Balancing investment choices between infrastructure renewal and growth presents a significant challenge, especially when our city grows and ages at the same time. The gap between what is needed and what the City can afford continues to grow; therefore, obtaining and prioritizing funding remains a key concern.
The City's infrastructure is aging. The 10-year Capital Investment Agenda (2012-21) reports that the average age of the City's infrastructure assets is 30 years, and the average expected life of all City assets is 50 years. This presents several challenges:
- Aging Neighbourhoods – mature neighbourhoods are aging and will require significant reinvestment. A Neighbourhood Renewal Program has been implemented to balance the need to rebuild in some neighbourhoods with a preventive maintenance approach in others.
- Aging Infrastructure – increasing maintenance and rehabilitation is needed to ensure that aging infrastructure is performing well and continuing to meet the needs of citizens. Tough decisions have to be made to ensure that investment is targeted to where it is needed most. Edmonton's Risk-based Infrastructure Management System is used to assist in ranking the rehabilitation needs of the City's assets, and to optimize the allocation of renewal funds across the varied infrastructure to ensure long-term value.
- Renewal Targets – an analysis completed in 2011 indicated that an average annual reinvestment of $400 million-$450 million (without inflation) would be needed over a 10-year period to achieve a reasonable state of repair of Edmonton’s infrastructure. Targeting renewal funding based on an amount that is averaged over several years does not allow enough funding to be allocated to all infrastructure areas that need reinvestment. For example, one large project may take up a significant portion of the annual allocation, which can have adverse affects on other infrastructure also requiring reinvestment at the same time. This issue needs to be factored into recommended funding levels, with variations in funding levels adjusted between the years.
Edmonton is experiencing rapid growth, which is straining the city’s existing infrastructure and increasing the demand for new infrastructure to meet citizen's needs. The primary challenges for growth are:
- Limited growth money – once funding for previously committed projects, allocation to renewal needs and constrained funding (funding that must be used for a specific purpose and cannot be reallocated) is considered, it will not be possible to meet identified growth needs and continue to work toward achieving a reasonable state of repair of existing assets, without additional funding sources.
- Operating costs associated with new infrastructure can be as much as, or more than the initial capital investment over the life of the asset. Operating costs are ongoing and need to be considered as part of the decision to fund a growth project. The City's Integrated Infrastructure Management Planning Framework helps decision makers determine how growth can be achieved in the most effective and sustainable way, taking future operating costs (among other factors) into consideration.
- Rising costs – more stringent environmental regulations demand larger investments to meet building codes and comply with regulations. Edmonton’s strong economy is also increasing construction costs.