It's prudent to set aside money to rebuild and prepare for future floods

Post Date: Saturday, July 27, 2013
Naheed Nenshi - formalI try to write a monthly column in the Calgary Herald, but our lives have been very busy over the past while. Here is the full text of my latest column that ran today: 

What a month it has been. It’s hard to believe that it was five weeks ago today that the rivers crested. In some ways it feels like yesterday, but we’ve been through so much happened so quickly that it almost seems we’ve forgotten the scope of the devastation.

In the last month, I’ve seen things I never thought I would see: the Bow and Elbow Rivers, part of the bloodstream of every Calgarian, running higher and faster and angrier than ever before, entire communities under water, and neighbours who lost nearly everything they owned.

But I’ve also seen things that filled my heart with gratitude. Like public servants, from first responders to garbage truck drivers, working so hard to help the afflicted. I’ve never been more proud of my 20,000 City of Calgary colleagues, as well as those who work for the provincial and federal governments.

And, of course, the enduring image for me of the floods - a simple one, repeated so many thousands of times: the picture of that Calgarian, covered in mud and mosquito bites, marked with cuts and scratches and bruises, working to save the home of someone she doesn’t even know.

It’s an extraordinary story, and it’s something none of us will ever forget.

But now that the water has receded, we need to think about how to recover, rebuild, and prevent future damage.

A very early estimate of City public infrastructure lost is $250 million in washed-out pathways, damaged public buildings, and broken bridges, amongst many others. The Zoo alone may have incurred damage over $60 million.

We have no choice but to fix this vital infrastructure, and while insurance will cover some of the damage, the rest will have to be borne by all of us as taxpayers.

The provincial and federal governments have made significant commitments to help our city recover, but they won’t end up paying for everything. This isn’t a knock on them; they’ll try hard but there will be expenses that they can’t or won’t cover.

An article in Wednesday’s Herald confirms this: in post-disaster Slave Lake and Medicine Hat, extraordinary expenses ate up huge chunks of those cities’ budgets, and both cities strongly recommend that Calgary set aside some money to cover these.

The province has been pretty clear on this as well. A spokesperson for Alberta Municipal Affairs suggests that money will only be available to restore things to exactly how they were before, not, for example, to harden the assets against future natural disaster by using more durable materials.

Indeed, I had a conversation with one of the “flood ministers” this week, who also confirmed that it would be prudent to set aside some money for these purpose.

Furthermore, provincial and federal money doesn’t appear from thin air: it comes from taxes that Calgarians pay. In fact, since both other governments are currently running deficits (unlike the City, which balances its books every year), any money they spend on this comes from borrowing, which has to be paid back with interest from--you guessed it--taxes. 

Some people have asked, “Doesn’t the City have cash in reserve?” Yes, we do, and some of it--about 11 per cent of our annual budget--can be used for emergency repairs. In fact, it has been used for that purpose in the interim (fixing the LRT alone was likely upwards of $10 million).

But we can’t deplete all of our cash reserves without a plan for filling them up again. We insist that community associations we fund, for example, always have 10 per cent cash on hand, and our policy is to have up to 15 per cent ourselves. So, if we use up our so-called “rainy day fund” for flood repairs, it will have to be replenished, and at this point the only source for that replenishment is – you guessed it – taxes.

Of course, we need to run The City as efficiently as possible, and we’ve made good headway by trimming the city budget by more than $100 million during the last three-year budget and by starting zero-based budgeting. But, to be frank, the savings we will continue to find won’t cover the costs we’re expecting to bear for this recovery.

So, do we use the famous $52 million on hand now, or future increases in taxes? I prefer the transparency of setting aside the money we have now for this specific purpose, rather than be put in the position of having to increase taxes later to replenish our reserves. Our property taxes are the lowest of any major city in Canada, and they will stay the lowest regardless of this decision.

My favourite--and the funniest--line this week was from someone arguing that Calgarians should duck responsibility for paying to fix public infrastructure: “the citizens of Calgary did not create the flood devastation.” True. But, sadly, Mother Nature and the Bow and Elbow Rivers aren’t willing to pay to fix it. 

That’s our job as citizens.


You may also find the article on the Calgary Herald website.