New Westminster resident Christopher Bell is concerned the city is "pulling the plug" on playground upgrades and other capital projects because it's concerned about going into too much debt.
Bell peppered city council with questions about the 2013 to 2017 financial plan at Monday night's council meeting. His greatest concern is that the city has put capital projects on hold because of concerns about going into too much debt before selling the office tower that's being built above Anvil Centre.
"You promised that reserve funds being used to build the office tower would be backstopped by debt being used to pay for 2013 capital works projects and yet you now cancel those 2013 projects. Why?" he asked.
When the Uptown Property Group withdrew from the project, the city decided to proceed with the office tower on its own and explained how it would finance the project. The city's plan was to borrow up to $59 million from the Municipal Finance Authority, which included up to $11 million for the city's costs of the civic facility and parking structure, up to $33 million related to traditional capital programs, and up to $15 million for interim financing until it received special casino funding for the project (known as development assistance compensation).
Instead of funding $33 million in facility maintenance, road maintenance and park development projects that were included in the five-year capital program through reserves, the city stated it would pay for programs with funds borrowed from the Municipal Finance Authority, and then use $33 million in reserves to help fund the office development.
Bell is concerned the city has now decided to delay $3 to $4 million in capital projects because of the Anvil Centre project's impacts on the budget.
As part of the 2013 budget process, staff presented council with a list of potential debt-funded projects that could be deferred this year. This included: $700,000 of $1.4 million of improvements to the Front Street Parkade; $500,000 of $1.4 million for roofing on Queen's Park Arena; $700,000 for the Gas Works building project on 12th Street; $164,800 for various public works; $564,700 of $4.1 million budgeted for various civic facilities projects; $950,000 of $2 million budgeted for park playgrounds; and $1.2 of $3.6 million budgeted for various park infrastructure.
During deliberations on the 2013 to 2017 financial plan, Coun. Chuck Puchmayr supported deferring projects that could be done in future years. He thinks it's prudent to hold off on projects that aren't "absolutely necessary" this year, rather than to borrow money to do projects that can be completed when the city sells the office tower.
"Why would you borrow money right now when maybe at the end of this year or early next year, you don't have to?" he told The Record. "If the building was sold tomorrow, there would be no need to borrow to do capital projects. The interest is so low - never-the-less, it is still interest."
Puchmayr noted that it's not uncommon for projects included in the capital budget to be bumped into a future capital budget because there's no time to get the work done that year or crews aren't available to work on the project. He said the city will proceed with capital projects such as roadwork because deferring those initiatives to future years could cause additional problems.
The City of New Westminster's 2013 budget calls for a 2.9 per cent property tax increase.
Gary Holowatiuk, the city's director of finance and information technology, said that works out to be an increase of about $30 on a strata property, a $69 increase on a single family home assessed at $700,000 and a $100 increase on a single family home assessed at $1 million.
It will also see increases to business and heavy industrial property owners but will result in a decrease for light industrial properties because the city has lowered the industrial tax rate in an attempt to be more competitive.
According to Holowatiuk, New Westminster is in the "middle of the pack" in terms of its property taxes and ranks about eighth overall in the region.
New initiatives in this year's budget include allocating $500,000 for a facility replacement reserve to deal with the future replacement/renewal of Canada Games Pool and $200,000 for a reserve fund for the future Massey Performing Arts Centre replacement.
The city will also put $400,000 into a "rate stabilization" reserve to minimize tax increases related to Anvil Centre in future years.
Bell expressed concern that the city is "denying upgrades" to parks projects, at the same time that it's allocating $400,000 into a reserve account for Anvil Centre.
Bell posed numerous questions to city council and staff related to New Westminster's 2013 to 2017 five-year financial plan, so many that he was unable to read them all to council in his allotted time and that staff was unable to respond.
Holowatiuk asked if he could get a copy of the questions so staff could work to get him a response to his queries.
Other than Bell, New Westminster resident Bill Zander was the only other resident to comment on the budget.
He expressed concern that provincial and federal governments are passing along costs to municipalities and aren't spending enough on upgrades to municipal infrastructure.
"It's absolutely obscene that there isn't more money coming from the federal government," he told council Monday night.
