Edmonton: “Albertans should to very shocked to hear the price tag for building and maintaining 18 new schools in Edmonton and Calgary is now a whopping $634 million dollars when only a year ago the catholic and public school boards in those cities had predicted the total costs would be less than $240 million to build,” said Bill Moore-Kilgannon, Executive Director of Public Interest Alberta. (For Edmonton, the costs were reported to be $117.8 million according to the June 15, 2007 article by David Howell in the Edmonton Journal)
Citizens and tax payers have a right to get very clear answers on the following questions:
· While we all know that building costs have gone up over the past year, why should tax payers accept such a huge increase in projected building costs?
· How much of this cost increase is related to real building costs compared to the up front risk premiums that all companies include in long-term private financing?
· If the government had committed this much funding two years ago to the 2007 – 2011 capital plan presented by the school boards, how many more schools would be under construction right now?
· How much of the increased costs are attributed to higher costs of private financing? Alberta has the best credit rating in the world and so could certainly get a better financial rate than any private company. For example the difference between a 3% and a 4% rate over the 30 years of the deal is more than enough to build at least one if not two schools.
· What will happen if the company’s maintenance practices do not meet the standards and requirements of the school board? Is there an opt-out clause in the maintenance contract if the school boards are not satisfied with the work?
· What will happen to the contract if the company goes bankrupt at some point over the next 33 years of the contract?
“As anyone who has ever taken on a long-term rent-to-own contract knows, you end up paying a lot more than if you just paid for it up front, and you had better read the fine print,” says Moore-Kilgannon, “yet, we don’t even have the fine print to read!”
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