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Back  |  March 07, 2019  | 

Financial Strategy for Mega Projects

This week, Council approved a “financial strategy” in support of four mega projects:

  • BMO Centre Expansion
  • Arts Commons Phase One
  • Events Centre
  • Fieldhouse

I voted against adopting this financial strategy and keeping it a secret.

The conditions of the “financial strategy” remain confidential at this time, but I can share that the aim is to create a single, very large “pot of money” to fund mega capital projects through potential land sales, drawing down investments, reducing emergency funds, and other options.

Adopting these terms will restrict what we can do for many years, and many future Councils. The City Financial Officer advised against pursuing all four projects simultaneously, and recommended a maximum of one.

Further, we will be severely over-extended and compromised in our financial capacity to address the looming property tax shift through rebates, as Council is now considering a massive increase to residential property tax owners. I am also concerned we will be less flexible in preparing for and responding to natural disasters (such as another flood as severe or worse than 2013). Finally, there will likely be other unforeseen financial implications, especially given we are embarking on the massive capital investment in the Green Line.

The sources and amounts of the funds are confidential. However, the City currently earns approximately $30 million per year in various interest bearing accounts. By eliminating these reserves, the City will no longer receive this investment income. By my calculations, this means that the immediate consequence of this strategy is an approximately 2% increase in property taxes.

I cannot understate my concerns with this approach. It is reckless to over-extend ourselves in this way and I believe that the public deserves to know how, and where, your money is being spent. Now that the fund has been approved by a majority of Council, I will work to remove as much confidentiality as possible and continue to ask tough questions.

Arena / Event Centre

City Council also reviewed a new “term sheet” or “deal framework” for a potential contribution to a new arena/Event Centre.

Thank-you for your many hundreds of phone calls, emails, and letters regarding the issue. I so appreciate the many of you who have taken the time to attend our town halls to discuss this and other issues.

On this issue, I have heard from Calgarians that they are interested in the City engaging in arena negotiations and keeping the lines of communication open. I also heard varying opinions on whether the City should financially invest in a new arena or Event Centre, and to what level.

Many are opposed to a financial commitment, while others feel a renewed Rivers District is vital to our city. Based on what I heard, I think a new arena is important for Calgary but it needs to be at the right price – and most importantly, the public must have a chance to review the details before Council proceeds. Calgarians must also be able to clearly understand how much money is being put in, and what is coming out of it.

Therefore, in reviewing the term sheet, I applied the principles I have publicly committed to:

  • ensuring good value for taxpayer money,
  • if an investment from the city is required, mandating an ongoing revenue stream or return on investment,
  • Council must be transparent as to the source of any public funds,
  • any potential deal must involve public consultation prior to approval; and
  • pursuing this opportunity cannot increase the tax burden facing businesses and Calgarians.
I do not believe the deal framework discussed by Council satisfied those commitments, therefore I voted against it.

It weighs on me heavily to think of the economic hardship facing everyday Calgarians, as well as the risk that remains on the horizon. Our focus needs to be tax relief for every business that is struggling to make it in Calgary today, rather than a particular business or a theoretical new business and residential district.​​​

Categories: Newsletter

This content represents the personal views and opinions of the Ward Councillor and should not be taken as a statement of policy of The City of Calgary. The inclusion of any external content does not imply endorsement by The City of Calgary.​