Dear Editor:
Re: New civic party questions city reserves, June 4, Burnaby NOW.
Coun. Dan Johnston still ignores the big numbers in small print.
Your reporter Jacob Zinn identifies $891.9 million in the city investment portfolio and $142 million in the city development cost charges account (see 2013 Burnaby Financial Report, footnote No. 2 and footnote No. 5, p. 49).
But he does not identify another $200 million or more in projected market value in the city's "land inventory held for resale" (see 2013 Burnaby Financial Report, footnote No. 7, p. 50.)
Burnaby holds property beyond its own foreseeable needs on its books at "the lower of cost and net realizable value" (see 2013 Financial Report, footnote No. 1, p. 48.) In 2013, the reported cost of land technically "held for resale" was $96.5 million.
Given how rapidly Burnaby real estate values have appreciated in the last few years, this resale property may be worth two to three times more than its purchase price. So the "BCA billion" may be more like $1.2 to $1.3 billion.
Coun. Johnston also continues to ignore the reality of "excess reserves" when he points to the $620 million in required reserves. (This sum was up $35.5 million from $585 million in 2012 - see 2013 Financial Report, p. 35).
Coun. Johnston apparently fails to realize that if the market portfolio holds $892 million and the required reserve is $620 million then the difference between these amounts - or $272 million - is "excess" to statutory requirements. (And to this "excess" could be added the money in the development cost charges account and the projected market value of the resale land.)
So again I ask Coun. Johnston, as BCA "spokesperson" on these issues, how much fiscal reserve does the city really need?
Every dollar held, in excess of the statutory (required) reserve, is a dollar unnecessarily levied from taxpayer pockets.
How high must property taxes go when city coffers already bulge with excess dollars and young families struggle to make mortgage payments while city seniors on fixed pensions struggle to remain in their existing homes?
Burnaby badly needs to debate putting a "cap" on its excess fiscal reserves, allowing for necessary growth in the statutory reserve, and further adjustment to the ongoing increases in the property tax levy.
G. Bruce Friesen, Burnaby
