FACTS ON INFRASTRUCTURE FUNDING: A LETTER TO THE CITIZENS OF SASKATOON

For Release: June 13, 2014

Since the federal and provincial governments announced very generous contributions for two much-needed bridges in our city, you, the citizens of Saskatoon, may have been hearing a lot of confusing information about how taxpayer funds will be used.

It has become apparent I need to set the record straight.

Of course I understand and respect there will always be a variety of opinions about City operations and programs, however, there is only one set of facts.

P3 Funding

There are many benefits to a Public Private Partnership or P3 funding model. It allows municipalities to deliver much needed civic facilities or other infrastructure much faster; there is less financial risk to a city; and with the private sector taking the lead, P3 projects often result in innovations that save taxpayers money.

Further, a P3 model also ensures taxpayers receive a fully maintained asset over the life-span of the asset; that means there is no temptation for cities to put-off maintenance costs. Without this arrangement in place, taxpayers could be on the hook for even greater – and most surely – higher costs to fix-up critical infrastructure the public relies on.

North Commuter Parkway/Traffic Bridge Replacement Project

As a P3, the benefits of creating a new bridge and restoring an historic river crossing in our city for all vehicles, bicycles and pedestrians are many as well.

The bridges will help reduce congestion – and we’ve already seen evidence the Circle Drive South Bridge has done this with heavy truck traffic downtown. Less congestion means greater mobility for private vehicles and for Transit making a Bus Rapid Transit plan even more viable.

Finally, the North Commuter Parkway Bridge will not be a toll bridge.

City Finances

The City is one of a small number of municipalities that has and maintains a AAA credit rating; this is because we spend your tax dollars very carefully. As a result, we are able to borrow money for major infrastructure projects our growing community needs at lower rates. This also saves you money.

Long term debt financing is a valid and prudent means to acquire and fund major infrastructure.

To be able to pay with cash on hand is not always practical, nor realistic. Borrowing for major infrastructure is much the same as a home purchase; as consumers many of us rarely have the cash to buy a home outright: instead, we take out a mortgage -- borrow the money, buy the property and pay it back to the lender. For certain, there is interest paid to the lender, but it is also the cost of providing ourselves and families with a place to live.

This is the same case for Saskatoon. Our growing community needs both new and replacement infrastructure and sometimes we borrow to build it. If we don’t provide the infrastructure, the community remains at a standstill, the economy suffers, and the city becomes a less attractive place to live, work and play.

We are in good stead as a City with a solid vision and strategic plan set by City Council and a new Growing Forward! initiative to plan and build a sustainable Saskatoon. Our finances are strong and we will continue to move ahead and progress as a community.

Kind regards,

Murray Totland

City Manager

For more City of Saskatoon Public Service Announcements, News Releases, Traffic Detours and Service Alerts, visit www.saskatoon.ca or connect with the City of Saskatoon on Twitter and Facebook.