Sunday, March 11, 2012

Refinancing - An Option that Makes Sense

A couple of weeks ago I wrote about how members of council need to ask for and take advice from a wide variety of sources, one of which is city staff. So I was very pleased to find, in this week's council package, a memo from the financial services department, outlining very clearly how the city could save over half a million dollars by refinancing an old debenture.

The debenture in question is one that was issued in the late 1990s (before my time on council) for upgrades to the Pollution Control Centre. There's $5 million remaining to be paid, with a current rate of 6%, and an end date of 2018.

Now, 6% is much higher than current rates, so one would hope that we would be able to take advantage of the current financial situation. But, just like trying to get out of a mortgage, there are costs associated with refinancing, so it only makes sense if the resulting savings are greater than the refinancing costs.

Financial Services, who are our experts in these matters, believe that tendering this debenture for refinancing could cut the interest rate in half, and save us a considerable amount. They have clearly laid out four options, which could save the city between $485,000 and $712,000, depending on the term of the refinancing and whether we opt to pay monthly or yearly. The highest savings would come with shortening the term by two years, and paying monthly, just like you can save money on your mortgage interest costs by shortening the term and increasing your payments to weekly or biweekly rather than monthly.

I like the idea of saving the city, and thus the taxpayer, money, both by reducing the amount of interest that we're paying, and by shortening the length of time that we're in this particular debt, so I'll certainly be supporting this recommendation.

I also appreciate the efforts of Financial Services in bringing this forward. The intricacies of all of the financial arrangements that the city is involved in are far beyond the capacity of council members to keep up with, and it's good to know that we have staff who can find these opportunities to benefit the city, and present them clearly and concisely. I can only encourage them to keep looking.

"If you would be wealthy, think of saving as well as getting." - Benjamin Franklin

Sunday, March 4, 2012

Going Paperless (More or Less)

It's been about a year since City Council decided to move to iPads, rather than having council agendas on paper. This was an idea put forward by administration, with the proposed benefit being that staff time and paper, and thus money, would be saved. The city bought twenty-two iPads, nine for members of council, the remainder for staff.

As with most changes, things have not worked out quite as smoothly as hoped. There is less paper being used, although I wouldn't use the term paperless to describe things yet. Last minute items are still hand-delivered to our homes, on paper, although not as regularly as before. We still occasionally get last minute reports, on paper, on our desks right before a meeting. If we had hoped to be able to reduce the number of staff because of reduced photocopying needs, that hasn't happened.

We are using less paper. The agenda for tomorrow's Executive Meeting, for example, is more than 300 pages, so when you multiply that by the number of members of council and all the administrative staff who come to meetings, times 20 or so meetings a year, that's a lot of paper that the city hasn't had to buy. (I don't use the argument that we've saved lots of trees - trees are a renewable resource, and paper is recyclable, and most foresters, including the one I'm married to, get frustrated by that claim, particularly since the pulp mill closed.)

Moving through 300 pages of an agenda on a screen isn't as easy as flipping through a paper document though. While you can highlight crucial points on the screen, bookmark stuff to go back to, and write notes in little balloons, I still prefer using a marker, and writing marginal notes the old-fashioned way. A sign of age, I suppose.

Having the iPads has given administration the opportunity to send out supplementary agendas, which can happen anytime before a meeting, rather than having to have the entire package put together and delivered on the Thursday before a meeting. When this happens, we then have to work with two or three documents open at the same time, and it gets difficult finding and coordinating things between all the open documents, especially if other council members are just wanting to move ahead with a vote. And there have been times when I've arrived at a meeting to find out that I haven't received the supplementary agenda, so I haven't had any time to review it, let alone highlight key sections.

When we first got the iPads, our email addresses were changed to a city email address without prior notification. This proved to be a bit of a problem for me, since I don't use the iPad every day. I've since asked administration to forward all of my emails to my regular computer, which I go on every day, and to put my regular email address back on to the city web-page, which they have done.

You may wonder why I still want to keep my home email as the main contact. The iPad is owned by the city, so the emails sent to it aren't confidential, and can be monitored by city administration. I know that some of the people who want to raise an issue want to remain under the radar, so to speak, and I think that it is important that they be able to maintain that confidentiality.

I've had to take my iPad in to administration three times over the past year, because it hasn't been working properly, such as when I wasn't receiving supplementary agendas. Not only does this mean that I can't access material sent out during that time, it also takes city staff time to diagnose and fix the problem.

As I said, no change can be expected to go smoothly, and I'm not such a Luddite that I can't see some benefits to this move. I would like to see how much money we've saved, versus how much this change cost, and I would hope that we would not rush to upgrade to the next latest thing (coming soon - iPad 3), until this last change has paid for itself.

"A computer lets you make more mistakes faster than any invention in human history - with the possible exceptions of handguns and tequila." - Mitch Ratliffe