By Pepper Parr
August 8th, 2022
BURLINGTON, ON
Ward 6 Councillor Angelo Bentivegna has for the most part taken a different approach to looking at the city’s financial matters.
He inevitably has questions – some which make it evident he doesn’t fully understand what the issue is.
But on a number of occasions he has asked THE critical question: How much ?
Some of that confusion with just what the issue is came out during the debate on the $39 million the city is going to spend building a new Skyway arena which is in ward 5.
“My question has to do with the incremental budget impact. On page six of the Staff report”. Bentivegna points to the “program and rental revenues of $100,000 which obviously becomes a credit to the whole process.”
Bentivegna is referring to revenues – the debate is about a capital cost and who is going to pay for the building.
Due a number of factors, set out in an accompanying article the tax payer is going to have to cover $2 million of that cost that will be raised by the issuing of a 15 year debenture that will carry a 4.5% interest rate.
In referring to the $100,000 incremental revenue. Bentivegna said he found that “number actually extremely low. From my experience being in hockey rinks. My calculations give me almost four and a half times that. Can you explain how we got to the $100,000, please?
A financial department staff member responds: “I’m not certain as the dollar quantum that was arrived at; it was probably done through our parks and recreation area. But that $100,000 was included in our multi year simulation and that number will be updated obviously as part of our proposed 2023 budget, if there are any changes or in increases to that.
Bentivegna frequently requires an explanation from other members of Council.
The $100,000 was a figure that was based on what the Skyway was bringing in before the decision was made to demolish the building. It was almost a place holder.
Bentivegna comes back: “Okay, so is it possible we can still get some sort of report even in the next days or whatever, from Parks and Rec as to how we got to that 100. So at least from my stand point, I could do some homework and email back with Parks and Rec so thank you for that answer.
Staff respond: “I believe the number that is shown there is just that it’s an incremental number. It’s not the total number. So this is in addition to revenue that we would have received for the old arena, the basic arena that was there before – so this is showing the difference, I believe. And so these numbers that are presented in the operating cost impacts, they will not impact the capital costs that we’re talking about today with respect to the tender award.
These are meant to be here to reflect the ongoing sort of net operating costs once the facility is built. And it’s really the difference between this sort of new facility which is expanded has other features, community rooms, walking track, etc. In comparison to what the old facility would have cost us.
The increase in the cost of building a new Skyway arena stunned everyone – despite the rise Council decided to proceed taking the position that the prices were not going to come down in the near future
That tax supported debt will show up on the tax bill once the budget for 2023 is set sometime after the election.
Bentivegna isn’t about to give up: “I appreciate that. But at the end of the day, it’s the incremental budget impact will affect our multi year budget simulation and if we’re using numbers – we’re obviously looking forward here and I think the numbers, if you work from a 40 hour week, which is minimal, I come up with $450,000. (Which would be revenue once the arena is built, open, operating and generating revenue)
Bentivegna is stuck on the “multi year budget simulation moving forward, which is really what we’re looking at here is going to be affected. So I think we should know, really we should have known previously what those impacts would have been but I’ll go with the flow here.
My second question is, “again in the report it talks about user obligations. Ice users were asked to participate as they have in the past many, many times and unfortunately have some commitments to the city and cannot participate in this project. My question is, again, maybe it’s a little premature but what is the commitment from the ice users presently with regards to Appleby in terms of when those numbers fall off the chart for debt, charges and how will that affect the tax supported number once those numbers fall off?
Staff respond: “With respect to affecting the tax numbers, they’ve all been included within the updated cost before you here today. The impact of the Appleby ice debt is taken into consider into consideration
Bentivegna comes back with: “I do want to remind us all that this was budgeted and approved. The reason why we’re here today is because we are over that budget and we have to determine how we are going to raise the $7 million shortfall.
“And I want to make sure that residents are aware that not all that money is going into tax supported dollars. We do have infrastructure renewal of $4.7 million. We do have a corporate accessibility of $400,000.
“So my question was originally the $2 million tax supported because this has been discussed for about four or five years now in terms of getting this project up and running now.
Doesn’t have the look of a hockey arena – it will be much more than that: meeting rooms, walking track, pickle ball courts all placed in a park like setting that is just north of a 6 tower residential development that is north of Burloak park. A big, much needed boost to part of south eastern Burlington.
“ I’m convinced that over time, with revenues of this particular Skyway arena and its amenities, it is going to be a first class facility. And I think this community is looking forward to having this open and it will support the fund the financing through the revenues that it will receive and I know we don’t always see that front row center but I am convinced of that.
So I will be supporting this today.
One could almost feel the sigh of relief.
Related news story:
Spending $39 million when you are $7 million short
How much is the Mountainside Reno costing? Which I do believe was only done a few years ago.
Sure, why not confuse pople with lesser used and perhaps abstract words. What does “quantum” mean? How about an amount or how much.
A quantum (plural: quanta) is the smallest discrete unit of a phenomenon. For example, a quantum of light is a photon, and a quantum of electricity is an electron.
Quantum comes from Latin, meaning “an amount” or “how much?” If something is quantifiable, then it can be measured. If you happen to know some Italian, “quanta” also means “how much” and “quanti”, “how many”?
Sorting out the difference between capital and operating expenses is never easy, even for experts. When a staffer is using bafflegab like “dollar quantum”, no one should blame the Councillor for wanting to understand the numbers.