Anti-borrowing blitz planned as alternative approval process hits home stretch

A key organizer of a campaign to prevent the City from borrowing as much as $32.2 million to pay for an array of projects and purchases says he will launch a blitz to convince residents to sign petitions expressing opposition to the proposals.

Under the alternative approval process, opponents have until May 30 to get at least 5,546 elector response forms submitted to city hall for each of the 11 packages of upgrades to a range of City buildings, parks, roads and fleets.

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The threshold s equal to 10 per cent of the electorate and if it is met for a particular item, council will be forced to either nix the work, find another way to pay for it or take it to a referendum.

"I'm really going to push the next two weeks," said Eric Allen, one of the people behind the Enough Already! campaign.

Allen, who had led successful campaigns against the Harmonize Sales Tax in 2011 and borrowing $3.56 million to pay for the city's portion of a dike along River Road in 2012, said possibilities include simply dropping off petitions at doorsteps.

That would save people the effort of tracking them down and Allen said it takes about five minutes to fill them out. But there still remains the effort of getting them back to city hall in what Allen and others contend is a cumbersome process designed to make it difficult to stop a proposal.

That said, Allen estimates the campaign is about halfway to meeting its goal and he is "75 to 80 per cent confident" it will be met. If the count falls just shy of the "magic number," Allen said campaigners will make an appeal to council to consider a referendum regardless.

One of the core arguments against the borrowing is the cost of paying the interests. Based on a 3.79-per-cent annual interest rate, the cost would add up to $20.5 million over the 20-year duration of the debt if all of the projects were to survive the process, according to a City estimate.

(If a proposal to borrow $2.9 million for a range of equipment purchases goes ahead, financing for that one will be over no more than 10 years and at 2.6 per cent, adding up to $676,000 in interest.)

"The borrowing is just a tax increase because that's how you have to pay for the interest," Allen said.

Moreover, Allen maintains the proposals "are not real capital projects, or not large capital projects...they just put them together in an omnibus deal."

One proposal is to borrow $4.7 million to pay for roof replacements.

"If you spend $500,000 on a roof and you spend it over 20 years, it costs you $250,000 in interest and that doesn't make any sense on any level," Allen said.

A common argument in favour of borrowing for a capital project is that future users will also benefit from the asset and so, should contribute to paying for it. It's a position with which Mayor Lyn Hall agrees.

"We see that in our operation on an ongoing basis," Hall said. "We will make a decision on a particular project knowing full well the folks that are paying for it will reap the benefit of it. And they'll reap the benefit sooner than us saving up for $32 million of expenditures that may take us many, many years to save up."

He also noted that the City has access to "extremely good rates" through the Municipal Finance Authority, noting it has a AAA credit rating.

After voters approved proposals to borrow a total of $50 million to pay for a new Four Season Pool and Fire Hall No. 1 during a referendum in October 2017, Allen said residents were "blindsided" by the latest ask. Hall said voters were not given the heads up because "we were going through an assessment process at that time."

He said council used the option of a referendum at that point because it involved two large-ticket items and there was a bit more time to get assent via that type of process.

Hall said all 11 proposals currently up for approval are worth pursuing saying they will "set us on a good path."

"We're going to continually have infrastructure needs," Hall said. "We've had infrastructure needs since the city was born and the community will continue to have those, but right now we see this package of infrastructure requests as the key to us moving forward."

Hall spoke particularly in favour of borrowing $5 million to replace about 600 street lights and traffic signals around the city and taking on $500,000 to signalize the intersection of Domano and St. Lawrence. He said they are a matter of public safety and are in answer to concerns raised not only by staff but by residents.

Not all of council is onside with the proposals. In March Coun. Brian Skakun voted against proceeding with six of the projects: Masich Place, Ron Brent, 14th Avenue, Highway 16 West frontage, Goose Country Road and the street light replacements.

According to a staff report, the estimated impact on the property tax levy of the 10 projects for which borrowing would be for 20 years will be 0.29 per cent in 2021, 0.32 per cent in 2022 and 1.31 per cent in 2023 when the largest of the projects, a $10.2 million upgrade of the Aquatic Centre, kicks in. (The report is posted with this story at www.princegeorgecitizen.com.)

Information on the alternative approval process and access to the elector response forms, can be found through the City's main webpage at princegeorge.ca.

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