City bound to cough up surplus

June 29, 2010

STIMULUS FUNDING: London MPs aren’t optimistic the city will be able to use leftover funds to cover project cost overruns
By CHIP MARTIN, The London Free Press

London’s four MPs London proved a tough sell Monday for city hall’s bid to pull a little switcheroo with economic stimulus funds.
Mayor Anne Marie DeCicco-Best was looking for political support when she and two controllers sat down with London’s representatives in Ottawa, but she found tin ears.

City hall, recipient of $103 million in economic stimulus money, will have a few million left over when the program ends in March because some infrastructure projects came in under budget.

DeCicco-Best wants to use that money, expected to be in the $4 million to $5 million range, to cover projects expected to be over budget by a bit less than $1 million.

The $103 million required contributions of one-third from each of the federal, provincial and local governments.
As of Monday, the MPs were told, $26.1 million of that total has now been spent on 46 approved projects.
“We have been very clear,” DeCicco-Best said. “All of our projects will be funded.”

“We think we should keep the whole envelope” of money, she said with the unexpected surplus used to deal with the cost over-runs.
The city is 100% responsible to pay when projects exceed their budget.

The mayor said London has been pushing Ottawa for the flexibility to move funds to address over-budget items and city staff are also scrambling to find projects on which to spend any other leftover money.

But the MPs, she found, weren’t receptive to the idea, particularly Conservatives Ed Holder of London West and Joe Preston of Elgin-Middlesex-London.
Holder said it was “good to hear” there were more projects under budget than over budget and he’d like to see the entire allocation of $103 million stay in London.
But Holder said he’s heard the “rumour” surplus funds can only apply to other projects and not those that go in the red.

“I can’t give you encouragement,” he told DeCicco-Best and controllers Bud Polhill and Gina Barber. “I am more inclined to (funding) new projects,”
Preston, the Conservative government’s regional representative for Southwestern Ontario, was also cool to the switching of funds.
He said that while he would advocate on behalf of London, other centres returned surplus funds to Ottawa. “It has already happened and money has gone back,” he said.

Liberal MP Glen Pearson of London-North-Centre and NDP MP Irene Mathyssen of London-Fanshawe praised the city for its effective use of stimulus funds and creation of a standby list for surplus money but offered no hope to DeCicco-Best or the controllers.

The MPs were given a list of projects updated as of Monday which showed a bit more than $6 million in additional spending than had been reported as of May 17 and had been reported in the agenda of the city-MPs meeting.

Grant Hopcroft, the city’s adviser on intergovernmental affairs, said even more than the $26.1 million in work has been done because of the delay in seeing some bills. And he reminded everyone the city is trying to avoid getting stuck with the 100-cent dollars on over-spending.

“It’s been very clear if we go over-budget, it is our dime,” he said.

The meeting with MPs was part of continuing dialogue between city hall and federal representatives and comes a bit more than a week after a similar exchange with MPPs.


STIMULUS FUNDING
$103 million: London’s share, with one-third each from the federal, provincial and civic governments.
$26.16 million: Amount spent as of Monday.
$4 million to $5 million: Projected surplus from under-budget projects.
Under $1 million: Projected cost over-runs.
Projects: Industrial parks and road upgrades to bridges, sewers, arena upgrades, parkway and parkland improvements and sports field construction;
Deadline: All funds must be spent by March 31, 2011;
Number of capital projects: 46