Council Agrees to Scoop $1.9 Million from Local Improvement Reserve for Roads
Tuesday, June 12, 2012 @ 4:01 AM
Prince George, B.C.- City Council for Prince George has agreed to dip into a reserve fund to fix more roads in the City.
Councillor Lyn Hall called on his Council colleagues to pull $1.9 million from the Local Improvement Reserve and they unanimously supported that call.
The head of Financial Services, Kathleen Soltis says if the money is taken from the reserve fund, there is no legal requirement for Council to repay that fund, however, it is recommended Council do that. It is suggested funds from the sale of lands be used to "top up" the reserve.
This is money that was being set aside for the 4th Avenue Reconstruction project which is estimated to have a total cost of $7.5 million dollars."It is clear that project has ballooned to a point where it is no longer a Council priority" says Mayor Shari Green.
There is $2.3 million sitting in that reserve and Council has approved moving forward to pull $1.9 million from that reserve and transferring it to road rehab, but the city would have to get permission from the Inspector of Municipalities in order to access those dollars.
The 4th Avenue project has been delayed for several years, as it was to have been done following the upgrades to 3rd Avenue which were completed nearly 9 years ago.
Council also approved the list of extra projects which are top priority for those extra dollars:
Ospika Blvd from Range to Davis $453,000
Ospika Blvd from Davis to Tyner $473,000
Foothills Blvd from North Nechako to Foothills Bridge $550,000
Tabor Blvd from 1st to 5th $417,000
The contractor has already assured staff that the named projects could be added to the workload for this year, and will be done before the end of the paving season.
Comments
Rob Peter to pay Paul. It’s how I have to manage my finances occasionally. It was the right thing to do in this case…
How many have noticed the paved yuppie trail up Tyner, well more pothole pavement will soon be dumped there to finish the upper part of the “trail”
“Yuppie”? Welcome to the 80’s!
I have to wonder about this decision at this time of the year. It is a no brainer that council should be putting more money in the budget for our roads (which is why freezing the road budget in January made no sense) but by dipping into reserves instead of doing this when the budget was discussed months ago there are “costs” not mentioned.
That $1.9 million they are taking out of reserves was generating revenue through investments so by spending it now they will forego any interest that it was earning. So the cost of this decision is probably about $75,000 annually of lost interest which would have helped keep future taxes down or pay off debt.
If they had made this decision duing the budget discussions they could have increased the budget then and left the reserve alone. The knee jerk reaction shows the inexperience of this new group and has a price tag of $75,000-$100,000 of lost revenue.
That is almost as much as the raise Mayor and Council awarded themselves this year while telling everybody else to tighten their belt.
Another unsustainable solution to a problem that is just a band aid on a gaping wound.
I’m not impressed at all.
Lyn Hall to the rescue. I know who our next mayor is going to be!! Go Lyn go!!
I agree with your comment Mitch2. Where were these raise-worthy people earlier this year? Its mid June and the snow flies in, what, maybe 4 months? How much road work is going to get done this year, leaving how much more deterioration and cost for next year?
Ah but let’s have another photo op, shall we.
Mitch, the paving material costs are escalating faster than the interest rates for money invested. Apparently 14%/year over the last few years …. if you put in the increase for labour it will likely drop down to around 9 or 10%, still at least twice as high as what one gets for interest.
In a case like that, money sitting in a reserve is actually costing us money instead of saving us money for two reasons:
1. a road that does not get repaved in good time will start to cost more work and material as it deteriorates further and further, eventually getting into the subbase and require a full rebuild job.
2. the ependiture now instead of next year will save around 10% minus the lost opportunity for interest on the reserve funds.
yuppie …. you mean there are no more young upwardly mobile professionals around these days anymore?
LOL .. maybe in a few years we can’t be laughing out loud anymore either?
LMNAO … or laughing my naked ass off either????
;-)
gus: “yuppie …. you mean there are no more young upwardly mobile professionals around these days anymore?”
Gus, I’m sure there are lots of those groovy radical people around still. Gag me with a spoon.
JB:””Yuppie”? Welcome to the 80’s!”
Spam.
How old are you JB .. you must be confusing yuppies with hippies ….
A hip person is an aware person ….
a yuppie is a “me” person … you can see one of those on Council …. ;-)
Gag me with a spoon?
So you are a masochist, JB?
slow day in the neighbourhood … :0
Did anyone hear our mayors snotty snippit on the radio commenting on the fund not goin to be there next year? Not so professional at all.
gus: “…you can see one of those on Council”
I think more than one.
PG: “Spam.”
Someone doesn’t know what spam is. How cute.
gus: “Gag me with a spoon?
So you are a masochist, JB?”
That’s what I love about you gus. You can’t let anything go. I feel sorry for your wife if you are married. ;-)
oh: “Did anyone hear our mayors snotty snippit on the radio commenting on the fund not goin to be there next year? Not so professional at all. “
I did hear that. It reminded me of a parent scolding/warning a child. “You can have an ice cream cone now, but don’t expect one tomorrow!”
Gus I agree with your math but the point I was making was that Council should have considered all the implications of the business decision before making it. Did any of them ask the question? no.
