Le Fait est Accompli

Yesterday, Toronto City Council voted on the One Waterfront Place – Project Symphony.

The startling 34-4 vote in favor of the construction commencement tells me the City is financially doomed with this present council.

The newspapers claim part of the money is coming from TWRC and Tedco. The truth is the development is based on borrowing some $150 million of City money – this figure will no doubt increase if, or rather when, the project goes over budget.

The City Chief Financial Officer stated the deal is below market value. A City sponsored study showed that it was below market value. As our Councilors continue to spend at record pace both these sources have publicly stated that the City’s credit rating will be jeopardized if Corus fails to pay the rent over the long haul.

The significance here is that the bonding agencies are already holding off lowering the City’s credit rating. Moody, Dominion and S&P are all anticipating the historical annual Provincial Government bail out for Toronto. Should the City not receive this money a number of adverse financial triggers may follow.

On the variable lending side, under the new City of Toronto Act, council will no longer be allowed to borrow money should the rate drop below a AA rating. I am not sure, but I think that city’s rate has never fallen below AA.

On long term borrowing, under fixed rate long term debt, the city’s capital projects will be paying added interest. The debt financial limits for such borrowing are determined under the Municipal Act.

During this same meeting, many councilors were more interested in the politics of wasting our dime, taking Holiday and Ford to task over the ridiculous office expenditure audit affair.

Anyway you spell it our future appears gloomy.

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