City of Winnipeg bullies citizens with $200 million in intergenerational debt

Winnipeg Mayor Scott Gillingham's recent announcement of a $200 million bond issue raised many unanswered questions. Citizens want an explanation, and local media struggle to get answers from a silent administration.

Gillingham's consistent avoidance of serious questions, particularly regarding the city's bond history and its impact on taxpayers, sets a troubling pattern. TDS News' persistent efforts to clarify bond losses have been met with silence. It begs the question: Is Gillingham just as easy with the softball questions as the city's borrowing history? Every elected official must stand up to scrutiny, and Gillingham's evasion will not only hurt the city, but also undermine the credibility of those who voted for him. Bonds, often for infrastructure projects, are needed by cash-strapped municipalities. But Gillingham oversaw balanced budgets as a former finance chairman.

“Bonds are really about past decisions that we've made, and it's debt on long-term investments from past decisions, so it's long-term debt for intergenerational projects.” This was announced by Mayor Scott Gillingham

Mayor Gillingham's remarks acknowledge that the responsibility for the debt will be passed on to future generations, including children and grandchildren. However, some residents are concerned about the long-term financial implications for these demographic segments.

These concerns stem from current financial challenges caused by an over budget for the police department and a rapid transit system that only benefits a limited portion of the city. There are also complaints about the poor quality of roads in the municipality.

“This bond issue will not only fund critical infrastructure projects, but also reaffirms the City of Winnipeg's commitment to making strategic, long-term investments in our future built on a strong financial management foundation,” said Councilor Jeff Brovati, Chair of Finance.

Councilor Broughati's assertion that the bond issue demonstrates the City of Winnipeg's commitment to strategic, long-term investment in the future is more surprising than believable. Using bonds to pay off intergenerational debt seems like a dubious financial maneuver that calls for vague assurances of “sound financial management.”

Citizens deserve more than rhetoric; they need a clear and detailed explanation of how accumulating more debt fits into a sustainable and prosperous future. Broughati's statement lacks a transparent and credible rationale, resembling empty rhetoric from a town hall booth.

“It is very important for the people of Winnipeg to be informed of any comprehensive measures the city has taken in various activities to raise revenue before going to the bond market. One proposal for additional revenue is to seriously consider recycling its own aggregate from roadworks and other projects, which could bring an additional $40 million annually to the city's budget. Transparency in financial strategies is key to a thriving community.” said Don Woodstock, a former mayoral candidate

The city's issuance of bonds to pay off the debt has some citizens on social media suggesting the city's actions resemble a Ponzi scheme. Anyone who makes these statements further increases the insecurity they may feel. Citizens deserve to know the origin of all project funds because they directly affect their financial future. Anything else in a 365-page budget that might reflect the city's debt obligations, or asking them to sift through complex calculations, is impractical.

Transparency should be the basis of effective management in this administration. Gillingham's consistent neglect to answer important questions affecting Winnipeggers is deeply troubling for someone who campaigns for transparency. Winnipeg deserves clear and comprehensive answers, especially when it comes to financial well-being.

When citizens understand how their taxes are being spent, increased civic engagement is a natural consequence. The proactive move toward transparency includes a plain-language display of total bond debt, maturities, and interest payments taxpayers have incurred over the past decade. This move will foster an informed citizenry and help build trust through open communication about the city's financial obligations.

Using a conservative 4.65% interest rate at the city's projected 40-year yield, the $200 million bond would balloon to a staggering $372 million — nearly double the amount owed. This is based on the assumption that rates remain the same and all other factors remain constant.

Then there is the very real scenario: interest rates rise, and hypothetically they double. That's about $744 million, or three-quarters of the interest payment that would be affected by inflation or other factors.

The hardworking people of Winnipeg deserve to be informed, even if the news is bad. A city that values ​​openness should not shy away from difficult questions. Gillingham and his administration owe it to people to provide transparent, open and honest answers about bond history and financial decisions that will affect generations to come. Privacy time is over; it's time to answer.