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Is Vancouver in dire financial straits that it had to ask to borrow $235 million as part of the vote Saturday?

Question: How come the citizens of Vancouver were asked on the ballot to approve $235,000,000 in borrowing to cover city spending in the next 4 years? Is the city’s deficit so great to require these borrowed funds? Thank you very much Frances, you are much appreciated in our household.

Answer: As anyone can see, I am leaping to answer this question so that I can bask in the praise here. Well, also, I know how to answer it without having to phone anyone, which is good, because I think all communications staff and councillors in Vancouver are currently in a zombie state from exhaustion.

So …. the City of Vancouver ballot in EVERY election asks electors to approve the borrowing of tens of millions of dollars to pay for major projects, like community centres, roads, bridge repairs and so on.

Unlike the provincial and federal governments, cities are not allowed to run deficits and they have to ask for voter approval to undertake capital projects that require taking on new debt. (Wouldn’t it be cool if the province had to, as well? Then we could all have a vote on whether we want to spend umpteen billion to replace the Massey tunnel with an eight-lane bridge.) This year, that meant voters had to approve $235 million out of the total $1.085-billion capital plan.

In 2011, voters approved, by about a 2/3 majority for each three borrowing questions,  $181 million for a total $702-million capital plan, and the same in 2008, for $222 million in capital-plan projects. I can’t seem to find what the total was for that year.

So it’s not unusual to borrow. The thing to watch always is whether the city’s level of debt, which is covered by making mortgage-like payments out of the operating budget, is getting to an unusually high level. Debt servicing has been approaching the 10-per-cent level of the operating budget that most financial types consider to be as high as you’d want to go.