The conflict between sound financial axiom and ludicrous financial dogma will hit the roof at Toronto city council sometime between May 11 and 13 — appropriately enough on the issue of whether schools will be exempted from the city’s much-celebrated green roof bylaw – the first in North America.
As with any roof, there’s a lot of stories underneath, so give me a second to review the foundations of what will become one of the critical decisions of this city council term and a game changer in the environmental field. My apologies that the decisive rules governing society have boring explanations.
It’s axiomatic that making sure there’s a roof over head is Job 1 in financial planning — for individuals, families and governments. That probably explains why it’s so hard to get a mortgage for a building without a roof. Indeed, a major purpose of mortgages is to manage the upfront financing of sturdy foundations and roofs that will stand the test of time and pay off over the life of the building. Roofs are not like salaries or other here-today-gone-tomorrow operational expenditures that get covered by out-of-pocket expenses.
So they’re treated differently. No-one is considered a bad financial manager for having a mortgage on a house, especially if the house is regularly going up in value. But someone is considered a poor financial planner for running into debt on meals at restaurants or fancy clothes bought for one event.
Confusing the two defines shortsighted planning because it confuses short-term expenditures with long-term investments.
Ontario cities and public schools have never been able to finance many of their building maintenance expenditures or green infrastructure investments in this accepted way, and that’s why both face chronic financial problems.
There are two reasons why cities and schools have been exempted from this common sense set of rules. If I had the space to be longwinded, I’d say it’s because both cities and schools predate the onset of democracy and the rules governing what city-zens can do for themselves have stayed stuck in time. Banks changed their policies and began making loans to blue collar workers after World War 11, but provincial governments haven’t started to treat municipalities as adults yet.
But long story short: the immediate explanation for an explosive problem the Toronto’s city government and schools must face at the same time is that the zealots behind Ontario’s recent budget don’t appear to understand the difference between infrastructure investment that yields savings and revenues over time and operational expenditures that are spent and gone.
That is why the Ontario government thinks that gambling casinos bring in money (which they may do, on a day-to-day basis) while green roofs cost money. No wise decisions can be made with this kind of thinking, which is why the green roofs in school issue needs to be brought to a head – not, as the school boards have tried so desperately and with such good intent – sweep the roof issue under the carpet, as it were.
In 2009, City Council passed a green roof bylaw. Two million square feet of green roofs have since been built in the city, according to Green Roofs for Healthy Cities director Steve Peck.
The total value is incalculable. In a soon-to-be-released report, the authoritative U.S. Government Services Administration calculates that engineered green roofs have “ a Net Present Value of $2.70 per square foot per year, Payback of 6.2 years and an Internal Rate of Return of 5.2 % annually,” thanks to keeping rain out of storm sewers, reducing roof maintenance, and lower energy bills. This says nothing about benefits to the environment (roofs are a great habitat for birds and bees), the sheer splendor on the grass of green roofs or possibilities of using roofs to grow food.
On February 23, 2012, the city’s chief planner recommended that the Planning and Growth Committee exempt public and Catholic school boards from the green roof bylaw. The chief planner’s stated rationale was that painting roofs white reduced the heat stored on otherwise-dark roofs and that other areas of school grounds might be able to store rain water and offer green space akin to a green roof.
That is about as lame as any planner can get, let alone the chief planner of the very department that made the case for a green roof bylaw based on the long list of their benefits. A typical shortlist of green roof public benefits (see this winter’s issue of Living Architecture Monitor)checks off 16 items, and I would add two more of my own.
The reason why school boards can’t afford green roofs is that the province gives them no ability to amortize expenditures for building maintenance or green infrastructure generally. They must balance the books each year.
The committee vote split 2-2, which explains why the vote heads to Council next week without a recommendation.
Trustee Irene Atkinson’s website does an excellent job of presenting the infrastructure crisis of Toronto’s public schools – with 8.22 billion in needed “deep retrofits” that are being postponed – at a rate ensuring that only six Toronto schools will be in good condition by 2019.
Lacking the ability to borrow and amortize investments in maintenance and green infrastructure ensures that the only way for cities to balance the books on operational expenditures is to postpone needed repairs. That’s the secret behind balanced budgets.
Rather than mortgage the future of schools and public infrastructure, the city should refuse exemptions from its bylaw and work with boards of education to demand modernization of financial management of municipal government properties.
My guess is that $8.2 billion in environmental retrofits of Toronto schools would employ more people than a casino, and with greater value. A treasurer who can’t see this is a menace to public well-being.
There are still some easy solutions around, and this is one of them.
*Wayne Roberts contributed to the development of the city’s 2009 green roof bylaw