In Edmonton we are witness to a suave hoodwinking from city managers over the average populace. The City of Edmonton will carry a $200 million arena construction debt, while the principal party gets to hold his promised monies in an escrow account that makes minimal interest (payments over a 30 year period). The hoodwink comes in the guise of the publicly stated, “no tax increase.”
Ultimately the city’s debt burden is the responsibility of the tax payers. The city is trying to distribute this debt to all those visitors that would use the cities services, which will lessen the tax burden to its citizens. Utility and public service costs will rise dramatically for non-existent point source debt, where hidden funds become levied back into the arena fiscal payment plan. This manoeuvre is called a revenue income engine, because once the debt is recompensed the city maintains the incoming revenue. Then to gain access to the promised Provincial Assistance Grant funds, the cities construction loan monies must be in place, in escrow, before the province even begins to transfer payments.
The same can be said here in Barrhead with our proposed water treatment improvements. It has been publicly stated, in a local media informative, that our project will cost twelve million dollars with a built-in cost over-rider of an additional two plus million, for a total expense of fourteen million, plus.
In today’s world, construction bids are designed as mere reflections of basic-bare minimum pricing for material and labour costs. The enormous profit margins to be harvested come from cost over-rides and extra material and labour service add-ons. We were told the provincial government will assist with 71 per cent of the stated construction cost; however this applies to only the original constructing bid package. This then transfers the additional $2 million plus in cost over-rides to the town’s portion of the expenditure. The town’s burden then rises from $3.5 million to $5.5 million. It is this amount that must be held in escrow before the province will advance any monies from their promised 71 per cent portion.
With a populace base, including Neerlandia and Manola, of approximately 7,500 (estimated) and using Councillor Lawrence Miller’s doubling of utility billing as the basis of repayment, then each household becomes responsible for $733.33. This breaks down to 37 payments each over a six year period to repay the town’s portion of the construction. At this future point in time the revenue income engine kicks in and the town then continues to collect revenues for non-existent debt. Once the utility cost is increased the billing never goes down, yet the debt load is now removed. Each additional 6 year period the town gains $14 million in hidden taxes. This then becomes a very expensive venture and a thorough hoodwinking.
W. Krechuniak
