Kingston Concerned About the LVEC
Currently known as the "KROCK Centre"
Formerly the "Kingston Regional Sports and Entertainment Centre" or KRSEC
Formerly the "Large Venue Entertainment Centre" or LVEC
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Rick Downes Whig Standard Letter -- December 19 2005

(Copyright The Kingston Whig-Standard 2005)

The referendum is an important part of the democratic life of Ontario cities. Regulated by the Municipal Elections Act of 1996, a referendum is a direct vote in which an entire electorate is asked to either accept or reject a particular proposal.

While in Canada the most memorable referenda dealt with Quebec's future in Canada, in Ontario cities the issues have been no less interesting. As I was growing up in Toronto, my Dad told me stories of municipal referenda that allowed certain parts of the city to go "wet" or remain "dry." There have been other referendum questions in Ontario cities that have allowed the public to directly determine such issues as the fluoridation of water supply and municipal tax increases.

In Kingston, we've had several plebiscites on such things as the future of the water works department and the governance of the Public Utilities Commission. Interestingly enough, our local university often has referenda on the use of fees paid by Queen's students. The most recent was a referendum on student contribution to the new Queen's Centre.

I would argue that the construction of a large venue entertainment centre merits a referendum question on the next municipal election ballot because the cost of its construction and the public-private partnership proposal to govern its operation are events that are well outside the routine budgetary decisions that Kingston city council makes. Council needs to tell Kingston taxpayers what they're buying and how much it will cost. Before any LVEC contracts are signed, taxpayers need to say "yes" or "no."

With no specific mandate from taxpayers, how can city council continue to pursue such a project? Give all the facts about the LVEC to the citizens of Kingston and let them decide whether or not we can afford it.

One mandate that council does have from the citizens of Kingston is support for the renewal of the infrastructure of the city. For years there was a zero-per-cent tax increase ideology that seriously damaged the ability of the city to maintain, much less renew, its infrastructure. We were in a deep hole and former city chief administrator Bert Meunier proposed a solution. Each year over the past seven years, property taxes have been increased by an arbitrary one per cent to address Kingston's serious infrastructure deficit. To date, about $28 million has been raised. For the most part, this money has been levered to borrow money through debentures that have been at historically low interest rates. Our infrastructure is improving. Indeed, so much is being done that members of council have had to field e-mails and calls about traffic delays due to construction. Our municipal credit rating is improving as well, and our recent A+ stable rating from the Standard & Poor's rating service was well received by council. This good news was constrained with the warning from the bond rating agency that "the city's debt burden is set to increase ... and its level of liquidity set to decrease as Kingston makes repairs, renovations and additions to key municipal infrastructure which include: substantial work on the city's roads, and water and sewer systems ... to fully use the city's resources in coming years, limiting the city's financial flexibility."

If the cycle of the economy turns, and inevitably it will, council needs to have credit in the bank to continue to address Kingston's infrastructure deficit.

A major element in the LVEC business plan is financing capital expenditure from its operations budget. We know from experience in other jurisdictions that have built sports and entertainment centres that the profits for the private partner are well covered. This is why they're in business, to make a profit.

Why is there such a long list of applicants to build the multiplex, for example? Because there's good money to be made at little risk. But we also know that the risk if things start to go wrong will be left with the public partner. Public risk for private profit; such is the story of many sports and entertainment centres across North America. In Guelph, property taxpayers are on the hook for some $20 million after a public-private partnership went wrong at the Guelph Sports and Entertainment Centre. To quote Guelph's website: "At the present time, the centre generates a small positive cash flow. The city presently believes the cash flow will be sufficient to pay for operational expenditures but is not sufficient to service the debt costs associated with the centre."

By the way, the original operator of the Guelph centre has submitted a bid to run the new four-pad multiplex in Kingston. If this LVEC is a gold mine, why doesn't the private sector build it and run it?

Over the past two years the LVEC has been packaged, marketed and sold to council under the guise that its proponents represented the "silent majority." Even Carl Holmberg, vox populi, has the temerity to claim that "by far and away" the majority support the LVEC. Of course, by now we understand that these people are speaking for their own vested interest. Their business interest has morphed into the public interest. The believers have converted us all.

We need a referendum because there's no mandate from the people of Kingston to build the LVEC. This plan would put Kingston city finances at risk. Next November, Kingston taxpayers deserve the final say on the LVEC.

- Rick Downes is city councillor for King's Town, the district in which the proposed arena would be built.