Thursday night’s Mayoral debate highlighted, for me, a lack of understanding of how fortunate we are as a community from a financial perspective. I’m not trying to single out a candidate, simply pointing out something I felt was an inaccurate characterization of Chilliwack’s financial position.
The contention by the candidate was that Chilliwack’s history of aversion to long term debt was somehow a bad thing and that “pay as you go” was a bad model. I understand the reasoning put forward – by the time you save the money for a project, it costs more, however, the argument fails to understand that having a 10 year (instead of a typical 5 year) capital plan means that you are (hopefully) planning for the infrastructure before it is required. The theory is that when you need the infrastructure, you have the money. The “additional inflationary costs” from waiting (as claimed by the candidate) are more than accommodated by the interest occurred while saving. Instead of tax money paying off debt, it gains interest.
My experience tells me that most cities fall behind in some types of infrastructure and strategic, short-term debt can be an effective tool, if used wisely. There are many examples of Chilliwack using short term borrowing for public utilities and infrastructure. As well, public – private partnerships (which is simply debt of a different kind) can provide an alternate delivery method as was done with the Prospera Centre.
Chilliwack has a water and sewer utility which is debt free with healthy reserves, an excellent long term park and trails strategy, world class public amenities including many that are regarded as “best in BC”, and no debt. What is the price we pay for this approach? Low taxes.
I recall nine years of conversations with other communities, all of whom marvelled at Chilliwack’s visionary approach to planning and debt, supported by comprehensive, 10 year (vs five year) planning cycles. Other communities, like some of our neighbours, are swimming in debt because the community didn’t have a good, long term capital plan. This community has shown financial restraint and is the envy of most, not an outlier.
If the system is breaking down and infrastructure is falling behind, it requires better planning, not bringing in long term debt. If the City has moved away from 10 year capital planning, it should move back. Just my (somewhat) informed opinion.
(happily) Retired Mayor