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National Post - Apr. 27, 2010 - By Megan O'Toole - firstname.lastname@example.org
Mississauga spent like 'drunken sailors': Parrish
Carolyn Parrish is launching a fresh assault on Mayor Hazel McCallion's leadership, saying Mississauga council spent like "drunken sailors" for years under her tenure.
A chart the councillor plans to present to her colleagues -- a copy of which was obtained by the National Post -- shows between 2000 and 2005, more than $115-million was transferred from a hydro reserve fund into the city's operating budget in an effort to keep taxes low. The reserve fund, which initially contained $340-million, could have ballooned to double that amount had it been managed better, Ms. Parrish says.
"Had the Mayor and council not been obsessed with zero or low tax increases, or had they trimmed operating budgets as we've done for the past four years, the hydro reserve would be sitting at $680-million and Hazel wouldn't have to be snippy with the federal government over our future infrastructure needs," Ms. Parrish said, referring to the Mayor's recent criticism of Ottawa and Queen's Park after an announcement on bridge and road funding.
During the five years in question, annual tax increases ranged from 0% to 3.8%, while operating budgets increased by an average of 10% each year, Ms. Parrish noted.
"They spent like drunken sailors and took money meant for future capital projects and boasted about zero, or minimal, tax increases," she said.
The hydro reserve fund, initially created in 2000 when Mississauga Hydro was converted to Enersource, was later converted into a general capital reserve fund. More than $170-million has been used over the past decade for capital projects, but Ms. Parrish says she has "no problem" with that usage.
"At the interest rates of the 2000-2005 years, that reserve money would have increased enormously and we wouldn't be down to $30-million," which is the amount projected to remain in the fund by the end of 2012. At that point, Ms. Parrish noted, the city will have to start borrowing for infrastructure needs.
Ms. McCallion did not return messages requesting comment on the matter, but Councillor Katie Mahoney pointed out the money used to top up operating budgets primarily came from interest on the reserve fund, rather than the principal. (Interest between 2000 and 2005 added up to about $109-million, $6-million less than what was pulled for successive operating budgets.)
"The question would be why would you tax for infrastructure maintenance while allowing money to build up in a reserve?" Ms. Mahoney asked. "This would not make sense financially."
Added Councillor Pat Saito: "Councillor Parish likes to criticize all the decisions past councils have made but she neglects to recognize that our city is in good financial shape -- better than most municipalities -- as a result of those decisions."
City manager Janice Baker said there were "significant pressures" on the operating budgets during those years. The only way Ms. Parrish's dream of a $680-million reserve fund could have been realized would have been through "dramatic" reductions to capital or operating funds, Ms. Baker said.
"I think people expect that their taxes are going to be used to provide services and that's what we've done," she said, adding the figures in Ms. Parrish's chart have been presented on past occasions as part of the city's regular financial reporting.
"There's nothing in here that should come as a surprise to anybody," Ms. Baker said.
Ms. Parrish says she is hoping the chart will serve to head off another "no infrastructure reserve" budget, which she calls a "short-sighted" way of doing business.
"Not putting money away in infrastructure reserves this year, and only a modest amount last year is akin to no household savings plan," she said, "knowing your roof will need replacing in the immediate future."
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