Monday, October 26, 2009

Big-Spending Atchison closes in on Saskatoon’s legal debt limit

By law, Saskatoon has a debt ceiling. It’s $298 million.

This limit was not a concern before Mayor Atchison came to power. Saskatoon’s civic debt stood at $27 million: 9% of the legislated debt ceiling.

But big-spending Mayor Atchison has driven Saskatoon’s civic debt up to $156 million: 52% of the legislated ceiling.

And Atch isn’t stopping there. His shopping cart is filled with over half a billion dollars in projects. It includes a $300 million bridge, $100 million police station, $50 million library, $8.5 million transit terminal, and of course his infamous $58 million art gallery nobody asked for.

Oh - and Atch has also promised big spending in north downtown.

But there's a problem. The city can only legally borrow $142 million more.

This means that even with other levels of government chipping in, it is likely that Mayor Atchison is going to have to ask the province's municipal board to jack up Saskatoon’s credit limit to continue his spending spree.

And when jurisdictions lobby for increases in legislated debt limits, Standard and Poor’s takes notice. Their credit rating analysis process includes the stipulation that "Debt limits imposed by national and/or supranational legislation are respected." There goes Mayor Atchison's highly-touted AAA credit rating.

Saskatoon is entering into a tenuous financial situation.

And given Atchison's record on financial management of past development, voters should be wary: River Landing alone morphed from a $35 million development into an $82 million black hole. What will Atchison's next half a billion of spending mutate into?

Saskatoon needs to ask if Mayor Atchison can be trusted to prudently spend over half a billion dollars more.

Friday, October 23, 2009

Atchison hides behind stale-dated credit rating

Mayor Atchison likes to tout Saskatoon’s AAA credit rating.

However, that was last year's rating. And a year is a lifetime for big-spending Mayor Atchison.

In the last year alone Mayor Atchison nearly doubled Saskatoon’s civic debt, from $89 million to $156 million.

This of course is typical of Atchison's out-of-control spending. Since he was elected, Atch quadrupled Saskatoon's interest charges, sextupled the public debt, and ran four consecutive deficit budgets. All while raising taxes at a rate 50% above inflation.

Yet Atchison is still itching to spend more, such as his $58 million art gallery nobody asked for.

What does all this mean for Saskatoon’s AAA credit rating?

In an interview with the Globe and Mail, Standard & Poor’s credit analyst Stephen Ogilvie said the keys to strong municipal credit ratings were “low debt, lots of cash in reserves, strong operating performances and generally good conservative management.”1

Let’s quickly review Mayor Atchison’s fiscal management for 2009 against this criteria:


When credit ratings go down, borrowing costs go up. And when borrowing costs go up, taxes rise.

A new credit rating is coming. And things aren’t looking rosy for Atchison’s debt-laden Saskatoon.


1 Tavia Grant. (18 March 2004). S&P rates Canadian municipalities tops. The Globe and Mail, B11.

Monday, October 19, 2009

Atchison's $12 million interest payment

What did $12,127,700 buy Saskatoon in 2009?

Absolutely nothing. Except debt servicing charges.

You see, Mayor Atchison has been spending more than Saskatoon has. A lot more. And the interest charges are racking up:

Year / Total Debt Servicing Charges
2003 - $3,259,000
2004 - $4,238,800
2005 - $4,493,900
2006 - $4,954,200
2007 - $5,348,000
2008 - $7,593,000
2009 - $12,127,700
Source: City of Saskatoon operating budgets, 2004-2009

Under Mayor Atchison, Saskatoon’s debt servicing charges have grown to 12 million dollars a year: 10% of the city’s total property tax take.

This means that with 54,000 owned dwellings in Saskatoon, every home property tax bill could be $200 lower if it wasn't for servicing Saskatoon's burgeoning debt.

And your $200 interest payment doesn’t even put a dent into that $156 million debt hole Mayor Atchison has dug Saskatoon into.

And while this may seem troubling, the future is looking worse. With interest rates currently at historical lows, even if Atchison stops his mad spending spree - which is doubtful given his future plans such as a $58 million art gallery nobody asked for - Saskatoon's debt servicing charges are going to get a lot worse. And tax bills a lot higher.

Friday, October 16, 2009

Atchison prepares to blow $58 million on art gallery nobody asked for

At the first mayoral debate of the civic election, Mayor Atchison attempted to defend his out-of-control spending that has buried Saskatoon in a $156 million hole of debt:

“I find it quite amusing when people talk about spending on projects ’cause they think they can do a better job of it. I’m always curious to know what people would leave behind. Would you leave housing behind? Would you leave transit behind? What would you leave behind?”

