Aerotropolis

Council's Commitment to Budget Process Proves Short-Lived

By Ryan McGreal
Published June 26, 2009

this blog entry has been updated

Earlier this week, Hamilton City Council voted unanimously to support the city's Cycling Master Plan, but deferred any actual commitment of funds to the 2010 budget process - even though they had already committed to funding the plan when they approved the 2007 Transportation Master Plan.

Now Council has voted to spend $3.2 million, almost three times as much as what staff recommended in annual spending on the cycling plan, to buy land on Airport Road in Mount Hope so Hamilton International Airport can expand its second runway.

According to Richard Koroscil, the CEO of TradePort, the second runway will improve the airport's reliability in inclement weather and allow TradePort to market the airport facilities more widely.

This money is in addition to $3 million the city is already spending on 20 hectares for other airport infrastructure, including new hangars and a fuel farm; and a further $3 million to buy land on Glancaster Rd for the planned Airport Employment Growth District (AEGD) - even though the Province disputes the city's assumptions in defending the plan.

So much for the budget process, which is apparently useful for deferring commitments to investing in livability but doesn't get in the way of financing our hermetically sealed obsession: an energy-intensive transportation node with poor future prospects.


Update This blog entry originally read that Council voted to buy the land so TradePort can build a second runway; in fact, the money is so that TradePort can expand its second runway. You can jump to the changed paragraph. Thanks to RTH reader "realitycheck" for pointing out the error in the comments.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan writes a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal. Recently, he took the plunge and finally joined Facebook.

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By nobrainer (registered) | Posted June 26, 2009 at 11:15:00

Surprise level: 0.00% surprised. :P

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By jason (registered) | Posted June 26, 2009 at 11:25:41

yawn. another day in the Hammer.

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By C. Erl (registered) - website | Posted June 26, 2009 at 11:33:33

Yay! Another runway for...an airport no one uses? Oh council, tisk tisk.

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By nobrainer (registered) | Posted June 26, 2009 at 11:44:13

No, see, if we got a second runway people would start using the first one because they'd know they could use the second one if the first one was covered in ice, it all makes sense really.

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By JM (registered) | Posted June 26, 2009 at 11:44:48

"Yay! Another runway for...an airport no one uses? Oh council, tisk tisk."

...maybe it will work like adding an extra lane to an expressway? produce more traffic? lol...

not likely

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By Frank (registered) | Posted June 26, 2009 at 11:59:27

I'm working on that fuel thing as we speak lol.

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By Capitalist (anonymous) | Posted June 26, 2009 at 12:03:24

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By arienc (registered) | Posted June 26, 2009 at 12:07:05

Figures Capitalist would be for a decision that gives away taxpayers' money to subsidize private interests. If the public benefits, council and Capitalist aren't interested.

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By Really? (registered) | Posted June 26, 2009 at 12:49:20

Maybe everyone should start Cycling on the runways then. It's clear the 2nd runway wont be used since the 1st runway is rarely used.

Way to prioritise, Council!

Props to Clrs Bratina, McHattie, Collins, Morelli, and to an extent, Merulla on their 'Nay' votes.

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By mikeonthemountain (registered) | Posted June 26, 2009 at 12:51:56

I hope we are invaded by the Dutch. Not just because of the bike lanes. The quality of food would dramatically improve as well.

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By mikeonthemountain (registered) | Posted June 26, 2009 at 12:52:53

I meant to add I was half joking but that was stripped from the bottom of the message :)

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By synxer (registered) | Posted June 26, 2009 at 13:11:37

Not sure why council always picks the "attract" business action-metaphors over the "keep" business ones.

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By A Smith (anonymous) | Posted June 26, 2009 at 13:14:05

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By A Smith (anonymous) | Posted June 26, 2009 at 13:24:04

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By nobrainer (registered) | Posted June 26, 2009 at 13:24:31

A Smith wrote:

The thieving commies lose once again. So sad.

QFT. A Smith expresses support for public expenditure to subsidize private wealth in aviation. Your hypocrisy is unmasked and any lingering credibility you might have had for sheer monotony of opinion is gone.

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By A Smith (anonymous) | Posted June 26, 2009 at 13:32:44

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By grassroots are the way forward (registered) | Posted June 26, 2009 at 13:49:20

Where are all these great jobs up there? Most of the work today is contracted out to the temp companies, where the worker is lucky to make $10.00 per hour, no benefits, pensions, forget that, and no real protection under the law.

Yes, how is this lifting those that struggle in poverty. What I do not understand is how the city itself lists temp agenices as viable places to get work, meanwhile, the rights of workers, especially those making the transition from social assistance are ignored. How many workers have been denied stat holiday pay or even overtime, how about the lack of protection under Occupational Health and Safety or even Employment Standards. How about these transportation costs they are charging, sometimes up to twenty dollars a day?

