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 14, 2010

City Council erects another monument to its impressive escalation of debt

“Eye on City Hall”

A column of Information, Analysis, Comment, and unfiltered opinion
Bill Longworth, City Hall Reporter
June 14, 2010

Well give yourself a giant pat on the back, Oshawa taxpayers, you’ve erected and paid for another monument to our city council politicians. The new council chambers and new wing of city hall opened for business last Monday.

Oh! Sorry! Not paid for yet. But you’ve accumulated more city debt.

The payback money over the next number of years is coming from our Oshawa Public Utilities Dividends and from city interfund loans such as the city’s various replacement reserve funds, which of course will be topped up again over the next number of years with ongoing tax collections. The OPUC dividends used to fund the project will not be available for use by the city to fund some of its operating costs to reduce the highest taxation mill rates in the GTA.

Although the most recently reported cost of the project is $15.4M, we really don’t know how much it cost because so many numbers have been bandied about by the politicians. The reported cost figures have bounced around more than a Harlem Globetrotter’s basketball---from $10.8M to $13.3M to $17.07M to $14.8M to $15.4M.

And now for city hall opening announcements, they have been dribbled downward once again. It’s also hard to determine, however, just what is covered in the costs being quoted, and what costs have been excluded to be hidden elsewhere.

And in press releases, we’ve been told that we’ve had cost reductions from tendered costs to result in cost savings from that $17.07M cost---oh yeah! Let me sell you a scenic cottage lot in the Hudson’s Bay swamplands.

I believe the total cost of the project is closer to $25M, and maybe more, when all renovations, furnishings, decorating, landscaping, rental of leased space and moving of equipment during the renovations, and preparation of temporary quarters during the construction, and hiring of the many project management and other architectural and interior design specialists and demolition experts are included.

Alas, we’ll never know. Politicians specialize in half-truths to pull numbers and arguments out of the air that they think you’ll believe. Like the energy savings paying for this whole project---bu-lsh-t!

In 2008, a 4.44% tax increase raised $4,126,938 so $1M is raised for approximately every 1% tax increase. Discounting variables such as city assessment growth, debt charges paid on borrowed capital, interest charges lost on city hall reserve funds capital, and the opportunity costs of what we might otherwise have done with this capital, we might estimate a 1% tax increase for the next 15 years to pay for the City Hall project, or a 2% tax increase over the next 7 ½ years, or a 3% tax increase over the next 5 years, or a 15% tax increase in one year to pay for this needless $15.4M demolition and rebuilding of city hall “A” wing and Council Chambers and refurbishment of Rundle Tower. However we pay for the project, it is a hefty penalty to pay for something we didn’t need.

We do know that the costs were higher than need be, though, since the old chamber and “A” wing were demolished before we had plans and signed contracts for the new project. I sure as hell wouldn’t want to tear down my house before I had plans, prices, and contracts for a replacement. But city hall is not nearly as concerned as we are with my bucks or yours!

Council Chambers re-building itself has been quoted as rising to $9M, a sizeable portion of the $15.4M being quoted for the entire project. At $1M to demolish the old structure, only $5M is left for the reconstruction of “A” wing and the total refurbishment of Rundle Tower. This hardly sounds creditable to me.

It’d take a forensic accountant to get to the real costs as the city accounting system spreads costs of any one project over so many accounts and over so many departments that no one ever knows the true costs. And these accounting entries often have insufficient descriptors so as to defy identification.

It’s amazing that city hall does not keep ledger sheets tracking the costs of individual projects. Only the costs of big contracts are identifiable. But don’t you know, children, that is done purposely so that construction costs can be juggled to keep the “truth hounds” at bay. Like those bouncing balls mentioned previously, the costs estimates and expenditures are all over the place. These city accountants are magicians at the behest of city council.

Fortunate for you taxpayers, though, we’ve been told that the costs will have no impact on Oshawa’s stratospheric taxation levels.

We hear this as a “toss out line” about the costs of all major City Council projects. If this is so, city hall must have its own printing press to churn out money. They just have to have a source of funds that is not taxpayer based.

With this extra debt, it’s amazing that city council can come in with a .9% tax increase this election year when they absolutely needed 4% increases over the last two years with the mayor vigorously arguing for a 9% increase immediately after the last election. I wonder what he’ll be calling for at the beginning of the next term if he wins. If I win, I’ll be calling for annual 3% decreases until Oshawa’s tax loads reach the average in the GTA.

If the city hall construction cost was the cost to erect a “good riddance” tombstone to the end of this shipwreck city council, perhaps most Oshawa ratepayers would consider it a bargain. As it turns out, there will be a brass plate erected prominently in city hall in perpetuity listing all those politicians responsible for this wastage. This should provide future councils a reminder about the penalties of wasting taxpayer money.

Now when the press toured the new council chamber last Monday, there was no mention of the upgrades that made this new building necessary---the leaking roof, inaccessibility to the handicapped, and energy efficiency.

You’d think that the rationale for demolishing the old and building the new would have figured prominently in the press presentation. Instead, mention was only made that seating capacity had been increased by about 50 to 196, that there was an up-to-date sound system, and a new video screening feature. All of these improvements plus all of the argued shortcomings that necessitated the huge expenditure could have been accomplished in a fraction of the cost of replacing the demolished building. These improvements could have probably been done for the same cost as demolishing the previous structures.

We should have suspected all of the sense behind this whole project when staff rolled out a report on June 28, 2007 that indicated city council had 3 options--- (a) do nothing, or (b) renovate “A” wing and Council Chambers for $15.2M, or (c) demolish and rebuild Council Chambers and “A” wing and renovate Rundle Tower all for $10.8M. A sensible council would have fired the authors of this document so that they could start new careers as stand up comics. This June report might better have been delivered as a huge joke on April Fool’s Day.

As Citizen, Rick Foster, wrote in a letter to the editor on March 3, 2009, “The way this project is going, the new larger council chambers are still going to be too small when the taxpayers converge with their pitch forks and melting tar feathers.”

Or as citizen, Ron Horner, wrote in a letter to the editor on February 23, 2009, “Oshawa taxpayers must really enjoy getting tax increases every year. They must, or why else would they allow this sort of waste to go on?”

And yet, Mayor John Gray in his February, 2009, “State of the City” address to city business leaders, politicians, and community stakeholder, cited this city hall renewal fiasco as one of city hall’s prime accomplishments.

Hell, I’d hate to think of their failures.

Oh yeah! MBA’s, Cullen Miniatures, overbuilding new ice arenas to put Oshawa in a surplus position as excuse to demolish arenas in older parts of Oshawa, highest taxes in GTA, cozy arrangement between mayor and some of his councillors and developers, handling of the UOIT student housing issue, GM Centre tax sinkhole, Regent Theatre fiasco, new downtown hotel letdown, Rundle House demolition, new Downtown Courthouse approved with insufficient parking and now all surrounding downtown streets reduced from 4 traffic lanes to 2 or from 2 traffic lanes to one, etc., etc., etc.

Now all that does put the city hall waste in perspective doesn’t it?

City Hall’s next major achievement to be announced? Dropping a Hiroshima type bomb on the Oshawa downtown!

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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