Surrey Mayor Doug McCallum outside Surrey City Hall. (Now-Leader file photo)

Surrey City Hall

City of Surrey’s debt nowhere near McCallum’s figure of $514M

2017 documents show debt of $267M; Gill says McCallum’s discrepancy ‘absolutely shamefully wrong’

Surrey’s debt load is nowhere near $514 million, as Mayor Doug McCallum stated in a press release on Tuesday.

According to the City of Surrey’s 2017 financial documents, it’s actually $267.2 million – and the discrepancy has the city’s former finance committee chair flabbergasted.

“It’s absolutely shamefully wrong,” former Surrey First councillor Tom Gill told the Now-Leader Wednesday morning.

So where did McCallum come up with the figure of $514 million?

Asked about the inconsistency, and to break down the apparent debt, the Mayor’s Office provided an emailed statement saying the figure included “projected debt that the city would incur under the current 2018-2022 Five Year Financial Plan,” which was approved last December “if it was allowed to proceed to completion.”

However, McCallum’s press release stated that “council had been apprised that the city is currently carrying a debt of $514 million.”

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The Now-Leader requested an interview with McCallum, as well as the head of the city’s finance department, to explain why the figure was presented this way.

“We are about to start the public process and will not be making further comment at this time,” said an emailed statement from the Mayor’s Office.

Councillor Brenda Locke returned a request for comment, but said “that particular issue is definitely for the Mayor’s Office to respond to.”

“The part the mayor’s talking about, I haven’t been apprised of. We will be. I believe that’s all happening very quickly. We will be in budget review time, and there will be public consultation around that as well,” she added. “I think that’s for Doug to respond to.”

Gill, who lost his bid for the mayor’s chair to McCallum on Oct. 20, said the way mayor presented the city’s finances has him “so disturbed.”

“And, he assumed that all future capital projects would be debt financed. Again, wrong, wrong, wrong,” Gill said.

“The fact is, we have not financed all the capital plans using debt so why would the current council make that suggestion. Doug knows better, he’s a previous mayor. Capital projects get advanced or pushed back according to senior level government commitments to projects. And each budget cycle, we have the opportunity to re-prioritize.”

See also: Gill says McCallum using Surrey’s debt as ‘escape route’ to renege on promises

In his Nov. 27 release, McCallum said he was “deeply dismayed and shaken to the core” at the $514 million figure, and that the debt load is “simply untenable and frankly, irresponsible.

The mayor vowed to “immediately bring the city’s spiraling debt under control.”

“When I was previously Mayor for nine years, I took great pride in running the city’s finances by saving first and avoiding debt. Council and I have agreed to immediately bring the city’s fiscal house in order,” McCallum stated.

According to the release, staff will be directed to prepare a budget that will “significantly cut down the debt by embracing the principle of pay as you go.”

“I want to assure the citizens of Surrey that the services and programs that the city delivers will not be impacted and they can expect the same high level of service as before,” McCallum said in the release. “What we will be doing as a council is determining what makes the most fiscal sense for our ratepayers and how to responsibly proceed with capital projects. In short, we will not mortgage the city’s future and will operate like a regular household by saving up and paying as we go.”

Asked for comment the morning after McCallum issued his Nov. 27 release about the $514 million, Gill didn’t mention the figure was off.

Gill said he was “caught off guard” when asked in the morning about the figures, but later in the day, realized what had been done.

But, at the time, Gill did say he thought McCallum was using the city’s debt as an “escape route” to deliver on his campaign promises.

Gill said he doubts a municipal force can be realized in just two years, which McCallum has promised. Gill estimated it would take four to five years to set up a police force.

“We all know the cost of policing. I find it irrational in any business, for anyone to suggest they’ll make significant changes without information on what that cost is going to be. He’s hoodwinked the community on that.”

The city’s debt load is reasonable, according to Gill, who pointed to the City of Surrey receiving at A+ rating from the C.D. Howe Institute on Nov. 13, the highest the organization handed out in the country.

“How can we get accolades from such significant authorities throughout the world, recognizing transparency and documentation, and then for someone to suggest we have not been clear?” said Gill. “Doug’s using this as an escape route not to deliver on election promises he’s made.

“The folks of Surrey have been hoodwinked.”

Gill also pointed his finger at McCallum for selling off city land during his previous mayorship.

When Surrey First came in, said Gill, they made “significant changes.”

Those changes included the creation of a road levy to invest in infrastructure, increases to development cost charges, as well as investing in civic amenities such as the Grandview and Guildford aquatic centres, the new city hall. He also mentioned projects in the works such as ice rinks in Cloverdale and Bridgeview, and a rec centre being built in Clayton.

“The premise Doug is suggesting, suggesting we have too much debt load? We didn’t have the new city hall, the downtown core, the relationships with SFU. These are all initiatives that really started under the leadership of Dianne Watts. We saw the big, bold vision of what it would take to create a new city.”

City staff are in the process of preparing the budget that will be posted online for the public on Dec. 3 and presented at the Finance Committee meeting scheduled for Dec. 11.

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