By Kevin Werner, News Staff
Hamilton is facing the twin crises of record high debt and an insolvable infrastructure deficit that could eventually bankrupt the municipality, say politicians and officials.
“This is the motherlode,” said City Manager Chris Murray Manager. “Our situation is getting worse.”
The city’s debt, which includes tax and rate supported, and development charges, is about $294 million in 2013. That figure will balloon to $809 million in 2014, and exceed $1 billion in 2015 and 2016. In 2017 the debt is projected to drop slightly to $985 million.
“Staff is very conscious of that debt,” said Mike Zegarac, acting corporate finance general manager, who kicked off councillors’ 2014 budget deliberations Sept. 13.
Hamilton’s collective reserve funds are declining as well, dropping from $824 million to about $704 million.
Zegarac said the credit rating agency, Standard and Poor’s, has identified Hamilton as having limited flexibility to relieve that debt problem. With a lower average community income, and limited means to raise revenue, the city is caught in a box.
Adding to the city’s financial woes is an infrastructure deficit of about $195 million that shows no signs of dissipating.
Standard and Poor’s has also stated that Hamilton’s infrastructure backlog can’t be deferred further.
Stoney Creekcouncillor Brad Clark said both the federal and provincial governments need to help Hamilton, and other older municipalities. Without their financial assistance, Hamilton can’t escape its looming financial crisis, say politicians.
“There is no way out for Hamilton alone,” said Clark. “It is 100 per cent impossible. Twenty years from now we will have municipalities going bankrupt, not able to pay their bills. We are doing our jobs.”
The federal government has already introduced this year $14 billion over 10 years for infrastructure projects. For 2014-15, $210 million will be for municipalities.
But Clark said that is a pittance for municipalities’’ need.
“That is not even scratching the coin,” he said. “It is laughable. The city is being squeezed. Where else do we go? (Senior governments) are not coming to the table.”
City staff will be providing a new government relations strategy to help Hamilton lobby on behalf of the city for the needed resources.
“We need a government relations strategy that is tailored to our needs,” saidMurray.
Murraysaid it isn’t about providing charity toHamilton. It is about helping the city fix what it owns, he says.
“This isn’t a woe is me (situation)” he said. “It’s good investment.”