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With my training and experience in the world of finance, I have watched, read about and analyzed various levels of government in Canada and beyond demonstrating some good, and mostly not so good, examples of financial practices over the past few decades.
In the last few years, I have been focused on the situation at home, in the City of Greater Sudbury.
I have spoken with many of you and others in the community about my view of the problems, their causes and some solutions towards the difficult balancing act that makes up responsible stewardship of taxpayers’ dollars while providing the services that we want and need.
The latest chapter in our arena saga warrants some comment, given elected officials have been charged with making a decision of some magnitude. This past week I reviewed and researched the consultant’s report in detail, as I expect councillors will be relying to at least some degree on its content in making that decision.
While the authors are a highly respected and qualified firm, the report leaves me with the uneasy feeling that it was prepared to support a desired conclusion, emphasizing the shortcomings of the renewal option, and suggesting that it would cost as much as a new build. Time doesn’t permit a detailed critique, so I will simply state that it raises many questions. My main concern is the comparables used. These are projects that they worked on, in some cases decades ago, but aren’t as relevant as more recent and more similar comparisons, such as Thunder Bay and North Bay, and inexplicably the Project Now proposal.
It's unfortunate the Project Now proposal was not compared, as it ticks off most of the boxes.
The only exception is the seating, coming in at 4,800 versus 5,800 for a new build. I don’t see that as a big problem as most events at the arena don’t sell out.
Fun Fact: The arena that just hosted the Men’s World Curling Championships has a capacity of only 1,400 seats. I think it was expanded for this event, but still less than 3,000. The average attendance for 24 draws at this year’s Brier was 4,225 (5,734 for the final) and the Scotties was 2,665.
If I were on council, I would be asking for a revised comparison of Project Now to a new build, and grading from one to 10 each item. I would also discount some of the fluffier “requirements” such as “Creating a bigger WOW factor”, and “a bigger and longer honeymoon after opening.”
While the $60-million estimate in 2019 is obviously going to be much larger now, even if it comes in at double that, it will require borrowing only $55 million rather than the $135 million proposed, which could end up even higher.
That is the crux of the matter for me. From 2004 to 2015, we borrowed $75 million, mostly for needed infrastructure. The previous mayor and council borrowed $200 million. Most of it was for wants versus needs, but at least it was at a low rate. In 2022, they also borrowed $103 million, at higher rates but at least for infrastructure and Pioneer Manor (that’s another topic that warrants its own letter).
The current council has approved borrowing $124.4M in 2025 as part of the capital plan. That, and this next round of financing, whether renewal or new build will carry an even higher rate. It’s up to you, city council, to decide if the extra costs are worth it.
Fred Slade, C.P.A., C.A.
Greater Sudbury