The bureaucracy they have created to help those find work does little to ensure your rights. And given the recent posting for an employer councillor for the city for those on Ontario Works, I find it very unjust, that we have people making in excess of $35.00 per hour, have benefits and pensions, to shuffle pieces of paper and are forcing people into either very precarious work or volunteer positions, which does nothing to lift them from poverty or to add to the betterment of our community as a whole. The rule of Ontario Works, one must attend all the workshops assigned to them, otherwise they are cut off, yet we have one these employment councillors, a big wig, assigning this person to 2 workshops at the same time, I wonder will my member be cut off because of the ineptness of a city worker? One cannot be at two places at the same time.

Word on the streets about the situations growing at the foodbanks has not been reported accurately in our papers. One gets the sense that soon, security will be in place. This is just not affecting those on social assistance but also those families on EI benefits. Many are being denied access to food and the deception or inaccuracy by the corporate media is astounding.

As a fellow member of one the groups in an involved with, who was just awarded for their work in the community, went to a local foodbank, where they have now put in place MEANS testing. This person was called a liar when they reported the illiteracy rate in Hamilton and that many could not even read or understand their forms. They brought in one bill that the corporation bills quarterly, yet we have staff at a local foodbank demanding a monthly bill, when there is not one to be had. This person, even though they have worked hard, have been recognized for their work, was treated like dirt by a institution that claims they are helping people, when the truth of the situation is far from the public relations blast that is currently going on.

Very sad indeed.

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By realitycheck (anonymous) | Posted June 26, 2009 at 13:50:29

This is not money to build a second runway. The second runway already exists. This is a land acquisition transaction so to allow expansion of the existing second runway at the airport, not for construction of a new runway. Perhaps, for the sake of journalistic accuracy, the second paragraph can be corrected to reflect this fact.

In keeping with the leasing agreement, construction of the runway expansion will be a tradeport expense, not a city expense.







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By highwater (registered) | Posted June 26, 2009 at 14:03:39

Read the second paragraph again, reality check. It pretty clearly states that the money is to buy land so that the HIA can build the runway.

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By Guess I'll Fly A Plane To Work (anonymous) | Posted June 26, 2009 at 14:09:45

An interesting study in contrasts! Again and again council talk a good game but when it comes down to the wire they reveal their real priorities with their spending decisions. Business cronys = good, communities = bad.

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By realitycheck (anonymous) | Posted June 26, 2009 at 14:09:48

And that is why it is wrong. The runway is already there. The money is not to build a runway, it is to expand an exiting runway.

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By highwater (registered) | Posted June 26, 2009 at 14:36:20

No where does this article say that the money is to build a runway.

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By realitycheck (anonymous) | Posted June 26, 2009 at 14:44:53

Highwater, the articl has been updateed since its first posting. It now reads correctly.

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By arienc (registered) | Posted June 26, 2009 at 15:21:17

A Smith...perhaps you might be able to explain how those who oppose corporate welfare are "thieving commies"? How does giving money to Tradeport and buying land for developers equal "more money for average people"? This is our tax money we're talking about. One would think there'd be some common ground here.

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By M. Desnoyers (anonymous) | Posted June 27, 2009 at 08:09:25

The sad reality of this recent decision to invest more taxpayer funds in HIA is that it affirms the old adage that " A fool and his money are easily parted". With these two new investments it brings the total new capital injected by the City of Hamilton since the Tradeport agreement was signed to $30 Million. In the spectator article yesterday it was stated by Mr. McCabe that it is a requirement of the lease that Hamilton buy the lands for the purpose of runway expansion. This is in fact true but virtually all of the residents of this city wouldn't know that because the full and complete text of the agreement has never been publicly released. The lands which were purchased by Council last year for the purpose of the "fuel farm" were outside of the lease agreement but taxpayers were asked to foot the bill. Councillor Mitchell has on numerous occassions publicly stated that he has fought for this fuel farm on the basis that a pipeline would be built and huge amounts of truck traffic would be removed from the roads. We now find out that the pipeline won't be built because it is not economically feasable so the trucks will remain. We as a community have been duped.

During the worst recession in arguably seven decades council has seen fit to invest in an industry that is reported to lose over $10 Billion this year on the heels of almost $9 Billion in 2008. Who knows what the total taxpayer investment has been in HIA when you consider Federal and Provincial monies as well. The "economic engine" of HIA has DIRECTLY netted city coffers approximately $600 thousand dollars and in the same period the operations of HIA has netted the shareholders of Tradeport over $9 Million.

When will this madness stop.

Michael Desnoyers
Co-Chair
HOD

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By Balance (anonymous) | Posted June 28, 2009 at 23:19:25

I'm sure I'll receive many down votes for this but here goes.

I believe we are fortunate to have an International Airport in Hamilton, especially such a successfull one. Every night I hear the jets taking off and I think of the jobs created and the taxes paid. I've used the airport many times for personal travel and shipping of packages. What an asset to the community, many other communities would kill for such an investment.

