During this past Tuesday’s city council meeting, Ward 2 Coun. Michael Vagnini again claimed there’s city money sitting “outside of the books” and “in an account … that nobody says really exists.”
“I feel that not only the taxpayers should be aware of that, but I also feel that we as a council should be looking at this and asking why are the reserves set up the way they are?” Vagnini said. “Taxpayer money sitting in an account … that nobody says really exists.”
During Tuesday’s city council meeting, city general manager of corporate services Kevin Fowke clarified, “There is no money that is off the books here, these are all part of our audited financial statements.”
“Point of order, I never suggested anything was off the books,” Vagnini interjected, prompting several city councillors to throw their hands up in exasperation.
“I publicly apologize if I used those words,” he later added after being informed by his colleagues that he did, in fact, claim there was money “off the books.”
Where is the money?
Sudbury.com connected with Fowke by phone on Wednesday for additional clarity on city finances. These details, he said, are all captured in the city’s annual audited financial statements.
On Page 69 of the 2021 report (the balance sheet), it’s noted the city had financial assets totalling $792.4 million at the end of the year, including $550.5 million in investments.
By the end of August of this year, the amount of investments jumped to approximately $753 million, Fowke said, clarifying this “does not mean that they are some funds that can just be used to fund operational expenses or new priorities of council.”
“There are a few uncommitted sources that we routinely provide to council for their decision-making and when seeking funding between budget cycles for things like emergency repair work, opportunities to partner with senior orders of government, etc., but the amounts are small compared to the overall level of investments ($550M at the end of 2021, $753M at the end of August),” Fowke said. “And of course, there is cash for use to support the daily workings of the city.”
Of the $303 million borrowed for specific projects in recent years, approximately $250 million remains unspent due to certain bridge and culvert projects not being done yet, the Junction East Cultural Hub not progressing at full speed yet and city council canceling the Kingsway Entertainment District arena/events centre project. The city has invested these funds in a high-interest savings account earning them 3.55 per cent.
These funds, Fowke said, constitute “capital money that has already been dedicated and borrowed with some pretty strict terms for what we’d use it for.”
In many cases, these funds must go toward projects that carry 30-year investments.
At the end of the year, the city had $165.8 million in reserves, (Page 124), meaning the city’s reserve funds continue to lag far behind the average for Ontario municipalities.
During Tuesday’s city council meeting city CAO Ed Archer said this might be one of the factors holding Greater Sudbury back from a AAA credit rating (their latest rating is AA+).
As for Vagnini’s assertion there was a conversation with city staff in which it was claimed there was money “outside the books,” Fowke said this has never been the case.
“There was never a conversation about these amounts not being accounted for, or available for use generally in business.”
City finances are audited “extensively” every year, including their full investment portfolio.
“There was never a conversation about these amounts not being accounted for, or available for use generally in business.”
This isn’t the first time Vagnini claimed there’s money in city bank accounts available for use for whatever project that city council decides upon.
In a video posted to YouTube in January which city administrators dismissed as being rife with misinformation, Vagnini claimed there was $300 million “sitting there” in a city bank account ready to be used to aid in the city’s homelessness crisis.
At the time, city executive director of Finance, Assets and Fleets Ed Stankiewicz clarified to city council that the money in the city’s investment portfolio is earmarked for specific projects and funding operational expenses on a day-to-day basis.
Vagnini seemed not to accept the explanation Stankiewicz offered at the time.
“It’s kind of like Christopher Columbus,” Vagnini told Sudbury.com after a meeting at which his video’s points were refuted. “I’m going in, saying the world is round and everyone says I’m nuts.”
Sudbury.com reconnected with Vagnini by email on Wednesday in an attempt to clarify his comments during Tuesday's council meeting. Although he wrote that Sudbury.com is “totally wrong,” and “missed script me on many occasions,” he declined to substantiate what the alleged inaccuracies have been in past coverage or in our questioning about the money he claims is available to be used.
In his email correspondence, Vagnini said that rather than grant an emailed or phone interview, he would speak with Sudbury.com for a recorded interview at the The Northbury Hotel and Conference Centre with his political advisor, Tom Price, present. Sudbury.com is considering those stipulations.
Without explanation, Vagnini has declined all of Sudbury.com’s requests for comment for the past several months.
Vagnini earned 60.94 per cent of the vote in Ward 2 during the Oct. 24 civic election, beating out his lone political opponent, Eric Benoit.
Tyler Clarke covers city hall and political affairs for Sudbury.com.
