A Response to Mr. MacGregor and Mr. Loewen

Mr. MacGregor and Mr Loewen,

Thank you for responding to our position. We applaud you for your integrity and appreciate your sincerity and the work you have done in Abbotsford. Respectfully, we disagree with nearly all of the points you raise. It is incredibly important that City Councillors understand it's Financial Statements.  We have brought together a team to analyze the financial position of the city including Chartered Accountant, Eric Nyvall. Years ago, he articled at the very same firm that acts as the City's auditor and ensures that the financial statements are presented according to Generally Accepted Accounting Principles (GAAP).  We also have numerous business owners in our volunteer base and advisory board. 

We disagree on the following points:

1.            At the Plan A Referendum Public Information Session held in 2006 at the Matsqui Centennial Auditorium, Dan Bottrill, City Finance Manager, stated that the City of Abbotsford was projecting a Property Tax Surplus of $4 million for 2007.

2.            Debt levels at that time are unknown to the public because Financial Statements prior to 2010 are unavailable on the City web site. In fact, hardly any financial data allowing us to compare our current financial state to that of the city before Plan A is possible. If you have access to all those Statements, please allow the public to have that same access so we can compare and decide for ourselves. We can tell you that housing starts before 2009 averaged 1100 per year. After that it has been abysmal... 2009 (365), 2010 (516), 2011 (537), 2012 (371), 2013 (749). Comparing 2013, our best year in the last 5 to 2008, we see a 40% decrease in housing starts. If you've managed our local economy so favourably, where has all the investment gone? Account for this decrease in performance? (Source: Canadian Mortgage and Housing Corp)

3.            Total debt - Firstly, we are unsure why you balk at $100 million in debt, but you seem to think that $78.4 is OK. Please tell us why you think so. Secondly, you are not including the $24 million internally borrowed (DCCs). Mr. Loewen claims that money is moved back and forth between City accounts all the time. Setting aside the fact that doing that anytime you want is against the Local Government Act and the Community Charter, this debt is not the simple moving back and forth of money. This money was largely spent on the 2 overpasses on Hwy 1 and those overpasses were not in the city's budget. This means we have taken money out of our DCC fund that should have been spent on other roads, infrastructure upgrades and expansions. That other work still needs to be done. This is called an infrastructure deficit. Every time you take future DCC money and use it to pay for this expenditure of the past, you are not paying off debt, you are simply paying off one credit card with another. At the end of the day, taxpayers will be burdened with this rolling liability. How will you deal with this infrastructure deficit of $24 million?

4.            Additionally, the idea of paying off current DCC debt with future DCC revenue has led Council to raising DCC's to the highest rate we can find in the Valley. Our DCC rate is approximately $29,000 per lot, whereas Langley is $21,000 and Burnaby is $7,000. The result has been a huge downturn in housing starts. In 2008, we had 1285 starts. In 2012, we had 371 and 2013 we had 749. In the 2013, the City projected $18 million in DCC revenue and it only collected $3 million. How was that revenue made up? All departments set their budgets against expected revenue so when $15 million doesn't come in, something must be cut. What was cut?

5.            You mention a strong cash position. Any excess cash coming to the City of Abbotsford is due to "inflated" DCC's, an 80% + increase in Water Rates from 2010 to 2012, a 43% Property Tax increase since 2006. Taxing your citizens to pay for your mistakes is not strength. Can you clarify for the citizens of Abbotsford why these rate increases are so high if your stated surplus and financial position is so strong.

 6.           You mention the city has $130 million in cash or equivalents. "Equivalents" is meaningless Mr. MacGregor...that is like saying I have $100 in cash and coupons. What matters is the cash. In the 2013 Financial Statement, on page 2, the page the Mayor signs, it clearly states on line 1 that "Cash and Cash Equivalents" equal $21 million. No line item anywhere in the Financial Statement shows $130 million.

7.            Last year when the City of Abbotsford was thinking about giving the YMCA $17.5 million, the Finance Department issued a report to Council stating clearly that they only had $14 million available, and then they offered alternatives on how to make up the difference.

8.            We would like to point out that you cannot add our Statutory Reserve to this amount because you are not allowed to spend that.

9.            On that same page of the 2013 Financial Statement, there are also liabilities listed. You cannot exclude those from your calculations. The NET FINANCIAL ASSET for 2013 is $9 million...and this comes after 2012's $12 million NET DEBT. This is not $130 million in the bank. This is the true financial picture of the City of Abbotsford.

10.          Next you seemingly change the long term debt from $78.4 million to $40 million so that you can claim we aren't being accurate? Please answer for this inconsistency in your statement. No Financial Statement by the City of Abbotsford, nor any statement by Abbotsford FIRST includes the number $40 million. Only you use this number and yet it is used to illustrate that in your tenure you've doubled our long term debt. Explain why you would attempt to represent a $78.4 million debt as $40 million to the citizens of Abbotsford?

11.          The are also questions that you and all incumbent Councillors must answer Mr. MacGregor. With one of the highest Property Tax rates in the Province of BC, with the highest unemployment rate in Western Canada, with dwindling housing starts and businesses closing every day, and a 9 year track record of nearly every major economic indicator resulting in a decline, what are you going to do to stimulate Abbotsford's economy? Please post your plans for the economic development of Abbotsford. As an incumbent, you have far more access to information and a comprehensive plan would be appreciated.

12.          The City of Abbotsford committed to giving the Abbotsford Heat $5.5 million to leave our city. Where is that money coming from? What will be cut to provide that capital? It wasn't in our budget so it is "new" money. Where will you get it from?

13.          If you're answer is from the Surplus you are generating from "inflated" taxes and rates (language used by your own Finance Department in 2013), the result has been a city with one of the lowest growth rates in the Lower Mainland. How will you rectify this lack of performance and attract business, investors and jobs?

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