Seeing that he asked, perhaps one could begin by looking at Atch's $58 million plan to close the Mendel Art Gallery.

In the 1960s, patron of the arts and self-made business person Fred Mendel contributed a substantial portion of the costs for an art gallery in Saskatoon, then donated 13 Group of Seven paintings to the city's new gallery.

After 40 years, the Mendel outgrew its space. To meet current and future needs, a $24 million expansion plan - approved by the board and original architects - was put forth.

However, this plan wasn't acceptable to Mayor Atchison. He wanted to spend more.

Thus, our mayor went to work undermining the Mendel board’s authority, jerry-rigging federal funding priority lists, and misleading the public.

Then, on September 23rd, Atchison announced his $58 million art gallery that nobody asked for, to be built at his mostly-empty $82 million River Landing development.

So in answer to the mayor's question, perhaps the first thing that should be left behind is The Mendel: Right where Fred Mendel intended it to be for all time, and for less than half the price.

After all, Fred Mendel put up his own money and his own art to create a legacy for Saskatoon.

Don Atchison is just wildly blowing through taxpayer money to build his.

Wednesday, October 14, 2009

Big-spending Atchison raises taxes 22% yet can’t afford recycling

The StarPhoenix reported yesterday on the deplorable state of Saskatoon’s recycling. Saskatoon and Regina are the only major centres on the continent without a blue box recycling program, and our landfill is filling up.

But Mayor Atchison rejects city recycling, claiming it would be a formula for increases in homelessness and taxes on seniors.

Of course, the story and the subsequent reader comments reveal Atch’s anti-recycling stance to be laughably rife with economic and environmental folly.

But even more laughable is Atchison’s audacity to champion homelessness and taxes: Under Mayor Atchison, not only has homelessness expanded, but taxes have risen 50% faster than inflation.

Given big-spending Atchison’s embarassing inaction on recycling and homelessness, combined with his out-of-control tax hikes, this newfound concern is suspect at best.

Tuesday, October 13, 2009

Renege on a parking ticket? Atchison wants your car impounded; Renege on a $4.5 million loan? Atchison grants you extensions.

If you have unpaid parking tickets, Mayor Atchison wants your car impounded.

Unpaid property taxes? The penalty is 1.25% per month for the first six months, and 1.5% per month thereafter.

However, if you owe the City of Saskatoon 4.55 million dollars and you don’t pay the interest or meet the loan payment date, you’re in luck! Mayor Atchison will happily give you extension after extension.

That’s exactly what he did for Lake Placid Developments, the Calgary-based developer that twice missed payment dates on what was essentially a 4.55 million dollar loan bankrolled by Saskatoon taxpayers.

Atchison’s solution... Another extension.

Perhaps Mayor Atchison should spend a little more time worrying about collecting the 4.55 million dollar bills, and less time worrying about the 10 dollar parking tickets.

After all, Mayor Atchison is going to have to collect on 455,000 parking tickets to cover Lake Placid’s bill.

Saturday, October 10, 2009

Atchison's tax increases outpace inflation by 50%

It's no secret that Mayor Atchison didn't hold the line on taxes.

However, big-spending Mayor Atchison has been an utter failure at even holding his tax increases to the rate of inflation.

Year - Inflation(%) / Tax Increase(%)
2004 - 2.1 / 3.24
2005 - 2.3 / 3.94
2006 - 2.2 / 1.86
2007 - 3.4 / 4.76
2008 - 3.9 / 5.44
2009 - 0.7 / 2.87

Add those increases up, and you’ll quickly realize that under Mayor Atchison, Saskatoon’s property taxes are rising 50% faster than Saskatoon’s rate of inflation.

Skyrocketing taxes. Unfunded deficits. Burgeoning debt.

Just what kind of "Businessman" is Mayor Atchison?

Thursday, October 8, 2009

Atchison’s “goal”: Dupe voters through crafty words

On October 17, 2003, The StarPhoenix reported that Don Atchison “would freeze civic taxes in the first year.” In fact, Saskatoon’s media widely reported Atch’s no tax increase platform during the 2003 election campaign.

Of course, we all know how well that turned out:

Year / Tax Increase
2004 - 3.24%
2005 - 3.94%
2006 - 1.86%
2007 - 4.76%
2008 - 5.44%
2009 - 2.87%

That's a combined mill rate increase of 22.1% under Atchison.

