I went through your comments to find out where you clearly state the known pricetag. Your response to Tim's e-mail clearly shows that you still have questions and uncertainty. The numbers passed out by Keefe and Fraser are probably the most reliable, up to date and clear numbers passed out publicly. If they are unclear then there is no clear public statement.
Also noted from Tim's emails is that the province and city have 10yr borrowing costs around 4.65% today. Quite different from the 8.76% deduced from a 5.1$ mil/yr payment over 25 years with a current value of 56$ mil.
So is the 56 mil$ for construction cost legit or just a convenient number to throw to the public?
If 56 mil$ is the equivalent present cost then a 5.1 million annual payment for 25 yrs equals to an 8.76% interest rate.
The city's financial report the city cites the long term borrowing costs at around 4% in 2011. Not sure what long term refers to. But a retail mortgage buyer can get a 25 yr fixed mortgage 'round here at 8%. Loans to municipalities are much much cheaper than that. 30 year Canadian bonds are <4%.
But anyways, here are the net presents for various equivalent interest rates and yearly lease rates, for perspective.
for 25 years we get.....
yearly lease (m) / equivalent borrow rate (%) / equivalent present value (m)
5.1 / 4.5 / 79
5.1 / 5.5 / 72
5.1 / 6.5 / 66
5.1 / 7.5 / 61
5.1 / 8.6 / 56
4.7 / 7.5 / 56
4.3 / 6.5 / 56
4.0 / 5.5 / 56
3.6 / 4.5 / 56
"The province and the city are contributing $56 million each to be paid in the form of a capital lease over 25 years. "
This is the line thrown about in all the articles on the convention centre. My assumption is that the 56$ mil represents the net present value (NPV) of the lease agreement.
This NPV with 5.1$ mil payments over 25 years would represent an 8.6% interest rate in order to justify the 56$ mil figure. Spanish 10 yr bonds, a very risky investment, do not even yield over 7% at present.
It would be very helpful to everyone if someone from HRM could clarify the breakdown of expected operational costs. It seems they may look at partitioning the maintenance/utility costs from the business expenses of the trade centre business. It is mighty confusing trying to decipher what exactly they mean by operational costs. Not to criticize Mr. Keefe who is just a temp fill in as CFO, but why can't he lay out some of the simple financial info from this MOU? Can anyone? I'm a bit confused at how much of a quest the search for important, and uncomplicated, information has become. Glad there are people like you who are willing to put in the effort to find it.
I posted this to my facebook wall with a quick summary. The reaction from people who would, in their normal life, never come within a mile of The Coast is priceless.
In a time where information sharing is easier than ever before, and when collective knowledge can be mined with greater capacity than ever, we see hurdles continually being placed to restrict open flow of information. We see barriers being placed that promote exclusion of participation rather than looking at ways to facilitate participation.
I think that power figures attempting to consolidate decision making powers to themselves is the lazy path to take and prone to long term error.
The harder, intellectually demanding, and more cooperative path is to embrace and work with a culture of openness made possible by rapid information sharing. Obviously this is a control freak's nightmare, when their bias' and judgment can be placed under scrutiny. It requires mental effort to create that culture. However the long term payoffs could be substantial.
Social media facilitates an individual's ability to participate. Social media users are more politically active and aware (http://pewinternet.org/Reports/2012/Facebo…). People don't want to be in the dark about issues, policies and decisions that affect their lives. They want decisions and direction made from the bottom up. They don't like the top down approach to managing their lives, to manipulating information and to avoiding transparency for convenience.
They definitely want to know that the councillors who they vote for - who they have access to - have the capacity to represent their interests. The linked powerpoint makes sense from the management desire to get things done as quickly and hassle free as possible. However it seems to eliminate participation and input from the population who the CAO is supposed to be serving. Big problum~~~
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