OLG Revenue to Help Township Address Aging Infrastructure


Last week, the township received a third-quarter (October 1, 2018 to December 31, 2018) non-tax gaming revenue payment of $89,963 from Ontario Lottery and Gaming Corporation (OLG) for hosting Shorelines Slots at Kawartha Downs.  This payment represents revenue earned during the first two weeks of October and during the last few days of 2018 earned after the gaming site re-opened on December 19, 2018.

Revenue from the operator will continue to flow to the township on a reduced level because of competition from Shoreline’s new Peterborough location, a reduction in gaming machines from 450 to 150 and a reduction in hours of operation to 10 hours a day.  All revenue from this source is directed to the township’s Asset Replacement Reserves.  In her Draft Budget, Cavan Monaghan Director of Finance Kimberley Pope has projected a $750,000 contribution from this source for 2019.

Ms. Pope has been a champion of increasing contributions to these reserves for several years, and for good reason.  New legislation will soon force municipal governments to face their individual infrastructure challenges, and will result in significant pressure on municipal budgets.

For many years, there has been a growing concern at all levels of government about the sustainability of the country’s aging infrastructure.   In 2012, less than 40% of municipalities had established any plan to manage their assets, which include roads, bridges, plants and buildings under their ownership.  In response, the province passed legislation to force the lower tiers to address their infrastructure gap by establishing effective plans to address their own assets.

Recognizing the magnitude of the challenge, the legislation incorporates a six year phase-in period, with the first “soft” deadline this summer.  By Canada Day, municipalities must outline their commitments to establish “best practices and continuous improvements” in the asset management.  By July 2021, municipalities must produce an inventory of their core assets and outline the services provided and the costs of delivering those services.  A strategic plan must also be in place, illustrating an alignment with land-use planning, climate change mitigation and its impact their budgets.  By 2023, asset management plans must include all assets, and the following year they must include a financial strategy to maintain the assets, which will be reviewed every five years.

Infrastructure updates are expensive, and municipalities will be hard-pressed to fund necessary projects from their own revenues.  Support will be available from upper tiers of government based on a funding formula to ensure fair distribution.  Eligibility for support will also hinge on these plans and municipalities with well-conceived asset management strategies will be rewarded with project funding.

Developing a thorough asset management plan will force the township to examine the financial implications of their holdings very closely, and some existing assets might not pass the scrutiny.  Higher reserve balances and thoughtful planning will alleviate the pressure this process will certainly create as they respond to the challenge of our aging infrastructure.   KG

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