The issues and challenges surrounding municipal funding have been gaining greater awareness and attention as it becomes clear that, although cities are the economic engines of the country, they do not have the political and financial tools they need to meet the basic requirements of growth. Recent studies by the TD Bank Financial Group and the Federation of Canadian Municipalities have examined this issue and identified the need for other levels of government to change the funding arrangements with municipalities as well as the need for local governments to find innovative strategies to maximize the resources they have.
The City of Ottawa's 2002 Budget process identified pressures and challenges facing the City that remain to be solved over time. These pressures and challenges were created in part from the realignment of responsibilities from the federal and provincial governments to municipalities without also passing on the stable, base-line capital and operating funding for these programs, and the restrictions placed on our ability to fund the requirements of growth and the increased demand for service.
The City is not waiting for the other levels of government to institute a fairer funding model, but will proceed to look at innovative approaches to provide solutions where it can. As the City moves forward in the development of a Long Range Financial Plan, one tool that will certainly be used is public-private partnerships (P3).
Public-private partnerships are arrangements between government and private sector bodies to provide infrastructure, community facilities and related services in a manner that benefits the government, the private sector partner and residents. P3s serve as a vehicle for the injection of private sector financing while allowing governments to maintain their fiscal targets and avoid taking on additional debt.
This report reflects the best experiences and practices of those currently engaged in P3s. If the P3 concept is approved, City staff will establish a Strategic Delivery Unit (SDU) to centralize specialized expertise in public-private partnerships. This unit will create a flexible delivery framework that will enable the City to achieve its objectives and address emerging innovative projects.
The SDU will examine ways to optimize current resources and take advantage of public and private sector best practices in the development, construction, and operation of some of the City's infrastructure projects (like the east and west ice pads). It will examine where the City might leverage capital funding in order to implement projects earlier and in a more cost effective manner. It will ensure P3s operate with a fair and transparent process, which achieves the best value for the municipal tax dollar.