McCallum defends tough Surrey budget measures
Postponed major capital projects include police infrastructure, library expansion
Surrey Mayor Doug McCallum came to the defence of the first budget of his term in a news conference Tuesday, calling it “one of the best budgets that I’ve seen.”
But the deep capital cuts the financial plan contained left some questioning whether it could be justified in a rapidly growing city.
The proposed budget includes a 2.9 per cent tax increase and cuts to planned community infrastructure projects that total nearly $136 million. Set to be put on pause are ice rinks in Cloverdale, plans for community centre and library expansions, a child-care project, policing infrastructure, parks and cultural amenities, among other things. The capital projects have been “proposed for postponement to future years for Council’s consideration,” according to the city ’s budget documents.
“We need to live within our means in Surrey,” McCallum said. “Too much debt is bad, especially when you look at the world economy at this time.”
McCallum questioned the need for high-priced projects like a $44.5-million ice complex in Cloverdale and a $58-million community centre and library in Grandview Heights.
“We campaigned in South Surrey very strongly that we were going to slow down growth out (there),” McCallum said in relation to the latter project from behind a podium that sported his city’s motto, “The future lives here.”
After the draft budget was made public, the Cloverdale Community Association said whatever projects were approved by past councils should move ahead as planned. “We will continue to push for it,” Mike Bola, the community association president, said on social media. He couldn’t immediately be reached Tuesday.
McCallum said he had been clear with voters during his election campaign that he would limit tax increases in the city to the consumer price index. That index reached 2.9 per cent in July and remained there through October, according to B.C. Stats.
Surrey’s 2018 tax increase was 3.8 per cent.
Last week, McCallum said he was “shaken to the core” when, after being re-elected, he learned the city’s debt was $514 million.
That figure isn’t the current debt load, according to the city. Instead, it’s the projected debt that the city would incur under the existing five-year financial plan, which was approved in December 2017, if that plan were to be allowed to proceed to completion.
McCallum’s proposed capital plan would set Surrey’s debt requirements at $378 million.
Kin Lo, an accounting professor at the University of B.C.’s Sauder School of Business, said he thought McCallum’s assertion that the city’s debt levels were too high couldn’t be justified. He said it’s common for a city to take on debt to build needed infrastructure “especially for a growing city like Surrey.”
Lo said Surrey’s debt — even at the $514-million level — wasn’t particularly large. For comparison, he said Vancouver’s debt was about double that of Surrey ’s, with a population that is just 20 per cent larger.
McCallum has embraced the principle of “pay-as-you-go” financing in his budget. “We will not mortgage the city’s future and will operate like a regular household by saving up and paying as we go,” he said previously.
Lo rejected that concept in the context of municipal capital spending, which he likened to a family buying a new home.
“Hardly anyone thinks of coming up with all the cash available to buy a home without incurring a mortgage,” he said. “If we are going to invest in a home that we’ll live in for years and decades in the future, most people would be willing to incur some debt.”
No funding for additional police officers was included in the city’s 2019-23 financial plan. McCallum has vowed to replace the Surrey RCMP with a municipal force.
McCallum served as Surrey’s mayor between 1999 and 2005, and was re-elected in October.