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"Ever wonder if City Council is as contentious and chaotic as it is sometimes portrayed? Here you can get a progressive perspective on some of the issues from someone who spent four years in the trenches. Totally unbiased, though! Feel free to comment but keep it respectful, just like they do at council."

Sunday, June 9, 2013

Short agenda, long term consequences

It's not a long agenda facing council when it meets as the Strategic Priorities and Policy Committee on Monday, but the matters being considered are serious and of long-term consequence to the city of London and its residents.

Least controversial will be the single consent item, the matter of city support for nonprofit organizations. Some of this is ongoing since many of the city's social and cultural priorities are met by nonprofit organizations such as the Salvation Army, Orchestra London and the Grand Theatre.

But there are many other groups that, with a little bit of a boost, could deliver great value to the city by providing services and programs that would normally fall to the city—recreational programs, child care, shelters for homeless pets and people—that could do a lot more with a few extra funds from the city. That's what gave us the London Clay Art Centre (formerly the Potters' Guild) in East London.

It also helped to provide the expansion of the Byron Ski Club facilities and programs. Both are great examples of how municipal government can encourage nonprofit groups to provide economic stimulus and valuable services that would be beyond the pocketbook of the residential taxpayer or the community-minded resident working independently. It's what leveraging is all about.

Unfortunately, in the culture of zero tax increase championed by the mayor and adopted by a majority of the current council, such investments in community have been abandoned.

One of the harshest critics of providing any stimulus to nonprofits, particularly those whose members that may have been critical of certain members of council’s voting records, is Ward 14's Sandy White. She routinely asks for updates on how requests for assistance are being handled. Since there is no money for this in the budget, there is really nothing to handle. Nevertheless, she also routinely asks for support for groups that approach her—the London Multicultural Committee, neighbourhood block parties, tree-planting groups along the Veterans Memorial Parkway. One of those requests will be on the council agenda on Tuesday. Wisely, the recommendation of the Corporate Services Committee was to note and file her request, a polite way of saying, forget it.

The next item is likely to draw a little more interest, however. Although there is no presentation paper available to be viewed in advance (you have to go, the verbal report by Lyn Townsend of C N Watson and Associates which produced the Blue Ribbon Taskforce Report on development charges for the city is a response the recommendation by council from its May 13th meeting. A detailed report preceded that recommendation.

Basically, the issue boils down to who pays for development, the taxpayer or the developer. If someone buys a new home and needs water and sewers and roads and streetlights and police protection for that new home, should that be included in the price of the home or should some of it be covered by people who have already paid for those services at their own place? And when should this be paid for, at the time that the services are being installed or after the deal for the house has been struck? Should the developer pay at the time that a subdivision agreement is made? Or should the city cover the costs until the building permits are issued? The answer certainly makes a difference to the cash flow of the city, the developer, and the lending institution.

The final real cost, of course, depends on how far the services have to be extended. The further out you build, the more pipes and wires and roads you need to put in. That's not cheap. But, if you build where there is already infrastructure nearby, it's cheaper, or so you might think.

Not in London, though. It charges the same amount for servicing a lot no matter where it's located.

In its report of May 13, staff recommended reconsidering that approach. It only makes sense, it was suggested, that the purchaser, via the developer, pay for the actual costs; less if you're close to existing services, more if you're further out. That would encourage infill and discourage sprawl. As well, staff suggested that the payment of the development charges should occur when the approval for the development was granted rather than waiting for the builder to take out the permits. That would ensure that developments get finished rather than leaving something partially done and then moving on to the next opportunity. And, it would ease cash flow by getting money into the reserves faster.

Then, there was also the matter of stormwater management. These are the little ponds you see near developments that ensure that the sewers are not overwhelmed by sudden heavy downpours. Traditionally, they have been regarded as a local item to be paid out of the Urban Works Reserve Fund, a fund which is managed by the city but not subject to council approval. London is pretty much the only municipality which has such a beast and it is a problem since it allows developers to determine the pace of growth. Developers simply charge the fund for “local projects” and get paid from the funds made available from deposits when building permits are requested. But some of these stormwater management (SWM) ponds end up costing millions of dollars and the funds in the reserve aren't sufficient to cover them, especially during an economic downturn.

So staff recommended that these ponds be covered under the City Services Reserve Fund. That means the city decides if there is enough money to pay for them and they won't be able to proceed until there is. It all sounds very sensible.

