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Originally Posted by Bunk
The motion is designed such that any leftover money is moved to long term flood mitigation. Future tax room beyond 2013 is still on the table for a Council decision.
It's been estimated thus far that The City may be on the hook for approximately 20% of the overall cost. The Province has advised the City it would be wise to set aside cash for its recovery effort. The experience in Slave Lake (who urged Calgary to set aside cash based on its experience) and other disasters have suggested that Federal and Provincial programs are highly unlikely to cover all the costs. Cash on hand also reduced bridge-financing costs.
Why not use our Fiscal Sustainability Reserve, one might ask? Well it sits at 11% of the budget while its target is 15% and its bare minimum is 5%. Tapping into that would require it to be replenished (which would end up coming out of taxes anyway).
As for tax room - it's not the result of "overpaid" money. It's the result of the Province requisitioning less than expected on their portion of the property tax after the City has already set the indicative tax rate. Actually, in years past through negotiation, the Province encouraged the City to take up any tax room to fund capital projects that the Province might otherwise fund. You'll notice Jim Stevenson voted for keeping tax room, because he was a key point-person as Calgary's representative on Alberta Urban Municipalities Association regarding tax room.
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Thanks for your reply, I do appreciate it!
I have to laugh at the province telling the city it would be wise to set aside money. I also saw Nenshis tweet saying that Rick Fraser thought it was prudent that the city set aside money to pay for things that the province otherwise would be. Its amusing, because I also think it would be prudent of my children to use their allowance to pay for things that I would otherwise pay for.
The issue for me isn't so much where the money will be spent in the longer term. I still have my doubts about the city being out $750M or more, even though that number has been bandied about. That might well be the total cost of the flooding, but like I say much of this will be insured, and then we have provincial and federal commitments which should cover the vast, vast majority of the final tally.
My issues around this are two-fold. First you say that we shouldn't dip into the reserve because its currently underfunded. Underfunded or not though, isn't that the point of a reserve fund? Its ear-marked for just such and occasion? I also recognize your point that its underfunded, but what was the plan to deal with that problem before this happened? Were there no plans to add to this fund and get it to the 15% mark prior to the flooding?
The point regarding the use of the $52M for me is that this wasn't the cities money to decide what to do with. If CRA gave me a tax refund for too much money and came back to collect it, they would never accept the reply that I've "found a better use for the money"...there is actually nowhere in the free world that would operate on that kind of premise. Do we need some flood mitigation strategies going forward? Sure. But cost them out, propose them and run through the correct process to get there. Instead, our elected officials found an overpayment by taxpayers (which you have used other words to describe, but it all amounts to the same thing!), and decided to keep it in one way or another. Maybe the taxpayer would've ended up paying that money right back in increased taxes next year, but the difference isn't the money from a taxpayers pocket. Its the process of how that is arrived at, and that is a significant difference.