Dear Editor
The people who aren't paying attention to the capital expenditures being promoted by a majority of North Battleford city council had better start.
I know many numbers are being tossed around, and I would like to point to the facts as I see them. Our current debt, in rounded off numbers, is $22 million. However, our long-term liability to service that debt is $32 million. These numbers are taken from a public memo presented to council. Simple math reveals, if your debt load is $45 million, long-term liability will be $64 or $65 million.
The City, on your behalf, applied to have our debt ceiling raised from $31 million to $45 million. The municipal board in Regina granted the request (again on your behalf). It needs to be known this process is similar to a line of credit, temporary approval until the year 2012. Six months prior to the expiry date the municipal board will review the city's financial viability and may guarantee the line of credit for the financial institutions with whatever conditions they believe are required to ensure we meet our commitments. And the process may remain this way for the foreseeable future.
In some circles this is commonly known as receivership, in others, third party management. In either case, it drastically limits our ability to operate with autonomy.
One must remember, if we default, the provincial government must pay the tab (again on your behalf) and the province will send a new administrator with veto power on all expenditures. This scenario has happened before in the province's history.
Comments about unknown operating expenses need to be clarified. On Jan. 12, 2009 a written inquiry to city council was presented at a duly called meeting. The detailed response to council was provided and dated Feb. 4, 2009. The results show, in round numbers, an $85,800 loss. If you apply a 2.5 per cent inflation rate to adjust for the passage of time, add $42,000, so the estimate in today's dollars would be $900,000. The results of this analysis have been reported in the media. Somehow it has been lost in our minds.
As I provide my thoughts, the City of Lloydminster has their operating budget for 2011 online. The Commonwealth Centre's two ice rinks, two field houses and a workout area, have a projected shortfall after revenue of $1,206,840. The indoor pool has a projected shortfall after revenue of $868177 and their six-sheet curling/rink/lounge/golf course clubhouse has a projected shortfall of $511,700. The combined budgetary losses add up to $2,867,017. Rest assured our new facilities will be costly.
Also included in the report resented to council is the Civic Centre, built in 1961. With an expected life span of 65 years it should be replaced in 2024. Original cost was $369,000. The estimated cost in 2009 was $32 million. Apply a 2.5 per cent per year inflationary formula and the cost in 2024 will be $48.5 million. Thirteen years from now, I have not done the math (my head hurts) on our financial position be at that time, but I think it's safe to say we will be the only city in Saskatchewan with an antiquated ice rink, with restricted ability to finance a replacement. I believe our Civic Centre has to be worked into our spending plans. If we don't, then city hall, or more importantly city council, will be accused, as all councils are, but the net generation of hopeful candidates, of bad planning and lack of vision, that we should have borrowed the money years ago.
It appears citizens who question the road we are heading down are marginalized by a majority of council saying we don't need to concern ourselves with the debt, that the community is ready and anxious to pay the bills.
Building new facilities or replacing old ones is not a mistake. The massive debt load is. Those of us who desire prudent fiscal management of our money are not naysayers, as we have been described by some. We are just folks who don't fully agree that publicly owned and operated buildings are the secret to our success.
Brad Pattinson
North Battleford
