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Report to Thompson City Council from the Finance & Administration Committee on the Municipal Revenue Act
April 7, 2008
Background
Our responsibilities as a Council of the City of Thompson include meeting the current needs of the community through the services we provide, and preparing for the provision of those services in the future.
When planning the priorities for each year through the budget process, Council and administration make trade-offs between the operating and capital budgets. The costs of wages, energy costs, and materials in the operating budget compete for resources (money) with equipment purchases, building renovations, and replacement of infrastructure such as water & sewer pipes, roads, sidewalks, and buildings in the capital budget. As a general rule, the more immediate needs in the operating budget have been met, while capital expenses such as replacing equipment, upgrading buildings have been deferred.
Ironically, as a result of deferring capital projects, it is widely understood that the cost of providing services has increased. Keeping equipment too long means it costs more every year to operate and maintain. The newest grader the city owns is 15 years old. The older your roads, and water & sewer pipes, the more time and money you need to spend on repairs.
There is a growing realization that delaying significant capital investment in water & sewer pipes, road & sidewalks, will result in significantly higher operating costs in the future. The cost of necessary replacement or upgrade of municipal infrastructure such as roads & sidewalks, water & sewer pipes, water and sewer treatment plants, transit, and community facilities is generally referred to as the Infrastructure Deficit. A recent report by the Federation of Canadian Municipalities (FCM) pointed out that most of Canada’s municipal infrastructure was constructed between 1950 and 1970, and is in need of replacement. Since Thompson was largely built in the 1960’s, virtually all of our infrastructure was built in this period. In addition, the speed of construction, and uncertainty about the longevity of the community at the time, may have contributed to the quality of infrastructure initially installed.
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