Sunday, March 18, 2012
Thursday, November 17, 2011
Saturday is the day - here is my pledge!
Please make sure you get out and vote regardless of whom you support!
My pledge to you, should you decide to support me, is that I will continue my vigilant assessment of the newest Master Water Plan. That plan is currently being developed by the consultants and it is imperative that this time they have it right.
To date there were two plans. The first one, the more reasonable one, which included separation of agricultural and domestic water supplies and filtration, was discarded two years after having been approved by the electorate by way of the 2003 elections. That plan cost a total of about $500,000, including the demonstration treatment plants on Middleton Mountain.
In 2004 the current plan was put before the electorate in a referendum. Politicians of the time strongly supported this plan as a perfect cheap alternative. They were aware, or should have been aware (I reminded them often enough) of the fact that this plan was considered and discarded by the creators of the first plan. Their objection was due to the fact that this plan would have been $49 million more costly than the one they produced. The main reason was the wasteful treatment of huge volumes of water that was used for crop irrigation. They should have been aware of the fact that peak demands could not be met by the new plant and water advisories or boil water advisories were inevitable in the future. Staff knew that and I would be surprised if they did not warn politicians of this issue.
What happens is that when the demand exceeds the capacity of the plant treated water is mixed with untreated water negating the benefit of the treatment. Although this did not happen this year the potential of this happening was so close that staff declared water advisories for much of the summer. As it happens, it was not even a hot summer.
Now that a new "Super Master Plan" is in the works I would love to be there to scrutinize of how it is developed. I would also like to continue the development of water pricing policies to ensure they are as close to fairness as possible. My presentation today at GVAC was debated and eventually tabled to the new Committee to be created after the election. I would love to defend the proposal I put forward to the Committee.
As an added benefit I would continue to see that sewer costs are kept to a minimum. No sewer extension at taxpayers expense!
So, if you consider my pledge worth while and you want to have a watch dog to ensure you get the best plan for you money I would be honored to be selected. However, if you believe others will do a better job by all means, I'll accept your verdict without a grudge. I will keep you informed either way.
It was an honour to serve for the past three years and if you so wish it will be an honour to represent you for the next three!
Thank you!
Gyula.
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How we could reduce the cost of water!
Most of you are aware of the unfair distribution of the water fees.
You use 10 m3 a quarter you pay $66.20, a whopping $6.62 per m3.
You use 100 m3 a quarter you pay $177.8 or $1.78 per m3.
Is it fair pricing? A resounding no! Could it be better? You bet it could be!
As you know most of our infrastructure is financed by taxes. Our roads, bridges, the Theatre, Wesbuild Centre, the Fire Halls etc., all were built on borrowed monies and repaid by taxation.
Theoretically, the operation and maintenance is supposed to be taken care of by user fees. That is not the case with the sports facilities and the Theatre. We subsidize them by taxes.
Politicians decided that water infrastructure financing should be treated differently. In this case we not only pay for the operation and maintenance of the service by user fees but we finance the entire loan through those user fees. To me this does not make sense.
When I asked the reason for this anomaly the explanation floored me. We can finance water infrastructure through user fees because we have captive customers. With sports facilities, the Theatre user participation is optional. If the user fees are too high people will not use the facilities.
However, everyone must use water and sewer so we can increase water rates with impunity. The customer must pay the price we set.
I totally disagree with this approach. It is a totally illogical decision. The infrastructure is the means of delivering the product or services. It is not a consumable product. The consumable product is the treated water delivered to the customers. The cost of the product is determined by the cost of production.
In the case of water the infrastructure financing cost currently is about $4 million annually. However, while we are paying for the infrastructure cost, administration is also putting away reserves for the replacement of said infrastructure. In other words we are now paying twice for the same infrastructure that will probably serve the community for 40-60 years. I do not think that is sensible.
In an effort to try to convince fellow Directors on GVAC I have prepared a couple motions for the next Special Meeting of the Committee that will be discussed on November 17 at 8:00 AM in NORD Board room. You are invited to the debate of those motions. Details of the motion can be vied here.
You use 10 m3 a quarter you pay $66.20, a whopping $6.62 per m3.
You use 100 m3 a quarter you pay $177.8 or $1.78 per m3.
Is it fair pricing? A resounding no! Could it be better? You bet it could be!
As you know most of our infrastructure is financed by taxes. Our roads, bridges, the Theatre, Wesbuild Centre, the Fire Halls etc., all were built on borrowed monies and repaid by taxation.
Theoretically, the operation and maintenance is supposed to be taken care of by user fees. That is not the case with the sports facilities and the Theatre. We subsidize them by taxes.
Politicians decided that water infrastructure financing should be treated differently. In this case we not only pay for the operation and maintenance of the service by user fees but we finance the entire loan through those user fees. To me this does not make sense.
