Awesome piece by Joe Couture in the Leader Post today about the 2011 budget. He looks at two financial timebombs the city is facing — the infrastructure deficit and pension liabilities — and shows how the current budget won’t be doing much to address either.

Some highlights:

…. from roads to street lights, the city still doesn’t have such long-term plans in place, Sjoberg admits. A lack of money is the main issue preventing progress in closing the gap. That’s despite significant increases in the city’s debt level over the last few years.

“We are having difficulty keeping up with the capital investments required to operate at a sustainable level,” Sjoberg says.

From council’s perspective, there is an umbrella of money the city has to spend and a lot of it is dedicated to infrastructure, Fiacco says. He also thinks the property-tax base won’t be able to support the needs.

“Something has to change,” he says. “The funding model as it exists today doesn’t work.”

But none of the increase would be spent to address the biggest challenge facing the city in the salaries and benefits department. That is, the pension liabilities, estimated at $238 million — about $90 million more than the city plans to take in via taxes this year.

Pension plan problems are not isolated to the city, Sjoberg notes, but stresses the city is different than a company when it comes to addressing issues of money shortages.

“Everything we do flows back to the taxpayer,” he says. “It’s not as if we can create a new product, like a new iPad, and go out and sell it and generate profit. That is the reality.”

It’s an great piece of reporting that challenges a lot of the rosy notions about our city’s financial situation. An essential read in the lead up to Tuesday’s budget debate.