Off the Rails 9

Clavier S***** Up, City Manager and Ward 2 Councillor Pounce - Debt Without Regret

The following is a verbatim transcript of Brian Clavier's comments, at the August 18, 2009 council meeting, during the public hearing on a bylaw that permits the city to negotiate an $8 million loan from CMHC - at much more favourable terms than an already-passed bylaw regarding the same money from CIBC. Brian was the only person to comment. Responses from Robert Cotterill (the City Manager) and Greg Dionne (Councillor for Ward 2) are also reproduced.

This series of statements is instructive in several respects: it provides lessons about
1) shooting your mouth off
2) the necessity of including the entire context when reviewing commentary
3) critical thinking
4) civil discourse, and
5) how easy it is to take verbal shots at someone who has no opportunity for rebuttal.
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BRIAN CLAVIER: This is a really good idea - especially if the two-hundred-and-twenty-two-thousand dollars in projected savings can be realized. Most people here have a mortgage - and would love to renegotiate their mortgage when rates are very low, as they are right now. And essentially, this is what the city's trying to do here: negotiate much better terms with CMHC in a program that was announced after the contract with CIBC was sound [sic - "signed"]. This bylaw, however, is premature; and the reason it's premature is because, when you try and renegotiate your mortgage, you usually pay a penalty - unless you've been smart enough to find a mortgagor [sic - "mortgagee"] who will actually give you the opportunity to change your mortgage on an annual basis without a penalty. The legal opinion that's necessary before this transaction actually occurs is absolutely required before you consider this bylaw. You need to know how much it's going to cost you to weasel out of the CIBC loan.

The other difficulty that I have arises from what's written on page two-twenty-seven - underneath the 'financial implications' - because this particular change would increase the amount paid annually on the loan of eight million dollars from $616,000 to $720,000. That's an additional hundred and three thousand [sic - one hundred and four thousand . . . .]. And below that, the author of the report has written, "This would mean that the water utility operations would be further stretched, in funding a larger loan payment. However, with the upgrades [that's what this money's for] there is the hope that operational saving would be realized." It would be nice to have some idea of how much that operational saving would be. Remember that the water utility operations are essentially being funded on an ongoing basis, without any kind of loans, and this has been the practice in the last six-seven years: to increase water and sewer rates. I happened to look at my January 2001 water bill: I was paying forty-five dollars for three months - that's fifteen dollars a month. Next week [August 24, 2009] I'm going to be paying one hundred and thirty-five dollars - that's forty-five dollars a month. So between January 2001 and August 2009 my water/sewer bill has gone up 200% - and it's going up further in 2010 and 2011. I live in a residence, I'm paying a residential water rate. The 'business' water and sewer rate has changed zero percent since January 2001. This has been talked about before at council. I think it's really unfair. So that's the other issue, besides absolutely needing the legal opinion before you pass this bylaw. You need to know how much money you're going to save. It shouldn't be a shot in the dark. Thanks.

MAYOR SCARROW: Thank you. I --- City Manager, wishes to respond.

CITY MANAGER COTTERILL: Thank you Your Worship. I don't normally comment when the public unh, make presentations, but the presentation that we just heard is totally erroneous. Uhm, we have not borrowed the money so there will be absolutely no, unh, penalty to the city, and we do have a legal opinion [in fact, the City Manager should have clearly stated that this opinion was given to council just two hours earlier, at an in camera meeting - thus, it was not available to, or seen by Mr. Clavier, or any other member of the public or the media . . . .], and we are doing what is in the best interests of the citizens.
[Note that this unusual refutation, of a "totally" erroneous presentation, is incomplete: it does not tell us which errors Mr. Clavier made in the water rate portion of his remarks . . . .]

MAYOR SCARROW: Thank you. Councillor, your wishes . . . Councillor Swystun.

COUNCILLOR SWYSTUN: Your Worhip, I'd, uh, move the recommendations, that City Council Resolution Number 0932, of December 15, 2008, Part 1A be rescinded; number 2, that Bylaw number 25 of 2009, an amendment to the long-term borrowing bylaw #49 of 2008, be approved as attached; number 3, that Bylaw number 29 of 2009, a new borrowing - new bylaw creating long-term borrowing of 8 million dollars from Canada Mortgage and Housing Corporation be approved; number 4, that administration continue to finalize the loan agreement with Canada Mortgage and Housing Corporation, including obtaining a legal opinion, as requested by the lender; and, number 5, that the Mayor and City Clerk be authorized to execute the loan agreement with Canada Mortgage and Housing Corporation.

MAYOR SCARROW: Thank you. Seconded by?

COUNCILLOR DIONNE: Second, Your Worship, and I'd like to speak to the matter.

MAYOR SCARROW: Councillor Dionne . . . Unh, speaking to the motion - Councillor Dionne.

COUNCILLOR DIONNE: I support the motion, but I just wanna congratulate our staff. You know, to negotiate an agreement where, if we decide to change to get a better interest rate, that we can do that without penalty, and without cost to the city, and that, uh, the taxpayers of the city know that's how we operate. When we go into these big loans, like 8 million dollars, that we make sure we protect our residents, and uh, I wish the researcher that made the presentation would do a little bit more research before he made false statements [although there was no way Clavier could have known about the legal opinion given to this councillor in camera two hours earlier, Dionne still found the opportunity to deliver a shot - with no possibility of a reply from Mr. Clavier - irresistible . . . .]. Thank you.

MAYOR SCARROW: Thank you. Any further discussion? There being none, are you ready for the question? Those in favour? Opposed? Carried. Thank you.