This is an important topic that has been occurring in the city of Lethbridge in which the city’s ill fated investment in asset backed commercial paper.
The city’s losses will not affect taxpayers; there will not be any tax hikes or service cuts in order to cover these losses.
The $2 million loss announced last week as part of a buy back deal between the city and National Bank Financial was already factored into the city’s finances through a $5.7 million write down taken in the 2007 fiscal year.
This write down is in effect to set aside $5.7 million within the city’s Municipal Revenue Stabilization Reserve (MRSR) to absorb future losses on the city’s original $30.3 million investment.
The MRSR is intended to provide a “buffer” for the city to deal with fluctuations in revenues and expenses from year to year.
Without the MRSR, we taxpayers would have to cover the loss.
This goes to show that Lethbridge has prepared itself to cover such investment losses, and it is great to see that we taxpayers will not have to cover the mistakes that the city makes.
This mistake was unexpected, but the fact that the MRSR was able to cover it, allows us to be at ease knowing that for a while we will not have to cover any mistakes that the city makes.
Heleen Jacobsen
Broker of Record with InfoMarket Group GMAC Real Estate
www.infomarketgroup.com
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