As a Councillor at Large for the City of Thunder Bay and Vice-Chair of Finance, I strongly believe that accountability and transparency of action should be the guiding principles for everything we do as elected officials.
The recent events in the world’s financial markets are a stark reminder that complacency and good intentions alone do not protect the interests of the taxpayers and working families.
Financial issues at City Hall
Before I even start on addressing some financial issues at City Hall, I want to make it clear that I have the greatest respect for my fellow councillors’ right to their views and opinions, and the professionalism by which our administrative team, and employees serve the citizens of this great city of ours.
Thunder Bay continues to experience many economic challenges, but I believe that we have the creativity and pioneering spirit to overcome them and prosper.
The vision and diligence of many individuals and organizations over the years has enabled us to diversify the economy sufficiently to weather some very difficult times in forestry, manufacturing, and related industries. To some extent, I believe that it is the strong desire to do good and create even more opportunities that at times Council is willing to take what I believe to be some unnecessary risks, and make some unwise decisions.
Municipal governments do not belong in the stock market
The first one was the split decision (7-6 vote) earlier on this year to invest $5 million into equities. I strongly objected to that on the basis that even if the stock market did not pose the risk that unfortunately we have come to witness recently, municipalities should not gamble with taxpayers’ money.
I am fully aware of the arguments posed by those who favoured this move, that in the long-run equities provide a higher rate of return than bonds and treasury bills. However, the possible benefit of getting a slightly higher return does not warrant the risk of losing a good chunk of our investment.
If we really want a higher return on taxpayers’ dollars, let’s make sure that we run our city operation in the most effective and efficient way possible, and that we upload to the provincial government those social services that belong to them and not the property tax payers who have reached their capacity for more tax increases.
Waterfront Development
We all want it, but do not necessarily agree on what it should look like. The waterfront committee spent a tremendous amount of time going over all possible options and have presented to Council and the public what they believe to be the most viable.
Even though I had some misgiving I supported the vision on three conditions:
1)Matching government funding;
2)Any changes in budget to come before Council so that we could control the process; and
3)To acquire the necessary lands so that there would be another access point from the Central Avenue overpass and create a link to the rest of the waterfront (trails, walking path, etc.).
While our administrators are diligently working on all three the Skateboard Park coming in at double the budget within one year and still being approved, indicated to me that those conditions do not mean much.
The process seems to be controlling us and not the other way around.
My most recent concern and objection on moving ahead on the $4.5 million detail design before having an agreement in place, or any kind of matching funds, is also predicated on the key point that everything is contingent on the private sector.
If for whatever reason the developers have to pull out (banking and credit conditions are deteriorating every day and so far we only have a letter of intent from a Bank to extend the necessary financing to them) the matching funds from the higher levels of government would not be there and the city would be left to absorb all expenditures to-date.
The problem with such scenario is that this particular project requires the city to move forward with some major expenditure in detail design, environmental remediation, and infilling of the marina to prepare the lands on which the development would occur.
This is a very risky proposition. If anything goes wrong, the city could be left with a twenty plus million dollar bill on something no one wanted, needed, or would even entertain on its own (i.e. a Marina expansion). Even if we move forward, one has to question the huge cost of preparing land and infrastructure and then only recover part of this cost (it could be considered an investment which implies a risk vs. return proposition).
While everything may still work out ok, the developers have shown their commitment and ability to do the job, and would only pull out if forced by events beyond their control, the apparent unwillingness of most Councillors to exercise fiscal prudence on this project in these troubled times when our net debt has now reached over $120 million (Total debt of $230 million less over $110 million in reserves for various project and other commitments) and we are faced with escalating tax increases, requires that I state my objections and concerns openly and clearly and seriously re-consider my support for this venture as proposed.
Other options
We have other options to develop the waterfront. We own Pool 6 and we badly need a convention centre and a multiplex/arena.
An attached hotel would be a natural addition along with a proper pier for docking by cruise ships. I believe that we would easily attract one or more private sector developers, including local investors, and matching government funding on a less risky and controversial project.
The environmental remediation would be minimal, the construction and other jobs would still be there, and the influx of people to the waterfront would occur year-round. We would still meet our desired objective of helping the downtown, and we would unite the city by creating a win-win solution and even more opportunities for the future by devoting some time and energy in trying to bring passenger rail back to this region with an obvious obligatory stop at the CN station.
Frank Pullia
Councillor at large
Vice-Chair of Finance and Chair of Audit Committee