When I asked the reason for this anomaly the explanation floored me. We can finance water infrastructure through user fees because we have captive customers. With sports facilities, the Theatre user participation is optional. If the user fees are too high people will not use the facilities.
However, everyone must use water and sewer so we can increase water rates with impunity. The customer must pay the price we set.
I totally disagree with this approach. It is a totally illogical decision. The infrastructure is the means of delivering the product or services. It is not a consumable product. The consumable product is the treated water delivered to the customers. The cost of the product is determined by the cost of production.
In the case of water the infrastructure financing cost currently is about $4 million annually. However, while we are paying for the infrastructure cost, administration is also putting away reserves for the replacement of said infrastructure. In other words we are now paying twice for the same infrastructure that will probably serve the community for 40-60 years. I do not think that is sensible.
In an effort to try to convince fellow Directors on GVAC I have prepared a couple motions for the next Special Meeting of the Committee that will be discussed on November 17 at 8:00 AM in NORD Board room. You are invited to the debate of those motions. Details of the motion can be vied here.
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Wednesday, November 16, 2011
What I learned at the all candidates forums.
Having attended four all candidates forums during the last couple of weeks I have learned a few things. I learned that this Council has achieved absolutely nothing during the last three years in office and they floundered in the wrong direction. At least that is what the former Councillors, vying for office again, would want to have you believe.
True, this Council did not vote for putting a massive housing development in the middle of an agricultural neighbourhood, did not spend $650,000 of taxpayers’ funds to extend sewer services for the benefit of said development and did not promote putting sports fields on a prime 100 acre operating agricultural field. They were looking for ways to preserve Coldstream's agricultural heritage and reaffirmed earlier policies that development must pay for itself, including sewer extension.
They provided necessary services and infrastructure for the community and kept taxes to a low rate. They corrected the unfair flat fee rate structure for sewer users and worked diligently to promote fair water rates. They arranged the construction of the grid road (College Way) in cooperation with senior governments. they built multi-use trails. They worked hard on negotiating a fair deal on the water and sewer governance issues.
It is interesting that no former Councillor ever showed up at any Council meetings nor have they complained by way of correspondence about the direction this Council was heading. It seems criticism at election time is the best remedy without offering a concrete solution.
I also learned that the issues in Coldstream are so simple that one can learn of all the problems with two years residency and just a couple of weeks of “research” prior to the election. You don’t need to attend any Council nor Regional District meetings, you just have to wave a magic wand and poof, you resolved everything. All this community needs is some accelerated DEVELOPMENT and all the issues will be dealt with. I am not convinced, it works that way.
True, this Council did not vote for putting a massive housing development in the middle of an agricultural neighbourhood, did not spend $650,000 of taxpayers’ funds to extend sewer services for the benefit of said development and did not promote putting sports fields on a prime 100 acre operating agricultural field. They were looking for ways to preserve Coldstream's agricultural heritage and reaffirmed earlier policies that development must pay for itself, including sewer extension.
They provided necessary services and infrastructure for the community and kept taxes to a low rate. They corrected the unfair flat fee rate structure for sewer users and worked diligently to promote fair water rates. They arranged the construction of the grid road (College Way) in cooperation with senior governments. they built multi-use trails. They worked hard on negotiating a fair deal on the water and sewer governance issues.
It is interesting that no former Councillor ever showed up at any Council meetings nor have they complained by way of correspondence about the direction this Council was heading. It seems criticism at election time is the best remedy without offering a concrete solution.
I also learned that the issues in Coldstream are so simple that one can learn of all the problems with two years residency and just a couple of weeks of “research” prior to the election. You don’t need to attend any Council nor Regional District meetings, you just have to wave a magic wand and poof, you resolved everything. All this community needs is some accelerated DEVELOPMENT and all the issues will be dealt with. I am not convinced, it works that way.
We will clean up Coldstream Creek even though we have to have use Ministry of Environment's tough regulations. We will pay up our debts at an accelerated rate (raising taxes?) even though our contract is for a minimum of 10-years. There are rules dictated by MFA and senior governments which must be observed by local governments. These rules need to be learned over years and the learning curve is steep. These rules are learned at university courses.
Anyway, these are some of the things I learned at nearly ten hours of debates and questioning. It was a useful experience. Now it is up to you, voters, to decide what you have learned at these forums and make your decisions at the polls. Most importantly, PLEASE GET OUT AND VOTE! IT IS YOUR PRIVILEGE and many people in other parts of the world would sacrifice their lives for this privilege.
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Thursday, November 10, 2011
Response to Media Release by Mr Hrabchuk.
MEDIA RELEASE #2
October 31, 2011
For Immediate Use
MAYORALTY CANDIDATE QUESTIONS COLDSTREAM MAYOR’S FINANCIAL LEADERSHIP
Coldstream Mayoralty candidate, Dave Hrabchuk, today questioned what the present Mayor is doing to create new enterprise and broaden the tax base in Coldstream.