More interesting is how Atchison later justified his tax increases:

“I didn’t promise that. I said it’s my goal.”
as quoted in The StarPhoenix, January 22, 2004


“A goal is something you want to aim for. A promise means I’m going to be able to fulfill that promise to you… I was careful never to use the word promise.”
as quoted in The StarPhoenix, March 12, 2005

Regardless of no tax increases being a “goal” or a “promise,” did anyone at the time hear Atchison jump up to correct this common interpretation of his election platform?

Thus, it would seem most prudent for voters to make it their “goal” to listen carefully to Atchison’s forthcoming “promises.” And to be safe, bring a dictionary.


Sources:
Nickel, Rod. (2003, October 17). Making a good city great: Mayoral hopeful Peter Zakreski promises changes. StarPhoenix, p. A3.
Nickel, Rod. (2004, January 24). Taxpayers face annual hike. StarPhoenix, p. A3.
Nickel, Rod. (2005, March 12). Property tax hike will sting: Increase could be seven per cent. StarPhoenix, p. A1.

Wednesday, October 7, 2009

Mayor Atchison vanishes while provincial government pulls $8 million from Saskatoon’s economy

When the provincial government - flush with the billions in resource revenues - yanked 8 million dollars from Station 20 West last March, where was Mayor Atchison?

It seems that Atchison, who proclaims to be “Ensuring all neighbourhoods benefit” under his leadership, virtually went into hiding. At least in the StarPhoenix.

While the public actively engaged in debate regarding Station 20 West’s merits, not Atchison’s name nor his opinion appeared in a single StarPhoenix story regarding the 8 million dollar pullout. Peculiar, as Mayor Atchison was more than happy to glad-hand at Station 20 announcements prior to the funding being pulled.

Even more peculiar, while the StarPhoenix couldn’t find Atchison, Planet S Magazine could.

Perhaps there is a clue to Atchison’s whereabouts on his re-election website. There he trumpets that he is very busy “from early morning breakfast meetings to meeting citizens at banquets.” Apparently with all these breakfasts and banquets, “The People’s Mayor” has no worries about access to basic good food. Unlike those relying on Station 20 West's construction.

Atchison’s name finally surfaced on page A12 of the StarPhoenix on April 18th, 2008. That’s when an op-ed piece by Steven Lewis, adjunct professor of health policy at the University of Calgary and Simon Fraser University and president of Access Consulting, revealed:
Mayor Don Atchison was never a big supporter [of Station 20 West] and, if he is ever up for a fight with Regina, it won’t be over this.

So when the provincial government pulled millions out of developing Saskatoon’s poorest neighbourhoods – with a corresponding impact on economic activity in the local construction sector – why did most of the the public have to wait weeks to get a glimpse of our pro-development mayor’s stance?

Where exactly was Mayor Atchison hiding when Saskatoon needed leadership?

And for that matter, why was the StarPhoenix not looking for him?

Monday, October 5, 2009

StarPhoenix sounds the alarm regarding Saskatoon’s “seriously depleted” finances

When the StarPhoenix editorial board – traditionally a supporter of Mayor Atchison’s initiatives – sounds the alarm regarding Saskatoon’s significant deficit, you know things must be bad.

Perhaps the most frightening revelation in today’s StarPhoenix was this:
the city's revenue stabilization reserve, along with the other reserves that long have been a benchmark of the kind of prudence that had earned this city recognition and the highest-possible credit rating for strong fiscal management, have been seriously depleted in recent years, leaving little wriggle room.

While the StarPhoenix editorial attempts to spread the blame across city council for this serious financial mismanagement - a somewhat fair proposition - there has been only one man at the helm while Saskatoon’s finances fell apart: Mayor Don Atchison.

After all, a quick check of Atchison’s website will reveal that he is prepared to take credit for virtually everything that has happened in Saskatoon since he was first elected, from River Landing right down to pet spay/neuter programs.

But with no mention of Saskatoon’s burgeoning debt and depleted reserves, Atchison does not appear prepared to take responsibility for city finances.

Here are the indisputable facts:
• The city manager has confirmed that Saskatoon is running a “substantial” deficit, but cannot release the details until council meets, after the civic election
• Saskatoon’s “Rainy Day” cash reserves have been bled dry under Atchison’s leadership
• Saskatoon’s debt has increased six-fold since Atchison took office

And here’s the corker. In addition to blowing through Saskatoon’s reserves to shore up three deficit budgets in a row, property owners have faced a combined mill rate increase of 22.1% since Atchison took office.

