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:

• Low Debt - Atchison doubled Saskatoon's debt.


• Lots of Cash in Reserves - Atchison bled dry Saskatoon’s rainy day fund.


• Strong Operating Performances - On Friday, the Frontier Institute reported that Saskatoon scores the worst in providing data to even properly assess performance.


• Generally Good Conservative Management - You be the judge.

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.

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.

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.

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.

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?

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.

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.