“When you review the ten year financial record for the District you find that net assets have declined from $4.7 million to a negative $700 thousand,” said Hrabchuk, “that’s a drop in value of $5.4 million. And while our assets have been declining, debt has increased from $700 thousand in 2001 to $4.1 million in 2010.”
“Certainly we have new physical assets including the two fire-halls, but does the District have the ongoing cash flow to support the debt” asks Hrabchuk, “or will taxes have to be raised?”
There’s another oddity in the financial statements according to Hrabchuk. In 2001 with debt of just $700 thousand the District was repaying principal at the rate of $100 thousand per year. In 2010, with debt of $4.1 million, the District is only repaying debt at the rate of $200 thousand per year.
“How is this sound financial management,” ask Hrabchuk? Debt has increased almost 600% yet repayment of that debt has only doubled. Isn’t the District simply running the debt over a much longer period and wasting a substantial amount of money on additional interest payments?”
“And now the District is conducting a referendum asking residents if they’re prepared to borrow another $1.3 million to construct a new mechanics shop in the Works Yard which, if approved, would bring debt owing to $5.4 million, by far the largest debt the District has had in the past 10 years.”
“Do I think the District needs a new mechanics shop,” asked Hrabchuk? “ They could retrofit existing facilities, there are other options. Additionally, the environmental issues should be dealt with first so we can see how much that costs. Do I think this is the best time to be increasing debt, absolutely not,” he said.
“We need a revised financial plan that sees us paying off our debt as quickly as possible,” said Hrabchuk, “and I will make that a priority when elected”.
It appears that Mr Hrabchuk’s forte is indiscriminate criticism of the current Mayor. He does not offer anything of substance in return. However, in his haste to criticize he is making major mistakes. Just the last paragraph of his above release he promises major tax increases. Only an uninformed would suggest “...paying off our debt as quickly as possible”.
October 31, 2011
For Immediate Use
MAYORALTY CANDIDATE QUESTIONS COLDSTREAM MAYOR’S FINANCIAL LEADERSHIP
Coldstream Mayoralty candidate, Dave Hrabchuk, today questioned what the present Mayor is doing to create new enterprise and broaden the tax base in Coldstream.
“When you review the ten year financial record for the District you find that net assets have declined from $4.7 million to a negative $700 thousand,” said Hrabchuk, “that’s a drop in value of $5.4 million. And while our assets have been declining, debt has increased from $700 thousand in 2001 to $4.1 million in 2010.”
“Certainly we have new physical assets including the two fire-halls, but does the District have the ongoing cash flow to support the debt” asks Hrabchuk, “or will taxes have to be raised?”
There’s another oddity in the financial statements according to Hrabchuk. In 2001 with debt of just $700 thousand the District was repaying principal at the rate of $100 thousand per year. In 2010, with debt of $4.1 million, the District is only repaying debt at the rate of $200 thousand per year.
“How is this sound financial management,” ask Hrabchuk? Debt has increased almost 600% yet repayment of that debt has only doubled. Isn’t the District simply running the debt over a much longer period and wasting a substantial amount of money on additional interest payments?”
“And now the District is conducting a referendum asking residents if they’re prepared to borrow another $1.3 million to construct a new mechanics shop in the Works Yard which, if approved, would bring debt owing to $5.4 million, by far the largest debt the District has had in the past 10 years.”
“Do I think the District needs a new mechanics shop,” asked Hrabchuk? “ They could retrofit existing facilities, there are other options. Additionally, the environmental issues should be dealt with first so we can see how much that costs. Do I think this is the best time to be increasing debt, absolutely not,” he said.
“We need a revised financial plan that sees us paying off our debt as quickly as possible,” said Hrabchuk, “and I will make that a priority when elected”.
Response (Gyula)
It appears that Mr Hrabchuk’s forte is indiscriminate criticism of the current Mayor. He does not offer anything of substance in return. However, in his haste to criticize he is making major mistakes. Just the last paragraph of his above release he promises major tax increases. Only an uninformed would suggest “...paying off our debt as quickly as possible”.
The overwhelming majority of our debt is due to the taxpayer approved referendum for the construction of our fire halls. Those funds were borrowed from the Municipal Finance Authority at a predetermined rate for 20 years. We cannot actually repay the funds for at least 10 years as the bonds purchased by MFA are for 10 years. If we wanted to repay early we would have to increase taxes for 10 years to accumulate enough funds to be able to pay off the total debt at the end of 10 years. So, Mr Hrabchuk, how much would you be willing to increase taxes to speed up repaying our debt approved by taxpayers?
