average age and expected asset life for the infrastructure totals are rounded off to the nearest 5 years.2. A+B = Very Good and Good

C=FairD+F=Poor and Very Poor


22

Infrastructure Element Unit of Quantity Average Expected Physical Functionality Demand / Replacement Measure Age Asset Life Condition Capacity Value

(Note 2) (Note 2) (Note 2) ($millions)A+B / C / D+F A+B / C / D+F A+B / C / D+F

(Years) (Years) (%) (%) (%)FleetTransit Fleet # 893 15 18 40 / 25 / 35 50 / 0 / 50 16 / 24 / 60 $396 Municipal Department Vehicles # 2,227 7 12 30 / 30 / 40 45 / 40 / 15 80 / 15 / 5 $348 Shop Equipment # 658 18 25 20 / 40 / 40 50 / 40 / 10 20 / 55 / 25 $29 Fleet Total 10 15 35 / 28 / 37 48 / 19 / 33 45 / 21 / 34 $773

BuildingsService Yards / Operations # / ft2 69 / 2,055,769 29 45 55 / 28 / 17 40 / 25 / 35 38 / 26 / 36 $277 Offices # / ft2 9 / 1,319,077 27 45 73 / 26 / 1 97 / 2 / 1 68 / 31 / 1 $190 Emergency Response Facilities # / ft2 32 / 333,349 24 45 78 / 18 / 4 82 / 14 / 4 88 / 12 / 0 $78 Library Buildings - Owned # 8 40 40 87 / 13 / 0 8 / 87 / 5 95 / 0 / 5 $31 Police Buildings # / ft2 13 / 543,486 23 31 30 / 55 / 15 29 / 56 / 15 30 / 55 / 15 $89 Buildings Total 30 45 61 / 29 / 10 58 / 24 / 18 54 / 28 / 18 $665

Traffic Control & Street LightingStreetlighting unit 69,156 22 30 23 / 25 / 52 26 / 23 / 51 79 / 12 / 9 $418 Traffic Signals unit 1,063 17 27 53 / 29 / 19 56 / 23 / 21 35 / 38 / 27 $84 Parking Meters unit 3,372 0 10 100 / 0 / 0 100 / 0 / 0 100 / 0 / 0 $3 Traffic Signs unit 123,475 18 23 22 / 47 / 31 52 / 31 / 17 35 / 38 / 27 $25 Traffic Control & Streetlighting Total 20 30 28 / 27 / 45 33 / 23 / 44 70 / 17 / 13 $530

Recreation FacilitiesCommunity Leisure Centres # / ft2 23 / 974,684 39 40 57 / 31 / 12 15 / 80 / 5 39 / 57 / 4 $190 Attractions # / ft2 5 / 76,330 49 45 0 / 81 / 19 5 / 44 / 51 48 / 52 / 0 $39 Arenas # / ft2 19 / 711,789 32 35 45 / 42 / 13 0 / 74 / 26 47 / 43 / 10 $105 Sports and Fitness Facilities # / ft2 3 / 149,368 20 45 9 / 91 / 0 94 / 6 / 0 94 / 6 / 0 $111 Heritage Facilities # / ft2 6 / 118,186 46 45 91 / 7 / 2 89 / 0 / 11 89 / 0 / 11 $24 Golf Courses # / ft2 10 / 31,553 30 45 48 / 0 / 52 13 / 35 / 52 13 / 35 / 52 $6 Structures # / ft2 58 / 149,049 33 45 51 / 34 / 15 46 / 35 / 19 36 / 31 / 33 $21 Bridges # 75 19 40 74 / 26 / 0 100 / 0 / 0 100 / 0 / 0 $25 Park System (Owned Equipment) # / ha 612 / 4,760 N/A 50 N/A N/A N/A $1 Recreation Facilities Total 35 40 42 / 48 / 10 36 / 51 / 13 58 / 36 / 6 $523

Affordable HousingPartnership Housing # 2,632 23 45 100 / 0 / 0 100 / 0 / 0 100 / 0 / 0 $215 City Owned Housing # 36 51 45 0 / 0 / 100 0 / 0 / 100 0 / 0 / 100 $4 Affordable Housing Total 25 45 98 / 0 / 2 98 / 0 / 2 98 / 0 / 2 $218





23

Infrastructure Element Unit of Quantity Average Expected Physical Functionality Demand / Replacement Measure Age Asset Life Condition Capacity Value

