Friday, July 21, 2006

Open Letter From Andrew Atlin

Published in the St Marys Journal Argus July 19

Please accept this letter as an open letter to all the residents of the Town of St Marys. We have one last opportunity to challenge the financial merits of the recreation-borrowing bylaw. Council feels that it is in compliance with Ontario Municipal Board borrowing limits and feels that they can go forward in good conscience. However a group of residents is concerned that this compliance is simply a temporary condition.

The facts are as follows:

Maximum allowable borrowings per the 2006 debt limit from the province: $24.8 million (assuming 7 per cent borrowing rates);

Current borrowings per the Town: $3.5 million (includes salt shed debenture in 2005);

Amount available to borrow: $21.3 million.

How much have we committed to borrow now:
Recreation centre: $14.0 million.
Municipal operation centre: $2.5 million.
Water plant upgrade: $1.1 million.

Total new commitments: $17.6 million.

So the net position is that right now we have about $3.7 million of borrowing left below our maximum as of today.

But what about the other identified needs on Council's list of capital projects:

1. Industrial land. The Council has begun to make inquiries to purchase industrial development land off of James Street South. Current estimates are that $5 million should be set aside to accumulate an acceptable amount of acreage. Most business people agree this need is crucial to allow the Town to grow its tax base and develop more jobs.

2. Phase II of the water plant upgrade. Originally, Council felt that about $3 million of improvements were needed to meet provincial requirements. Therefore, we can expect about $2 million more to be spent on this project. Water is clearly one Town resource we cannot trifle with:

3. Others? The Town will be out of borrowing capacity when these projects are factored in.

At the same time, debt servicing will go from about $500,000 per year currently to about $2 million per year when the new commitments are factored in. The Town currently has about $10 million of tax and user fee revenues. That means we will need to realize another $1.5 million of revenue every year - a 15 per cent shortfall - for the next twenty years to maintain the status quo. We know many individuals have pledged support to the project and this commitment will reduce the pressure for the first few years but what happens for the next 15. The succeeding councils will have to choose between reduced services or substantial tax increases and we won't have any room to borrow for essential capital improvements.

What can we do?

I'm part of a group of residents who have engaged a municipal law specialist out of our own pocket. We've already spent money to challenge the Council's process before the town reaches the point of no return. We ask you to forward your letters of concern to our member of provincial parliament, John Wilkinson and to John Maddox, regional director of the Ministry of Municipal Affairs in London. Both of these individuals are the check on a municipality when its financial management is suspect.

We suggest you copy Council with your letter to ensure they understand you're concerned with their actions. To date, they have ignored this argument but St Marys is their town too and I believe they may have a change of opinion if they hear from enough of us.

However, they may still proceed. We have one last option open to us. We can apply to an Ontario Court to get an injunction to stop digging by July 24, 2006. The problem with this option is that it may cost more than $20,000. Each of the current members of the residents group has committed $200 to the court challenge. We would welcome any contributions up to $200 each to build sufficient funds to file the injunction if necessary. We will return the funds in full if they are not needed.

What do we want to see?

Most of us are indifferent as to whether the project is built. We want an honest debate during the upcoming election campaign to hear whether the project is built and how it is financed. We don't presume to know the overall sentiment concerning the merits of the project but we feel that the majority of residents are against unnecessary tax increases and hasty decision making processes.

We will respect the wishes of majority of our residents. If the community elects a slate of candidates who want to go forward immediately after being elected so be it.

We have prepared a petition for residents to sign which runs as an ad in the paper twice to gather an indication for the support for delaying construction on the project. We would like people to respond within one week if they support the petition.

We will forward the petitions to Council and John Wilkinson's office.

If you want more information concerning our argument or want to support the cause please contact me, Andrew Atlin, andrewatlinca @ rogers.com, 519-284-2654 or John Munro, jmunro @ webfinancialsolutions.com, 519-284-4224

Yours truly

Andrew Atlin
St Marys, Ontario

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