Posted Mar 31, 2008, 2:27 PM
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Join Date: Feb 2007
Location: Uptown, Saint John
Posts: 1,686
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Quote:
Flurry of projects means tough decisions ahead
Development Holding city's tax rate could require cuts in jobs and services
JOHN MAZEROLLE
TELEGRAPH-JOURNAL
Published Monday March 31st, 2008
Appeared on page C1
SAINT JOHN - Buildings will be built. Pipes will be laid. Sports fields will be improved. Water will be purified. There's a lot going on in the city of Saint John.
With so many public projects underway, will this May's newly elected common council have any wiggle room to make decisions with taxpayers' money?
Yes and no. There are lots of decisions to be made, but officials say holding the tax rate could require cuts in jobs and services or delays in some of the projects.
City manager Terry Totten said that if the next council decides to hold the tax rate, "we'd have to have the discussion: Where do you want to have fewer people and fewer services?"
The city's plans include harbour cleanup and the improvements to drinking water (paid for through water bills), as well as a new police headquarters, a parking garage, a public space, a new Saint John Transit headquarters, and refurbishments to the Canada Games Stadium (paid for through property taxes). There are also plans for continued development of the waterfront and Harbour Passage West, redevelopment of Rockwood Park, an initiative to renovate the Saint John Trade and Convention Centre and hopes for a multiplex. Then there are the usual costs of cars, roads, building upgrades and smaller investments in recreation.
All told, the city would borrow approximately $221 million from now to 2012 if it moved forward with everything it wants to do. Debt can eventually hit taxpayers' wallets, which is why lots of projects can get people antsy in the city with the highest tax rate in New Brunswick.
When a new council is sworn in this May, a city that keeps growing could save council from the toughest choices. But if the upswing doesn't go as hoped, council will be starting at a number of unpleasant options - a tax increase, service cuts, job cuts or a delay in projects.
Finance commissioner Greg Yeomans discussed a document with council in secret last summer that projected a combined 14-cent increase in the tax rate over the next council's term - an approximately eight per cent increase to homeowners' bills. But Yeomans stressed recently that the numbers are only projections based on a conservative financial outlook.
He noted, for instance, that the 14 cents included a 3.55-cent increase in 2008, which didn't happen because the actual numbers were better than the projections.
Yeomans has also projected a potential three-cent increase in the tax rate because of the north of Union development.
Nathalie Godbout, chairwoman of the Saint John Board of Trade, said the board's support for the north of Union Street development is contingent on a steady tax rate. "The board of trade is going to be keeping an eye on the bottom line," she said, adding that Yeoman's information "has to be fleshed out."
Yeomans said council will always have the option to stop these projects because most haven't reached the tender phase: only harbour cleanup is well underway, and the new bus depot has to get underway because the transit commission has sold its current site.
Unless the next council is more penny pinching than the current one, most of the projects are likely to get the go-ahead.
Even Coun. Stephen Chase, arguably council's most fiscally conservative voice, still supports most of these projects as part of "essentials for a livable city."
He says the real opportunity to save money is on the operating side.
"If we clearly identify that capital projects are a priority, what are we prepared to do on other operating costs?" said Chase, who has pushed consistently for partial privatization and contracting out of services.
Bob Manning, head of the so-called Benefits Blueprint meant to deal with rapid growth in Saint John, says he supports the city's public projects as necessities in a city that will soon have more than 5,000 temporary workers because of projects such as a second oil refinery, a second nuclear reactor and the liquefied natural gas terminal.
Improving the infrastructure will be key to attracting and retaining workers, Manning said. And timing is key.
"The longer we wait on these things, the more expensive they're going to be," he said.
At the same time, Manning believes the economic upswing will be enough to avoid a tax hike.
"I truly believe we can do this without raising taxes," he said.
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Why is the TJ so anti-development sometimes? Wouldn't the logical thing to do, be to call for municipal reforms to reduce the wasteful, or overlapping operational spending within the city, rather than stifling development or laying off employees, which could eventually lead to an increased tax-base?
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