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.

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