Published Articles

Borrowing for the Bridge Our Best Option (in September Business Examiner)

Now that the Victoria City Council has made the decision to replace, rather than rehabilitate, the Johnson Street Bridge, the harder question of funding the operation comes into play.

On November 20th, Victoria voters will be asked to vote on whether or not they support the borrowing required to build the bridge. This is the point in the saga that holds the most risk.

The Chamber has come out with a statement supporting the borrowing required to build the bridge. After the $21 million contribution from the federal government, that amount was estimated to be $56 million. However that has now been reduced to just under $50 million as the City has shuffled around some other projects to free up existing capital reserves. If we are fortunate, they may also be able to find more pockets of funding from other granting sources to further reduce the amount that is needed through borrowing.

The community is concerned about borrowing this amount of money – and so they should be. It’s a large debt for a single infrastructure project. However, borrowing the funds is indeed the most cost effective way to move forward.

During a forum held by the Chamber and the Downtown Victoria Business Association for members, we learned that the City is retiring a significant debt off its books, providing the borrowing space needed for the bridge. With the reduced amount, the City announced that there will be no tax increases specifically required to pay back the loan.

However, if the referendum for borrowing is not approved, the tax situation would be very different. The City has clearly stated that they intend to go ahead with the work of the bridge even if the borrowing is not approved. This decision is due to liability concerns with the deterioration of the bridge. Should that be the outcome, taxes in the City of Victoria will rise in the double digits. That is unacceptable to residents, and even more to businesses who pay taxes at a rate of 3.66 to that of residents on the same property value. 

The other option, says the City, is to decommission the bridge – an option that is untenable as it will most definitely lead to business relocation and/or closure, which will not only affect jobs, but also decrease the City’s tax revenues and put further upward pressure on taxes.

The borrowing option is not the optimum situation. Clearly we would prefer that there were more reserve funds available in place to deal with the bridge condition as the City was alerted to the decreasing life span of the bridge in 1999. Clearly having transportation infrastructure be regionally planned and funded would be a better situation. Participation of the provincial government in funding would be preferred.

But none of these options are on the plate. And with the decision before taxpayers, to borrow or have significant tax increases or bridge closure, the best and cheapest option is to support the referendum.

Articles - 2010

Articles - 2009