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.
Monday, October 26, 2009
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.
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.
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.
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:
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.
“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.
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.
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?
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?
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