Taxes up. Debt up. Reserves depleted.

That's Saskatoon's "Businessman" mayor.

Friday, October 2, 2009

City facing “significant” deficit, Rainy Day fund completely drained under Atchison’s leadership

The StarPhoenix reported today that Saskatoon is facing a “significant” deficit for 2009.

And who’s to blame? According to the story, none other than Mother Nature. Too much rain and too much snow has caused water revenues to shrink and snow removal expenses to grow.

That water revenues are shrinking seems peculiar, given Mayor Atchison’s “run your tap at full blast for five minutes” solution to Saskatoon’s lead-tainted water problem.

However, more peculiar is Saskatoon’s snow removal budget. In the past three years, it has been out by well over three million dollars.

Guess what? It snows in Saskatoon. Why hasn’t Mayor Atchison figured this one out?

So how will the city cover this deficit?

In past years, the city has been backfilling Atchison’s perpetual black hole by blowing through reserves. This year, the StarPhoenix reports, it can do this no more:
In 2007 and 2006, the city posted deficits of $1.4 million and $1.8 million, respectively. Last year, the deficit was $1.24 million, officially draining the city's revenue stabilization reserve.

To clarify: Mayor Atchison has burned through the city’s “Rainy Day” fund. This leaves a tax hike as the only solution.

Mayor Atchison is spending more than Saskatoon has. And taxpayers are going to foot his bill.

Thursday, October 1, 2009

Atchison blows through a quarter-billion dollars on capital expenditures, ignores lead-tainted water

If the neighbourhood in which you live was built before 1949, you would be well advised to have your water tested for lead.

You see, Saskatoon has a lead-tainted water problem: A problem requiring the replacement of water pipes leading into no less than 6700 homes.

And with Mayor Atchison having found nearly a quarter of a billion dollars to blow in the city’s capital budget this year (compared to $68 million in 2003), it would seem there’s plenty of money to help citizens replace these toxic pipes.

Apparently not.

Instead, the city’s solution: Run your water at full blast for five minutes before taking a drink.

So while running water down the drain for five minutes for fear of lead poisoning, use that time to think about where Mayor Atchison’s quarter of a billion dollar capital budget went.

Because it didn’t go into sustaining key infrastructure in Saskatoon.

Wednesday, September 30, 2009

"Canada's Craziest Mayor" roots on Canada's Craziest Condo Craze

Seniors, students, and countless other Saskatoon renters began to get evicted from their rental homes in 2007 as Saskatoon's Condo Craze commenced its short-lived mayhem. During this period of out-of-control development, what kind of leadership did Mayor Atchison provide the city?

When the provincial government first offered to help Saskatoon deal with the situation, Mayor Atchison declined.

When Saskatoon’s rental vacancy rate plummeted to 0.6% in late 2007, the city carried on with approving condo conversions.

When urban planning experts sounded the alarm that Saskatoon’s condo conversion policy was not based on any valid research, harmful to citizens, and starving businesses of key workers, the city continued to approve condo conversions.

When city administration warned that it would not be legal in many other Canadian cities to allow tenant evictions the way Saskatoon did, the city still continued to approve condo conversions.

When desperate seniors ran out of options and took the city to court to save their rental homes, the city fought them while still carrying on with approving condo conversions.

In the end, under Atchison's management of this crisis every single condominium conversion was approved while the city unsuccessfully tinkered with various policy revisions. Ultimately, 1700 rental units were taken off the market for conversion.

Today, Saskatoon's condo market is glutted with unsold conversions and prices are depressed. Meanwhile, stories surface of hastily-slapped together conversions crumbling before their new owners' eyes.

Atchison's billboards proclaim that "Experience Counts." For many uprooted renters and burned owners, Atch's leadership on condo conversions has been an experience they count as something hopefully never to be repeated.

Tuesday, September 29, 2009

Experience Counts: right up to 156 million

Don Atchison’s mayoral campaign billboards boast that “Experience Counts.” Apparently with Atch’s experience, one needs to learn how to count quite high: 156 million, to be exact.

Why 156 million?

That’s Saskatoon’s civic debt forecast for 2009: 156 million dollars.

Compare that to $27 million - Saskatoon’s debt before Atch took office. Basically, in six years Mayor Atchison has grown Saskatoon’s debt sixfold. And with extensive River Landing cost overruns this year, that 156 million dollar forecast is likely low.

Atch is right: Experience counts. Now where’s his plan to count backward and pay his mess off?