Capital Plan Borrowing: Should voters support $235 million more debt? Debate needed.

Capital Plan debt breakdownOne of most under-reported, under-discussed issues leading up to the November 15 civic election is the referendum question. What referendum, you may ask?

No, the referendum is not on whales in captivity or on the Kinder Morgan pipeline (both were proposed and rejected at Council), but rather it’s a question about borrowing another $235 million. More precisely, there are three separate requests which, if approved by voters, would authorize City Council to borrow up to $235 million. This is debt would on top of the $147 million proposed for utilities that does not need the approval of voters. Should the City of Vancouver take on another $382 million in debt to fund a portion of the upcoming $1.085 billion, four-year Capital Plan? Or is the City’s debt load enough as it is? Jonathan Baker has an interesting piece on his blog about Vancouver’s Financial Deterioration.

A number of what could have been popular items were left out of the Capital Plan. There’s no budget for outdoor pools (Commissioner John Coupar’s motion was voted down by Vision Vancouver). Nor is there a line item for funding to renew the Marpole Community Centre (proposed by Councillor George Affleck, but again voted down by Vision). Perhaps it’s worth reviewing the pledge the City will agree to in order to take on debt:Debt pledge CoV
In other words, the City Council will promise to use its power to tax residents in the future in order to back the issuance of new debt. Residents are really being asked to take on an additional $389 debt per capita, plus interest.

Photo: Bank of Canada

Photo: Bank of Canada

What would happen if the Capital Plan questions were voted down? The City could still spend $850 million over a 4-year period. The priorities in the plan would have to be adjusted by the new Council. Life would go on. There’s even the possibility that Council could go to residents with an updated Capital Plan with different priorities for another vote.

How much debenture debt does the City currently carry? At a Council meeting on October 14, 2014, it was revealed that the City owes $759 million, and at that time another $105 million borrowing was approved:
Capital Plan borrowing

Note that some of the previous debenture debt will expire (the repayment schedule was not made available at that time).

Should residents approve Council’s request to take on more debt? The Capital Plan borrowing questions are one of the few places where voters can constrain City Council. Would Vancouver be better off if the Capital Plan borrowing questions were defeated?

References

Important Park Board meeting Monday, Sept 29: Review of $154.5M 4-year Capital Plan (Community Centre renewals & more) September 25, 2014

Marpole Community Centre: Secret plan to move to Granville Street already a done deal? Why is draft Capital Plan vague about location for renewed centre? October 5, 2014

No desire for Streetcar in Vancouver? Capital Plan budget to decommission line to Granville Island, October 17, 2014

How should City Hall allocate your money? Parks? Pools? Community centres? 2015-2018 Capital Plan: Open House May 8 & 10, plus online survey. May 6, 2014

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We’ve reproduced the borrowing questions on the ballot below:

1. Parks and recreation

This question seeks authority to borrow funds to be used in carrying out the basic capital works program with respect to parks and recreation.

“Are you in favour of Council having the authority, without further assent of the electors, to pass bylaws between January 1, 2015 and December 31, 2018 to borrow an aggregate $58,200,000 for the following purposes?”

A. Parks To provide for major maintenance, upgrading or replacement of existing parks and features within parks, such as pathways, playgrounds and playfields that are beyond economical repair or no longer meet operational requirements. $17,950,000
B. Recreational and exhibition facilities To provide for major maintenance, upgrading or replacement of existing recreational, entertainment and exhibition facilities that are beyond economical repair or no longer meet operational requirements, and provision of new recreational facilities to serve Vancouver’s growing population. $40,250,000
Total $58,200,000

2. Public safety and public works

This question seeks authority to borrow funds to be used in carrying out the basic capital works program with respect to public safety and public works.

“Are you in favour of Council having the authority, without further assent of the electors, to pass bylaws between January 1, 2015 and December 31, 2018 to borrow an aggregate $95,700,000 for the following purposes?”

A. Public safety facilities To provide for major maintenance, upgrading or replacement of existing public safety facilities, such as fire halls and police buildings, that are beyond economical repair or no longer meet operational requirements. $22,250,000
B. Street and bridge infrastructure To provide for major maintenance, reconstruction and enhancement of the arterial and neighbourhood transportation networks, greenways and cycle routes and to undertake major maintenance of bridges and other structures. $56,450,000
C. Street lighting, traffic signals, and communications systems To provide for major maintenance, replacement and expansion of street lighting, traffic signal, and communications systems that are beyond economical repair or no longer meet operational requirements. $17,000,000
Total $95,700,000

3. Community and civic facilities

This question seeks authority to borrow funds to be used in carrying out the basic capital works program with respect to community and civic facilities.

“Are you in favour of Council having the authority, without further assent of the electors, to pass bylaws between January 1, 2015 and December 31, 2018 to borrow an aggregate $81,100,000 for the following purposes?”

Program Description Amount
A. Community facilities To provide for major maintenance, upgrading or replacement of existing community facilities, such as libraries, cultural facilities, affordable housing, social facilities and childcare centres, that are beyond economical repair or no longer meet operational requirements, and provision of new community facilities to serve Vancouver’s growing population. $59,750,000
B. Civic facilities and infrastructure To provide for major maintenance, upgrading or replacement of existing civic facilities and infrastructure, such as information technology systems, civic offices and maintenance yards, that are beyond economical repair or no longer meet operational requirements. $21,350,000
Total $81,100,000

 

Capital Plan panels at Open House

One thought on “Capital Plan Borrowing: Should voters support $235 million more debt? Debate needed.

  1. I went to theadvance poll already & thought the questions were also poorly phrased, i should have fotographed it.
    Some one should get a copy of the questions & discuss them for better voter preparation & understanding before answering them on first reading in the voting booth

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