Council votes to fund bridge work from local and regional street reserves

Fundamental change to reserves built on tax hikes dedicated to repair streets

Winnipeg City Council voted March 20 to allow bridge work to be funded out of the local and regional street renewal reserves.

That changes the premise upon which the annual, 2% dedicated tax hikes for street repairs were originally implemented. The 2% annual tax hike was initiated in 2013 and 2014 to build reserves to bolster annual budgets for repairing Winnipeg’s crumbling streets.

The March 20 vote, where Budget 2019 was passed, was supported by 12 members of council; Councillors Kevin Klein, Janice Lukes, Jason Schreyer and Shawn Nason, all of whom voted against Budget 2019, also opposed the motion to change to rules for reserve allocations.

“This is a fundamental change to the deal that Winnipeg City Council made with taxpayers in 2013 and 2014 when the local and then the regional reserves were set up,” MHCA President Chris Lorenc said. “Those reserves were intended to be dedicated to street repair – as part of a multi-year strategy to chip away at the infrastructure gap. Winnipeggers were told the 2% annual tax hikes would go expressly to repairing streets.

“Bridge repair, rehabilitation and replacement projects are monumentally expensive – any one year of these projects could easily sap the annual local or regional street reserve of all funding.”

Each year, the dedicated tax hike raises about $11 million in revenue, and, until now, those funds have gone directly to street repairs, augmenting other funding sources. With bridge work now eligible to draw on the reserves, City Council should explain to Winnipeggers how street repair will be sufficiently funded.

In 2017, for example, bridge work alone cost more than $18 million; this year, council has budgeted $8.1 million for bridge work. Until now, the funding for repair, rehabilitation and construction of bridges has flowed through a separate allocation, under Waterway Crossings and Grade Separations, in Public Works capital plans.

Bridges received some funding in past years from the now-expired Manitoba Roads agreement. The province has not renewed that agreement, which takes $174 million out of Winnipeg’s street works funding forecasts, from 2019 to 2024.

The decision now to slide bridge funding into the local and regional street reserves undermines the city’s multi-year plan to address the $2 billion worth of street work required, Lorenc stressed.

“This decision can substantially impair the work that all Winnipeggers know has to get done on their streets – it’s spring, everyone is playing dodge-the-pothole. It takes years of erosion to the subgrade to cause sinkholes like the one that swallowed the handi-van this month.”

Council did not have a report on the financial implications to the annual streets work budgets, nor how the change to reserve rules would change the plan crafted in 2013-14 for chipping away at the infrastructure deficit.

“Winnipeggers need transparency, they deserve an explanation for this very significant change to the deal made for the annual 2% tax hike,” Lorenc said. “The $11 million raised each year can get entirely consumed by bridge work alone.”