Political Analyst and Observer, Bill Longworth's, Weekly "Eye on City Hall" Columns, as published in Oshawa, Ontario, Canada's Oshawa Central Newspaper

Monday, June 28, 2010

The screwing of the Oshawa taxpayer---the secret city hall doesn’t want you to know!

“Eye on City Hall”

A column of Information, Analysis, Comment, and unfiltered opinion
Bill Longworth, City Hall Reporter
June 28, 2010

UOIT/Durham College is going to flood the downtown with students and this is going to cost all Oshawa taxpayers dearly.

It’s going to have enormous impact on every homeowner’s tax bill.

The university is critical to the city’s future but its expansion should not come on the backs of the Oshawa taxpayer.

This is a “scoop” not reported by city officials, city politicians, or any news media.

We’re exposing it here first in the Oshawa Central Newspaper…but undoubtedly the story will be picked up for future wider distribution and be of vital interest to all city taxpayers.

In an earlier column, I indicated that moving large masses of UOIT students downtown and creating a second UOIT campus there was a huge mistake.

Even though Mayor John Gray claimed movement of UOIT facilities downtown was part of a planned “domino effect” towards city center renewal, I argued lack of city and political vision discouraged foot traffic from the downtown thus making it difficult to run viable downtown businesses.

This resulted in huge inventories of vacant space and empty storefronts that could be had at distress prices.

This city council, most of whom have been on council for too long, had failed over their decades on council to develop a viable vision for a vibrant downtown. The city centre was dead---and nothing was being done for renewal.

Flooding the downtown with students will exacerbate the problem in a number of ways.

In all likelihood, the well-publicized problems surrounding the main UOIT campus will now be duplicated downtown further discouraging the consuming adult population from shopping or dining there.

The higher class restaurants and stores will disappear, to be displaced by burger joints, beer halls, and dance halls, which will be a magnet for rowdy teens and twenty-somethings from far and wide, hell-bent on joining the party. Policing costs will be increased!

But all this is just part of the story.

By the year 2015, UOIT/Durham College expects to service 5000 students in its downtown campus, and this is going to cost Oshawa taxpayers giant tax dollars.

To service the growing student population, the university expects, in future, to purchase or lease as much suitable downtown real estate as becomes available. They presently have their eye on the McLaughlin Square Condominium Building which would be converted to student use.

They already have the former Scotiabank building at 11 Simcoe Street North as the home for its Faculty of Education, the 30,000 sq ft. Former Bell Telephone building at the SW corner of Bond and Mary as the new home of its Social Science and Humanities Faculty, the Regent Theatre plus a new five story building to be constructed in the parking lot behind the theatre, and the large Alger Press Factory Building kitty corner to the Oshawa Clinic at 61 Charles, and lab space in the basement of the Genosha Hotel.

Therein lies the problem.

All of these properties produced significant tax revenues for the city but educational facilities, purchased or leased, are property tax exempt. All of this tax revenue will be lost to the city. Even the city reports supporting the UOIT downtown expansion fail to mention this lost tax revenue and the politicians were not swift enough to question this lost revenue.

At the commercial rate, even when vacant, these properties would have produced millions of dollars of tax revenue to help fund Oshawa’s operating costs.

And now that these revenues are lost, you, Mr. and Mrs. Oshawa taxpayer, will have to make up the shortfall.

While I do not, at present, know the tax amounts collected from these University acquired buildings, I shall file a freedom of information request, if necessary, to establish these lost amounts if they are not voluntarily forthcoming.

I do know, that in 2008, a 4.44% tax increase raised $4,126,938, so that approximately $1M is raised for every 1% tax increase.

At that rate, homeowners will be tabbed for an additional 1% tax increase for every million of taxation lost from the downtown commercial properties occupied by the university. This is a cost in perpetuity to the Oshawa taxpayer.

Beyond this, the Oshawa City Council has recently granted the university $7.5 million of our tax funds to help with UOIT’s downtown expansion. This is more than the $4.5M the university itself will invest in the downtown.

Fortunately, as with every other large city expenditure, such as the $25M City Hall redevelopment, the $45M GM Centre, and the $25M Legends Centre, we are given the "toss-out-line" that these expenses will not impact city taxes. So rest assured that taxes will not be collected to cover this amount...oh yeah!

In lieu of lost property taxes, Ontario Legislation dictates that the city does collect a “heads and beds” levy of $75 per student from the university.

For the loss of millions of dollars of commercial tax revenue lost from the university use of the downtown buildings, the city will get $375,000 for the "heads and beds" levy for the 5000 students expected downtown in 2015 in consideration of the lost tax revenue.

This is a costly trade-off for city taxpayers.

In addition to all these costs and tax losses, the city, according to Chris Brown, Director of Finance Services, has provided year 1 tax incentives of 90% of property taxes accruing from the privately developed student housing beyond the land-only assessments on the west side of Simcoe just south of the University and this tax incentive continues for the next 9 years decreasing 10% a year.

This taxpayer burden is being borne by city taxpayers despite the fact that the university is operating at a surplus position.

Why is the university not funding its own development costs?

Mayor John Gray and his city council are raping city taxpayers at every turn.

I guess Oshawa and it’s downtown will not shed the nickname, “The Shwa” anytime soon.

And oh yes, Mr. and Mrs. Oshawa Taxpayer. Thanks for subsidizing our university in Oshawa. You’ll pay every day of your life….and pay handsomely once again when your child attends OUR university.

Be sure to follow Bill’s radio broadcasts, “Eye on City Hall”,
every Monday, 6-9 pm EST, on http://www.ocentral.com/thewave/

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