Comparing the 2001 Financial Statement to the 2010 is like comparing apples to oranges. The Public Sector Accounting Board (PSAB) ordered changes to the accounting standards by local governments three years ago and now we are using the Accrual method as opposed to the previous Cash method. I am not an accountant to adequately describe the differences but it appears Mr Hrabchuk is equally incompetent in this field. We now have to depreciate our assets yearly in the reporting. DCC’s which are actually reserves are now reported as liabilities until such time as they are used for projects.
Suffice to say Coldstream has one of the lowest tax rate and the lowest debt per capita as compared to similar sized communities in BC.
Indeed we have increased physical assets, such as College Way valued at about $9 million, various bike and walk ways, new lift stations, etc. We have value for our expenditures and the taxpayers of Coldstream should rest assured that their Council looked after the community well. No taxpayer funds were spent on structures only benefiting developers.
Anyone interested in further research could visit BC Municipal Spending Watch 2010.
Comparing the 2001 Financial Statement to the 2010 is like comparing apples to oranges. The Public Sector Accounting Board (PSAB) ordered changes to the accounting standards by local governments three years ago and now we are using the Accrual method as opposed to the previous Cash method. I am not an accountant to adequately describe the differences but it appears Mr Hrabchuk is equally incompetent in this field. We now have to depreciate our assets yearly in the reporting. DCC’s which are actually reserves are now reported as liabilities until such time as they are used for projects.
Suffice to say Coldstream has one of the lowest tax rate and the lowest debt per capita as compared to similar sized communities in BC.
Indeed we have increased physical assets, such as College Way valued at about $9 million, various bike and walk ways, new lift stations, etc. We have value for our expenditures and the taxpayers of Coldstream should rest assured that their Council looked after the community well. No taxpayer funds were spent on structures only benefiting developers.
Anyone interested in further research could visit BC Municipal Spending Watch 2010.
Providing facts is superior to innuendos and unfounded criticism. Below are a table from the above report demonstrating Coldstream's relative financial position and a table of Tax comparisons between communities in the Okanagan. Judge for yourself the health of Coldstream's finances.
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Wednesday, November 9, 2011
When is a developer not a developer?
The last Coldstream Ratepayers sponsored All Candidate Forums concluded at the Okanagan College Auditorium. Attendance below expectations but there was a lively debate as candidates answered questions from the audience. In response to a question Mayoralty Candidate Dave Hrabchuk repeatedly reassured the audience that he was not a developer.
Technically he might be right as it is the company ARLO Construction that is involved in land development. However, he is listed as one of the management team.
There is nothing wrong with developers, they are perfectly legitimate members of society. What I am surprised about is the fact that he has repeatedly denied that he is a developer. Perhaps my definition of a developer is wrong. So, decide it for yourself. I attached the relevant hyperlink.
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Sunday, October 16, 2011
Important issues for Coldstream.
The most important issue in Coldstream (and probably all other jurisdictions in the area) is maintaining a democratic, open and transparent government.
My pledge is that my actions will continue to be in support of the taxpayers' best interest.
Another important issue is fair service costs. The generally accepted principle of fairness is that you pay for service you receive. If the cost to deliver one cubic meter of water to your home is $1 than you should expect to pay $20 for 20 cubic meters. That is not the case with our water utility. Even though we urge people to conserve water we charge significantly higher unit rates to low water consumers than we do to water guzzlers. Say you consume 10 cubic meters a quarter your cost is $66.20 or $6.62 per cubic meter. If your consumption is 100 cubic meters per quarter you pay $1.51 per cubic meter. Does that sound like user pay? The reason is a very high flat component of the price structure. The flat rate of past years was an extreme form of this rate structure. It is totally unfair.
Council and I have been working to change this attitude for years but to date we only made modest headway. If re-elected I intend to continue to work towards a change of the rate system to a more reasonable and fair system. Of course, your Council and I cannot do it alone, your assistance in lobbying other elected official would be required to succeed. You have the power!
Sewer rates were very unfair prior to this Council's election. In 2008 all customers paid a flat rate of $142 per quarter ($568 per year). This Council started to implement a user pay system. Today's minimum quarterly rate is $88.84 up to 15 cubic meters (and any additional cubic meter costs $2.31. Much better for low contributors. There is still room for improvement.
Council and I have been working to change this attitude for years but to date we only made modest headway. If re-elected I intend to continue to work towards a change of the rate system to a more reasonable and fair system. Of course, your Council and I cannot do it alone, your assistance in lobbying other elected official would be required to succeed. You have the power!
Sewer rates were very unfair prior to this Council's election. In 2008 all customers paid a flat rate of $142 per quarter ($568 per year). This Council started to implement a user pay system. Today's minimum quarterly rate is $88.84 up to 15 cubic meters (and any additional cubic meter costs $2.31. Much better for low contributors. There is still room for improvement.
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