- The city’s foundation needs a light shined on it immediately
As has been mentioned in one of CivicScene’s early factoids, Canadian municipalities operate at the whim of the provinces, and are extremely limited in the autonomy over their financial capabilities.
As such, one might be inclined to assume that municipal resources would be managed with a higher degree of care than other levels of government, whose levers for revenue raising are considerable.
In recent years, that would be an inclination that had little to do with reality, prompting the reason why I am so anxious to read over the KPMG report on the Olympic Village, which is expected to be released either today or tomorrow.
This City of Vancouver administrative report from September 18, 2006, is just one of a never ending list of examples as to why things need to dramatically change at City Hall.
The report centres around City Council proceeding on four Olympic-related venues – the Curling Venue/Legacy Facility, the Percy Norman Aquatic Centre, the Killarney Rink and Lobby and the Trout Lake Rink.
However, within the context of city staff recommendations, proceeding on a project often involves asking Council to take two courses of action:
- Paying for cost overruns
- Mortgaging future budgets to do so
Take the $8.2 million that was requested for the Hillcrest Park Curling Venue, $5.9 million of which was to be sourced as:
“…a loan from the Capital Financing Fund to be repaid from unencumbered revenues in the Park Board Operating Budgets beginning in 2010.”
Or how about the $10.46 million for cost overruns on the Percy Norman Aquatic Centre replacement, which once again was to be paid for as:
“…a loan from the Capital Financing Fund to be repaid from unencumbered revenues in the Park Board Operating Budgets beginning in 2010.”
This future source of revenue was supposed to pay for a number of other cost overruns detailed in the report.
Now, of course, on the eve of 2010, the concept of “unencumbered revenues” from the Park Board’s budget is laughable, particularly with the recent cuts to their budget. Taking loans based on money that one EXPECTS, but cannot GUARANTEE will be there, is just bad fiscal management. Period.
The City Manager’s comments within the report are also very telling, as her staff’s recommendations were”:
“…concentrated on identifying options that will allow all facilities to proceed as planned.”
Meaning that instead of revising project plans, or looking for savings within the gold-plated designs that contained all the bells and whistles, it is much easier to just ask Council to pay for the additional costs, regardless of how irresponsible the means of paying may be.
Reallocations of the 2006-2008 Capital Plan, which was already in place? No problem. Taking funding allocations from other line items within the city budget like the Hillcrest Branch Library? No problem. But here is the kicker from the former City Manager in print:
“However, most importantly, it requires Council and the Park Board to agree to a commitment of future revenues in the Park Board Operating Budget to finance approximately $18.46 million of the anticipated shortfall. Although some of this funding could be provided in part through a fundraising campaign or in the 2009 – 2011 Capital Plan that decision should not be considered a certainty because of the need for electorate approval of the plan in 2008. Commitment of a known funding source – unencumbered revenues in the Park Board Budget beginning in 2010 – is required if Council wishes to proceed with these projects at this time.”
So the funding may or may not be approved by the electorate, but to hell with waiting for that kind of approval…let’s take from the budgets of future Park Boards.
Oh, and the brilliance in justification continues with the comments from the Park Board General Manager, who as reported on CivicScene yesterday, has just announced her retirement. In this report, the GM offers the following:
“These replacements can be achieved at a significant cost savings to the City through the financial arrangements with VANOC. Even with the increased financial commitment recommended in this report, the City will benefit from replacement facilities currently estimated to cost $105 million for approximately $62 million. Without this commitment from VANOC, these facilities will cost the taxpayers at least $43 million in additional capital and a significant delay in their being available to the public.”
So basically, we know we are asking you to pay more than was originally estimated, but borrowing against future Park Board budgets to complete these projects will mean cost savings for the taxpayer.
How exactly this logic holds up in a 2009 economic climate that not surprisingly few within City Hall considered as a real possibility at the time, is tenuous at best.
The bottom line from all this? Something has got to give, and if that means clearing out staff that were responsible for this kind of lackadaisical attitude, then so be it.
Bring on the prescriptions of KPMG and continue on with the house cleaning before the bottom falls out entirely and taxpayers are once again left holding the bag.
Translation? Responsible decision-making needs to return to City Hall, and quick.
