NO TAXPAYER GUARANTEES FOR SWSDA DEBT

-------- Your tax dollars at work ---------

MUNICIPAL SERVICES & ECONOMIC DEVELOPMENT

GET IT RIGHT!

For a number of years, SWSDA has supplemented contributions to SWSDA's core funding in creative ways. In addition to core funding grants, municipalities have fronted SWSDA expenditures with line of credit guarantees exceeding $500,000 per year. They have also contributed additional grants to SWSDA funding initiatives and guaranteed loans provided to SWSDA by the Royal Bank for specific projects. Recently, SWSDA tried again to pry its fingers into municipal pockets by seeking to get municipalities to increase their line of credit guarantees from $500,000 to $750,000. That plan back-fired when municipal watchdogs found out and pointed out to municipalities that it was illegal for municipalities to provide these guarantees.

SWSDA's fallback position was to convince municipalities to provide the extra $250,000 as "repayable grants", (which they did last year and that quarter of a million dollars is now listed as a payable on SWSDA's books). The new $250,000 in grants plus the existing $500,000 in guarantees now brought the total in additional cash provided to SWSDA to three-quarters of a million dollars. That $250,000 has now been spent by SWSDA and the most recent accounting indicates that the majority of the guarantee has been spent also.

This creative financing approach ... was sold by SWSDA as an interim step while SWSDA arranged to get the Province to change the law to enable municipalities to legally provide guarantees for RDAs.  I wrote recently about that initiative when I provided you dear reader with a copy of a letter from Mr. Anderson to M. Wills who works for Service Nova Scotia and Municipal Relations.

In his letter ... copied by Mr. anderson to Mayors and Wardens in Yarmouth and Shelburne Counties and the Municipality of Clare, Mr. Anderson provided a purported response from the former Minister of Municipal Affairs implying that the government was working on a way to accomodate a resolution passed by the Union of Nova Scotia Municipalities seeking a change in the legislation to permit these guarantees by municipalities.

Here is Mr. Wills reply to Mr. Anderson.... His reply is interesting for a couple of reasons. First, Mr. Wills raises the issue that if these guarantees are to be provided by municipalities SWSDA would have to be a "municipal body". Mr. Wills points out that if that happened, SWSDA would only be able to "...borrow from the Municipal Finance Corporation...." and its borrowings would be regulated by the Municipal Finance Corporation Act.

Moreover, Mr. Wills points out that borrowings of this type would only be provided for capital projects and would require Ministerial approval of each guarantee. He also points out that under the Regional Community Development Act, RDAs are not allowed to "... buy, sell and own property..." something Richard Hurlburt and the previous government failed to enforce. Indeed, successive Conservative governments turned a blind eye to the laws of the province thereby enabling the continuing flaunting of our laws by SWSDA and our municipalities.

What a pleasure... watching a government enforcing the laws we are supposed to live under. Gee... it might even give one confidence that some day we can sort out this mess! Thanks Mr. Wills and the Department of Economic Development.