(Note 2) (Note 2) (Note 2) ($millions)A+B / C / D+F A+B / C / D+F A+B / C / D+F

(Years) (Years) (%) (%) (%)Waste Management FacilitiesOperation and Administration Facilities m2 2,570 8 30 85 / 15 / 0 100 / 0 / 0 100 / 0 / 0 $4 Transfer Station and Facilities # / m2 6,200 / 12,350 16 25 100 / 0 / 0 70 / 30 / 0 98 / 0 / 2 $14 Processing Facilities # / m2 7 / 44,550 4 30 100 / 0 / 0 17 / 83 / 0 14 / 86 / 0 $122 Operating Landfills and Appurtenances # / m2 3 / 273 27 35 4 / 96 / 0 4 / 96 / 0 4 / 96 / 0 $29 Other # / m2 1 / 2,600 4 31 99 / 1 / 0 94 / 6 / 0 94 / 6 / 0 $11 Waste Management Facilities Total 10 30 84 / 16 / 0 26 / 74 / 0 26 / 74 / 0 $181

Technology EquipmentServers - Unix # 27 4 5 40 / 0 / 60 40 / 0 / 60 40 / 0 / 60 $3 Servers - Intel # 244 3 3 27 / 17 / 56 27 / 17 / 56 27 / 17 / 56 $4 Data Network # 307 3 5 95 / 0 / 5 95 / 0 / 5 95 / 0 / 5 $3 Data Storage Terabytes 50 2 5 100 / 0 / 0 100 / 0 / 0 100 / 0 / 0 $4 Voice Communications # 13,180 7 6 35 / 0 / 65 35 / 0 / 65 35 / 0 / 65 $8 Business Applications # 147 N/A N/A N/A N/A N/A $31 Backup - Jukeboxes # 2 1 3 100 / 0 / 0 100 / 0 / 0 100 / 0 / 0 $1 Police IT # 184 4 6 63 / 1 / 36 63 / 2 / 35 41 / 25 / 34 $22 Police Communications # 1,419 6 12 97 / 0 / 3 97 / 2 / 1 97 / 3 / 0 $23 Library Network varies N/A N/A N/A 100 / 0 / 0 100 / 0 / 0 100 / 0 / 0 $3 Technology Equipment Total 5 10 74 / 1 / 25 74 / 2 / 24 67 / 9 / 24 $102

OtherLibrary Contents N/A N/A N/A N/A 0 / 100 / 0 0 / 100 / 0 0 / 100 / 0 $14 Library Materials # 1,700,000 N/A N/A 0 / 100 / 0 0 / 0 / 100 0 / 0 / 100 $40 Emergency Response Equipment # 2,786 9 12 44 / 38 / 18 51 / 33 / 16 53 / 22 / 25 $24 Other Police Equipment # 5,562 6 10 57 / 25 / 18 57 / 25 / 18 57 / 25 / 18 $12 Other Total 10 10 19 / 74 / 7 21 / 28 / 51 22 / 24 / 54 $89

TOTAL 30 50 53 / 33 / 14 40 / 53 / 7 63 / 21 / 16 $19,157




24

Appendix C: Summary of infrastructure investment needs (2005-14 Long Range Financial Plan)

The 2005-14 Long Range Financial Plan (LRFP)requires almost $7.2 billion over the next tenyears to accommodate demand for growth,rehabilitation and other projects. The fundedportion of the LRFP amounts to $3.0 billion.The unfunded portion of the LRFP, or theinfrastructure gap, has risen to $4.1 billionfrom the 2003-12 LRFP figure of $3.2 billion.That $0.9 billion increase represents a 28 percent increase in the size of the gap.

A major contributor to the infrastructure gap istransportation related, such as the South LightRail Transit (LRT) expansion, High SpeedTransit and additional rehabilitation projects.

The infrastructure gap continues to growbecause of increasing demands for rehabilitationand growth projects, a backlog of unfundedprojects, escalating construction costs inEdmonton's booming economy, and morestringent environmental requirements.

That the gap continues to grow is of concern.While considerable efforts have been made toimprove the City’s infrastructure management,the fact is that more money is required toaddress the demands of this growing city.

0

100

200

300

400

500

600

700

800

Tota

l C

apital

Exp

endi

ture

s ($

mill

ions

)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Year

Funded - $3.0 billion

Unfunded - $4.1 billion

2005-2014 Long Range Financial Plan



25

A majority (59 per cent) of the funded LRFP consists of rehabilitationcosts of $1.78 billion. Approximately $0.91 billion (30 per cent) hasbeen allocated to growth projects and the remaining $0.33 billion (11 per cent) to other initiatives (Economic Development, Regional Co-operation and Planning, Services to People and Leadership,Organizational Effectiveness).

The following pie chart indicates that thefunded projects are primarily in the roads anddrainage areas.