But the development industry was not happy. Despite nearly two dozen meetings with staff, each lasting one to two hours, it felt it had not been adequately consulted. It wasn't happy about the SWM ponds being subject to city approval, nor was it thrilled with having higher charges for development out in the middle of nowhere. As for paying for stuff up front, well, that was pretty much a nonstarter.

And so, the councillors who like to keep developers happy and contributing to their campaigns and causes voted to send the staff recommendation back to staff for further consultation with the industry and for more information on what is happening elsewhere. Hence, the report from the consultant.

What can she say? As near as I can tell, the staff recommendations were based on the original consultants report which was, if you won't get rid of the Urban Works Reserve Fund, at least limit its use to small ticket items. And consider using a variable rate for development charges to ensure that growth pays for growth because at present, it doesn't. That's why the fund is running into a deficit and developers and builders are having to wait longer and longer for a pay out.

Then there is London Hydro. It's tempting. Three hundred million plus dollars just sitting there, waiting to be plucked. Never mind that it puts about $7M into city coffers each and every year, that it has coughed up some nice dividends—more than $20M recently, and that residents have an efficient, reliable source of energy for its commercial, industrial and domestic needs, that our rates are among the lowest in the country, that every cent of profit goes back into the business or the city, that it gives decent employment to hundreds of Londoners... I could go on, but you get the picture.

But selling Hydro would mean we could nearly eliminate our debt, you say. Indeed. But would it? Would you trust councillors that have fantasies of building interchanges and performing arts centres, of servicing industrial land and having warehouses along the 401, of raising their own salaries and expense accounts, of hiring lawyers to protect them from accountability through the ombudsman?

Would you trust them to pay off the debts that they incurred—and some of them were very active in incurring them—more than a dozen years ago? And how would you make up the $7M of lost revenue, an amount equivalent to 1.5% on the tax base?

And if Hydro were sold, or merged, who would look after the interests of the ratepayer? What would the new rates be? Who would decide? The experience of other jurisdictions has not been encouraging.

Our former mayor, Adam Beck, would be appalled that selling Hydro would even be a consideration. For him, it was always about hydro being a service to the public. He was adamant that control of hydro be through a separate public body rather than council. He didn't trust the council of the day. We can certainly sympathize with him.

The final item will be the report from Re-Think London, the best thing that has come out of this council. I attended the presentations by urban designer Ken Greenberg at the Urban League annual general meeting and the following evening at the Wolf Performance Hall at the Central Library. More than 300 Londoners joined me in envisioning the walkable, livable, exciting city that London could be.

Unfortunately, only two of them were from city council—Matt Brown and Paul Hubert—the latter the only representative of our current planning committee.

That alone speaks volumes. Our citizens are engaged. They want to learn and participate. But do our councillors?


Chris M said...

I used to be a part of the Strengthening Neighborhoods Strategy group but I didn't feel like any ideas we had were appreciated by those in "power".

I used to think that a person who said they would do the right thing, would...until they lied.

I don't think I trust politicians much anymore, nor politics either. I hope someday we will have councilors with courage, integrity and open mindedness. I also hope we will have politicians who aren't on the take but at this moment its hard to see that happening any time soon.

Thanks for the article it speaks volumes about what is truly wrong with our city.

Interested Party said...

It seems to me that the persistent pandering to a greedy and self-interested development community is the biggest problem with our city. If we don't have councillors with the integrity to stand up to them then little good will happen for us.

I have asked numerous political watchers in other cities to learn if all developers dominate their city councils as they do in London, and I am assured that this is not the case in other most other cities.

If this lot of greedy developers who care so little for the rest of us do not want to build here, then other developers who are willing to work within rules of good urban planning will come forward.

We just more citizens to support and elect councillors with courage and integrity.

Anonymous said...

When you look at page 301 of the city's budget, you see that the dolt from Ward 4 exaggerated the size of the city debt even if you include the water debt, part of which is funded by all the users from each lake. He also does not seem to understand that to buy back outstanding debts means you are paying above par for the notes (it ain't like a mortgage). But when you are too dumb to get confused with learning something you don't understand, it is so much easier to make up stuff.

R. Cain said...

Tues 6/11/2013

Add the Mayor & Councillor Henderson to the list.
The Gang of Ate deliberately flouts the law, then stiffs taxpayers for legal expenses.
So far, no public outcry.