How Deep is the Debt?
By Ben Meisner
Wednesday, October 26, 2005 04:01 AM
All the people of this city want to know is just how much money do we owe?
We know that our budget is about $110 million, that we paid $11.2 million in debt servicing costs in 2004, but the questions remains, just how much money do we owe?
The question was first raised by Councilor Dan Rogers, and again by Councilor Brian Skakun.
The report from the Finance Department talks about how much money we could borrow based upon a certain interest rate, it does not say diddly squat about what we owe.
Interest rates have been at historic lows, history says they will rise and fall. The Statement says the current cost of servicing the debt is $13.9 million., and we would be able to finance $100 million in additional debt based on a 20 year debt at 6%.
I don’t care what the payments are on our city "house", how much money do we owe on the place? Plain and simple.
Does the final figure include the $27.5 million (including $9.5 million for a heating system down town) the City just approved ? Does our debt include our share of the sports center at UNBC? Does it factor in any other money that we are about to borrow ?
When you get your credit card at the end of the month do you simply look at the payments you're making and then say to your wife, "Gee! , we can afford higher payments let's go shopping"? Or, do you (like the rest of society) say, here's how much we spent, here's how much we owe, here's how much we have left on the card?
We do know that our debt ratio is high, higher than other similar municipalities. What we don’t know is what that figure is.
No smoke and mirrors please, just the simple facts …
I’m Meisner and that’s one man’s opinion.
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