2005 - 2014 Long Range Financial Plan — Funded($ billion)

2005-2014 Long Range Financial Plan — Funded byProgram ($ billion)

11%$0.33 billion

59%$1.78 billion

30%$0.91 billion

Total Funded LRFP: $3.0 billion

Existing Needs (Rehabilitation)

Growth Requirements

Other

Library, EDE, P&D, ERD,City Clerk, Soc/Rec/Cult

$0.083%

Roads$0.9532%

Drainage$0.5819%

Mobile Equipment$0.4515%

Land & Bldgs$0.3311%

Transit$0.23

7%

Corporate$0.10

3%

Waste Mgmt$0.09

3%

Parks$0.08

3%

Recreation$0.06

2%

Police$0.06

2%

Notes:EDE - Economic Development EdmontonP & D - Planning & DevelopmentERD - Emergency Response Department


26

Conversely, 61 per cent or $2.53 billion of unfunded projects areassigned to growth projects, which indicate the City has not been ableto keep up with the pace of development. About $1.53 billion (37 percent) of unfunded projects are assigned to existing infrastructure needs(rehabilitation). Another $0.08 billion (2 per cent) are allocated to otherinitiatives.

The following pie chart indicates that roadsand transit comprise the majority of theunfunded needs.

2005 - 2014 Long Range Financial Plan — Unfunded($ billion)

2005-2014 Long Range Financial Plan — Unfunded by Program ($ billion)

2%$0.08 billion

Library, Corporate, EDE, P&D, ERD,City Clerk, Waste Mgmt

Soc/Rec/Cult$0.14

3%Roads$1.6038%

Transit$1.4034%

Recreation$0.31

8%

Land & Bldgs$0.20

5%

Parks$0.16

4%

Police$0.14

3%

Drainage$0.13

3%

MES$0.07

2%

37%$1.53 billion

61%$2.53 billion

Total Unfunded LRFP: $4.1 billion

Existing Needs (Deferred Rehabilitation)

Growth Requirements

Other

Notes:MES - Mobile Equipment ServicesEDE - Economic Development EdmontonP & D - Planning & DevelopmentERD - Emergency Response Department



27

Appendix D: Sources

Alberta, the Government of. Budget 2004: OnRoute, On Course – Heading Toward Alberta’sSecond Century. Strategic Business Plan.March 24, 2004. (http://www.finance.gov.ab.ca/publications/budget/budget2004/govbp.pdf)

Alberta, the Government of. Alberta MunicipalAffairs Business Plan 2004-07. March 3,2004. (http://www.finance.gov.ab.ca/publications/budget/budget2004/munic.pdf)

AUMA Board. President’s Summit on MunicipalFinance: Final Report. Alberta: AUMA, June,2003. (http://www.munilink.net/policy/Reports/110503ProposedInit.pdf)

AUMA Board. Proposed Initiatives Report:Submission for the Alberta Government’s2004 Budget and Business Plans. Alberta:AUMA, October, 2003. (http://www.munilink.net/policy/Reports/110503ProposedInit.pdf)

Clarkson, Adrienne. “Speech from the Throne.”Government of Canada. Ottawa, Ontario.October 5, 2004. (http://www.pm.gc.ca/eng/sft-ddt.asp)

Conference Board of Canada, The. “Canada2010 Challenges and Choices at Home andAbroad.” Performance and Potential 2002-03Key Findings. Canada: The Conference Boardof Canada. 2002.

Dowdall, Brent. “News Release: 02-39.Economic Outlook is Positive for all CanadianProvinces.” The Conference Board of CanadaWebsite. October 29, 2002.(www.conferenceboard.ca/press/2002/prov-outlook-aut.asp)

Edmonton, the City of. Building Edmonton’sNext Century: New Deal Investment andPartnership Strategy. Edmonton, Alberta: The City of Edmonton, December 2004.

Edmonton, the City of. The City ForecastCommittee, Planning and Development.Edmonton Socio-Economic Outlook 2004 - 2009.Edmonton, Alberta: The City of Edmonton,October 2004.

Edmonton, the City of. Office of theEnvironment. Environmental Strategic Plan1999: Policy Document. Edmonton, Alberta:The City of Edmonton, July 1999.

Edmonton, the City of. Office of Infrastructure.Update of City of Edmonton InfrastructureInventory and Investment Needs. Edmonton,Alberta: The City of Edmonton, September2000.

Edmonton, the City of. Office of Infrastructure.2002 Update: Infrastructure Strategy.Edmonton, Alberta: The City of Edmonton,September 2002.

Edmonton, the City of. Proposed 2003 BudgetIn Brief. Edmonton, Alberta: The City ofEdmonton, November, 2002.