According to Mr. Desnoyers tax payers have spent $30 million with a profit share of $600,000. What he neglected to mention is all the investment that Tradeport has undertaken and all the new property taxes and jobs they have created. Also, look at all the investment that will take place with the City's land purchases, a fuel farm, runway expansion, hangers, flight kitchen etc. Taxpayers spend $6 million on land and get $10's of millions in investment at no cost plus the additional tax revenues from it. Sign me up, if I could purchase land and have someone improve it for me and then turn it over to me after a period of time, pay more taxes to me and a profit share, I'd be thanking them.

I'm not sure where some of the other bloggers get their information from but I've personally heard of some get jobs at the airport. I've heard of an 18 year old highschooler making $20 an hour with benefits working for one of the couriers.

Mr. Desnoyers, put your money where your mouth is, move your business to one of Hamilton's vast brownfields (that you claim we have an abundance of) or better yet, run for mayor in the next municipal election which happens to be next year (2010). If you are a true Hamiltonian for Progressive Development and have the pulse of the community then you shouldn't have a problem winning the election.

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By nobrainer (registered) | Posted June 29, 2009 at 08:35:59

"better yet, run for mayor in the next municipal election which happens to be next year"

I need to speak up about this, how come any time someone disagrees with the city's direction the legions of supporters pipe up saying, in effect, If your serious about this you should run for mayor. All that tells me is that if your not running for office you should just keep your mouth shut, that's totally un-democratic. All citizens have the right to speak up, not just in an election and not just as a candidate for election.

And by the way I should point out that the mayor of Hamilton - you know elected by the "pulse of the community" believes the cities airport development plans are way too big and we should be investing more in brownfield redevelopment instead of paving over more farm land.

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By nobrainer (registered) | Posted June 29, 2009 at 08:36:46

^By the way I didn't vote you down. I disagree with your comment but at least your making an argument and not just being insulting or trolling.

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By M. Desnoyers (anonymous) | Posted June 29, 2009 at 13:22:16

-In response to BALANCE

The true economic benefit of HIA is not an easy thing to ascertain. Without question there are other finacial spin offs but how many of these can you DIRECTLY point to and determine what they are. This is why in my original message I clearly stated that the city has DIRECTLY netted $600K in rental based upon a complicated Revenue formula. As an aside, the lease agreement requires that we give half that back. Anouther example is property taxes which is running around $1 Million per year. At the current rate we are investing 3 to get 1 and are on a slippery slope. At the end of the lease term (2036)there is an automatic renewal but if Tradeport decides to walk then you are absolutely correct, the City gets all the assets back. If the experts are correct and expensive and scarce fossil fuels continue to decimate this industry then it is quite possible we will be left with a totally worthless asset.

Your point about moving my business has no merit and would only be valid if I was actually looking and didn't consider the alternatives. In regards to running for Mayor, I thought in a democratic society it was possible to institute change without being an elected official.

If you look at it from a different perspective I have put much more than money where my mouth is, I sign my messages with my real name!

Michael Desnoyers
Co-Chair
HPD

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By Balance (anonymous) | Posted June 29, 2009 at 21:51:02

Nobrainer, I see you point of view. Thanks

Mr. Desnoyers, just to be clear, you are correct, we're spending 3 to get 1 but only if you look at it for one year. We're getting $1 million in taxes every year moving forward. In fact, once these improvements are made we'll be getting a lot more than that per year. I still believe firmly that it is a worthwhile investment. I also believe that air travel for people and cargo will be around for years to come. I'm sure the airline industry isn't just sitting there waiting to see what happens, their investing in research and development to combat rising energy costs.

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By M. Desnoyers (anonymous) | Posted June 30, 2009 at 08:26:00

Balance,

In point of fact, averaged over the years since the agreement was signed in 1996, the City of Hamilton has been investing at the rate of approximately $2.3M per year. These are the investments that we know of and do not include things like road upgrades etc. that were paid for by the City or the province. There has been numerous investments by the Federal government as well for things like the ILS system and most recently the Fire and Safety equipment. All necessary things but still from the taxpayers purse. Since the mid 80's there has been over $100M taxpayer dollars invested in HIA and who knows where it will end.

You are absolutely correct that infrastructure improvements at the airport will result in higher tax revenue for the city but we will never realize a true return on the investment if we keep investing more each year then we get back! Despite what we as taxpayers have been repeatedly told, the proposed AEGD is going to cost taxpayers 10's if not 100's of millions of taxpayer "involvement". Is this the right use for the very limted financial resources the city has?

I also believe like you that the industry (airline) will continue to evolve but it will be hugely different than what it is today and will small regional airports like Hamilton survive? There is enough evidence today, post the $140 price per barrel of oil that it will not.

Twenty years from now if HIA is immensley successful and Hamilton is prospering because of this economic engine then I will likely have faded away into the background and people will probably not pay attention to me. If however, it doesn't survive and we have sunk the full weight of our economic resources into "our #1 economic priority", who will be held accountable?

I guess until then we will keep asking the questions to see if we can get any answers!

Michael Desnoyers
Co-Chair
HPD

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