The annual interest on $1.9 million is significant enough to consider in their decision making. If they had just made the obvious decision during the budget talks we wouldn’t be in this situation. While it might have pushed our taxes up slightly it would have avoided dipping into reserves. Hell we got a 4% tax hike anyway AND our roads are the worst they have ever been.
How many of them used that as their campaign promise last election? They might not have said it but that’s what gang-green delivered.
I do not put much into campaign promises. Most of them are not even half baked. To me they are like visions statements without the substance that is required to work on the implementation of projects and programs to get us to those visions.
I am totally unsure of why we expect people drawn from the population who have some inborn gift to pull the wool over people’s eyes to be effective decision makers. Sitting in a chair every couple of weeks and debating and evaluating gets us nowhere when the options put in front of them are often flawed and, more improtantly, incomplete.
From my point of view the presentation that was made to Council in some private session … and I would love to know a bit more about how many of such private sessions there are, unless it was during a committee of the whole session ….. was totally basic to road maintenance.
Now they want to put that on the internet, which is fine, to educate the general public.
Well, it still does not get us to solving the problems. In my mind Administration did not clearly present the real nature of our problem and provide a few scenarios of how to solve it.
Has anyone in North America solved the problem? Is anyone collecting enough taxes to take care of road infrastructure properly? Are others getting funding from other sources?
Council should not be coming up with suggestions such as …. “hey, why don’t we get some money from the sale of gas at the pump … or from money coming in from the resource base we live in …..
In my mind those should have been options explored a long time ago by the City Manager and his staff who should have connections with other communities and with Ministires of senior governments and, with the Mayor, have pursued all those avenues some time ago.
But hey, it’s never too late to start.
Listening and observing the body language of the presenters of that part of the meeting last night just did not give me the comfort of knowing that we have a few “can do” people heading up what may be the most important infrastructure program we have.
So right now we have no effective planning and no effective roads program …. how much more can we take of this lack of capacity.
Sorry, just my take on things. And if anyone wishes to counter it, just ask yourselves “why are we finding ourselves in this mess”. Then think a bit about it. I do not think that I and several others are out in left field.
“Did any of them ask the question? no”
Actually the question was asked of whether it would make sense to front end a larger portion of work whenever we can.
In my opinion it was a good question with a bit of the wrong emphasis on the chasing of precentage differentials which works on a one time basis, but will catch up on the next go around.
However, it would work on the project soize, or scope of the work. We are totally missing out on that aspect since the addtional work of $1.9 million is all goging to the low bidder of a $3.5 million project. In the normal construction industry, one would rebid the job with such a scope change. Of course, at this time of year, that is not the thing to do.
I would have gone back fiorst and done a bit more homework to find out from other firms in the south that if we were to have a total of over $5million in paving in 2013 whether that would interest them enough to bid on projects here.
It would not have worked for this year, but the money could have been earmarked for next year. It is still the same council members then.
The decsions makers did not have sufficient options available to them.
JB:”Did anyone hear our mayors snotty snippit on the radio commenting on the fund not goin to be there next year? Not so professional at all.”
I saw her explaining the same matter very professionally on TV!
When you cannot afford to pay a contractor to build you a sundeck what do you do? You build it yourself.
If the city needs paving done every year why do they hire contractors? Are they getting the best bang for the buck? How much of those pricey paving contracts turns into contractor profits?
Just asking.
I missed the next article, apparently PG contractor profits are at least 30% higher on the asphalt !! When XYZ store is over charging me I’ll shop elsewhere if I can.
The provincial government borrowed 1.9 Billion at 2.85% over 5 yrs a few years ago. Just about the same time the HST came in.
Don’t tell me we are losing this amount in interest on our savings. It is much less than that. If there was ever a good reason to borrow money is to rebuild our streets. One of the best investments we can make is in our infrastructure.
Want a hint where we should be investing our money over the next 20 years? How about all those companies who will be providing the products and services to rebuild our crumbling infrastructure all over North America.
The price of asphalt here is apparently 30% higher than in Kelowna, according to a staff report.
How much the profit difference is, who knows?
Since the paving period is shorter here, and since the amount to be paved is less here than in Kelowna … never mind maintenance paving, just look at new development paving in the Okanagan compared to here …. the margin between annual business cost (ovherhead) as opposed to project cost can easily make up for much or all of that 30%.
4 months of paving here versus 6 or more months of paving there with a similar annual overhead cost can certainly come close to making up that 30% difference.
I think you are on the right track, Chester!
The question is, where are we going to get the moeny from to finance that? and seniors care …. and health care ….
Nations manage to rebuild after wars, so we should be able to rebuild after inattention to our infrastructure …
No one will support our currency if they see we are not managing to take care of our own country … if they see we are able to pull out of a crumbling infrastructure, then they will have confidence in our ability to manage in adversity …
Then again, we might be in a location in the province and the country which has a lower standard than the average ….. THAT is what my fear is … to be left behind as a part of the country and the province which provides some riches which the lower mainland may add value to, but we do not get our due return.
THAT is what it is all about, isn’t it? Are we doing something wrong? Are we being poor citizens? What is it that we are doing that we deserve this kind of treatment?
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