Edmonton, the City of. Planning andDevelopment Department. Smart Choices fordeveloping our Community. A Catalogue ofIdeas… to invite community discussion andcomments. Edmonton, Alberta: The City ofEdmonton, June 2003. (www.edmonton.ca/smartchoices)

Edmonton, the City of. Office of Infrastructure.Edmonton’s Infrastructure Strategy Overview.Edmonton. Alberta: The City of Edmonton,August 2003.

Edmonton, the City of. Infrastructure TechnicalAdvisory Committee. Four Pillars of UrbanSustainability – Urban Form Submission.Edmonton, Alberta: The City of Edmonton, 2004.

Gibbins, Roger, Berdahl, Loleen, Vander Ploeg,Casey. Foundations for Prosperity: Creating aSustainable Municipal-Provincial Partnership toMeet the Infrastructure Challenge of Alberta’s2nd Century. Calgary, Alberta: Canada WestFoundation. September 2004. (www.cwf.ca)

Godfrey, John. “Infrastructure Renewal inCanadian Cities: The Role of the FederalGovernment.” Notes for an address to theConference on the Future of Canada'sInfrastructure. Toronto, Ontario. September30, 2004. (www.infrastructure.gc.ca/speeches-discours/20040930_e.shtml)

Martin, Paul. “Address by the Prime Ministerin Reply to the Speech from the Throne toOpen the First Session of the Thirty EighthParliament of Canada.” Government ofCanada. Ottawa, Ontario. October 5, 2004.(http://www.pm.gc.ca/eng/sft-ddt.asp?id=2)

Ministry of Public Infrastructure Renewal.Building a Better Tomorrow: An InfrastructurePlanning, Financing and ProcurementFramework for Ontario’s Public Sector.Ontario: Queen’s Printer for Ontario, 2004.(www.pir.gov.on.ca)


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National Guide to Sustainable MunicipalInfrastructure. InfraGuide. Innovations andBest Practices. Decision Making and InvestmentPlanning. Managing Infrastructure Assets.March 2004. (http://www.infraguide.gc.ca/docs/DMIP07-ManagingInfrastructureAssets.pdf)

Strategies for Urban Sustainability Conference,Edmonton, Alberta, September 9 – 10, 2003.Conference Report. November, 2003.

TD Bank Financial Group. “A Choice BetweenInvesting in Canada’s Cities or Disinvesting inCanada’s Future.” TD Economics SpecialReport. April 22, 2002. (www.td.com/economics)

TD Bank Financial Group. “Don’t Believe Talkof Deflation.” TD Economics Topic Paper.October 17, 2002. (www.td.com/economics)

TD Bank Financial Group. “TD Economics’Federal Fiscal Outlook: Pursuing Activist Policyon a Tight Budget.” TD Economics SpecialReport. September 17, 2002. (www.td.com/economics)

TD Bank Financial Group. “The Calgary-Edmonton Corridor: Take Action Now to EnsureTiger’s Roar Doesn’t Fade.” TD EconomicsSpecial Report. April 22, 2003. (www.td.com/economics)

TD Bank Financial Group. “Top Ten EconomicTrends for the Fall of 2002.” TD EconomicsSpecial Report. August, 2002. (www.td.com/economics)

TD Bank Financial Group. Mind the Gap:Finding the Money to Upgrade Canada’s AgingPublic Infrastructure. May 20, 2004.(www.td.com/economics)

Tsounis, Paul. Triple Bottom Line Accounting.Edmonton, Alberta: The City of Edmonton,Planning and Development. April, 2004.

Vander Ploeg, Casey. A Capital Question:Infrastructure in Western Canada’s Big Six.Calgary, Alberta: Canada West Foundation,2003. (www.cwf.ca)

Vander Ploeg, Casey. Big City RevenueSources: A Canada-U.S. Comparison ofMunicipal Tax Tools and Revenue Levers.Calgary, Alberta: Canada West Foundation,2002. (www.cwf.ca)

Vander Ploeg, Casey. Dollars and Sense: BigCity Finances in the West, 1990-2000.Calgary, Alberta: Canada West Foundation.2001. (www.cwf.ca)

Vander Ploeg, Casey. Framing a Fiscal Fix-Up:Options for Strengthening the Finances ofWestern Canada’s Big Cities. Calgary, Alberta:Canada West Foundation, 2002. (www.cwf.ca)

Vander Ploeg, Casey. No Time to be Timid:Addressing Infrastructure Deficits in theWestern Big Six. Calgary, Alberta: CanadaWest Foundation, 2004. (www.cwf.ca)

Vander Ploeg, Casey. Straight Talk: PropertyTaxes in Western Canada’s Big Six. Calgary,Alberta: Canada West Foundation, 2004.(www.cwf.ca)

For more information contact: City of Edmonton

Office of Infrastructure Phone: (780) 496-2894

www.edmonton.ca/infrastructure

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