Thursday, January 19, 2006

What about the potholes and the soaring debt?

The mechanic shortage is reaching epic proportions here in London Ontario, yet today the Free Press reports the expected 'surplus', discussed by Mapmaster here and here, is about $9 million. And not only has the city collected a reported excess of loot, also from today, we learn that taxpayers in London are among the highest taxed in the country.

The wallets of London homeowners were among the hardest hit in Canada last year, a study shows.

Of 24 cities examined across the country, London homeowners fared second worst when the costs of municipal property taxes and utilities were added, according to a study by the city of Edmonton.

The study compared, in each city, property taxes and utilities for 25- to 30-year-old bungalows with three bedrooms, a 1,200-square-foot main floor, a 6,000-square-foot lot, a double garage and a full, finished basement.

The tab for such a house in London was $3,814 -- $635 more than the cities' average and $1,391 more than the least costly city, Medicine Hat, Alta.

Only homeowners in nearby Hamilton fared worse.

[..] Londoners are more hard-pressed to pay their tax bills because average household income here is less than the other Ontario cities.

[..] The 57-page study was received yesterday at a meeting of London's board of control. No board members commented on the report during the meeting.

But afterward, budget chief Tom Gosnell said the study shows London taxpayers are in a hole -- one from which, in the past two years, the city has begun to climb out.

"We blew out $400 million (on major projects) between 1999 and 2003," he said.
Gosnell fails to mention that each year the city incurs $30 million in new debt. Londoners should recall:
Council currently has a self-imposed $30 million debt cap in place for each year's budget — this means that they can add $30 million in debt each budget above and beyond any debt retirement made. Last year the city incurred $69 million in new debt after retiring $29.8 million. "Surplus" money used for debt reduction could then presumably be applied to this debt retirement, allowing an additional $8.7 million to be incurred as debt in the next budget, as long as total new debt does not exceed $30 million. "Debt reduction" then would not result, and has not in the past resulted, in reduced debt.
London taxpayers are in a hole and the city is falling apart because of irresponsible and extravagant spending by council. The property tax rate is also a huge disincentive for those who might otherwise considering moving here, like doctors for example, which helps to explain why the average income here is less than many other cities in Ontario.

Readers not residing in London might think that council would use a good portion of the 'surplus' loot to reduce the debt and ease the taxburden on Londoners. Not so. This is London Ontario, the home of the JLC:
After yesterday's board of control meeting, budget chief Tom Gosnell said the projected surplus was close to $9 million.

Some of that might go toward a new initiative that appeared to garner support yesterday.

The North London Optimist Community Centre, already slated for fixes totaling $2.3 million, also needs $750,000 to replace its roof.

While capital requests for other projects have failed to garner support, senior managers looked differently on this one, even suggesting the extra money might be diverted from cash previously earmarked for what has been a cornerstone of the administration's approach -- debt reduction.

[..] Council members said they've been flooded with concerned calls from Londoners, many of them seniors.

"The administration is very sensitive to the issue," said chief administrator Jeff Fielding.

The board recommended setting aside $100,000 to equip council chambers and offices with laptops and wireless connections.
Presumably, the new laptops will enable staff to spend more time in the city cafeteria.

2 comments:

Robert McClelland said...

we learn that taxpayers in London are among the highest taxed in the country.

Gawd, what a junk report. Property taxes are based on the assessed value, not the square footage. And I've noted that London has higher than average real estate prices. Trust me on this, I just spent 3 months looking.

MapMaster said...

Undeniably true, and it suggests that Londoners have a wealth of untapped assets at their feet in the form of property values. However, the essential finding of the report, as far as London goes, is that city hall requires more money from its property owners to conduct its business than other cities. At the same time, London has a higher per capita debt than many other cities and arguably delivers poorer services. Major capital projects, funding of special interests, and a bloated and inefficient bureacracy have made it expensive to own property in London regardless of the property's value.