Setting the record straight on Red Deer projects, debt
Red Deer First has not been afraid to criticize the city on a number of issues. It has also been defensive to anyone who has criticized the validity of the issues being named. As mayor, I feel it my obligation to correct a number of recurring myths and put some issues into fuller context.
Water tower painting: This is an unlikely issue for debate during an election. The painting of the water tower was publicly tendered, and the work was awarded to the lowest bid that met the specifications.
The high cost was due to the need to contain contamination from the original lead-based paint.
It has been noted that the water tower is not currently used for water storage. This is correct as there is sufficient water pressure in the area. However, the facility is kept in working order and would be used for water storage in the event of a potential problem at the water treatment plant.
I also believe that Red Deerians would miss this iconic structure if it were to be demolished.
Civic yards: The new civic yards were built in 2007 at a comparable cost to other similar facilities across Canada.
It is acknowledged that some of the facades are attractive; however, behind those facades, most of the structures are both utilitarian and functional.
Many of the environmental features on the buildings such as solar panels, blinds and cooling towers are designed to reduce ongoing operating costs.
The site will also accommodate expansion as the city grows.
Old civic yards: The redevelopment of the old civic yards is a real opportunity to expand the downtown towards the river and provides for high density mixed use development.
It was never anticipated that the sale of the land itself would create huge profits for the city coffers.
However, the tax revenue from downtown redevelopment will be a major source of revenue in the future.
It will also significantly change the image of the city with a new public square along the water front. This vision is laid out in the Riverlands Area Redevelopment Plan adopted by council a few years ago following highly supportive and extensive public input.
Debt: There appears to be considerable debate about the use of debt and about the exact amount of debt the city carries. Most economists and groups such as the Alberta Chamber of Commerce suggest that borrowing is an important part of any municipal sustainability plan.
As Harry Kitchen writes, “There are solid arguments for greater use of borrowing especially where capital projects benefit future generations.” (Quoted in Alberta Chamber of Commerce Vision 2020 document)
• note from the Advocate survey that most candidates support using debt to fund capital projects. The question is therefore how much debt is appropriate for a city the size of Red Deer with major infrastructure needs.
Some candidates have used the current debt of $199.1 million, whereas others have used debt projections for the end of 2013. The number of $200 million sounds large when presented out of context.
However, the facts regarding the city’s debt are as follows:
• The city benefits from excellent interest rates from the province, which are at a fixed interest rate for the duration of the loan.
• The actual debt as of July 1, 2013, is $199.1 million, which represents 46 per cent of the debt limit set by the province.
• 68 per cent of the debt is related to self-supporting utilities such as water and sewer facilities. At present, the city is expanding both the water and wastewater treatment plants at a final cost of over $200 million.
• The city’s debt per capita is currently approximately $2,050. In 1982, the debt adjusted to today’s dollars was $3,190 per capita.
• Red Deer is very comparable with other cities in terms of total debt.
In the recent lpsos Reid Survey, 97 per cent of residents considered the quality of life in Red Deer to be good or very good, and 77 per cent felt that the quality of life had either improved or stayed the same.
In addition, 83 per cent felt that they received good value for their taxes.
As I bow out of my role as mayor, I look forward to watching the city expand and develop, and take considerable satisfaction knowing that Red Deer is a progressive community with a prudent and responsible financial situation — a community with a promising future.
I believe Red Deer has great potential for the future and a quality of life second to none.
City of Red Deer
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