Dear Editor,
I saw the above referenced Letter to the Editor in the May 7 issue of The Record and was interested in what the author had to say and read it through.
After completing the letter, I must admit it was written by a very skilled writer, so I took it upon myself to do some fact-checking.
The author writes "The principle of sunk costs must be recognized" and "halting the 6th Street bridge project at this stage would squander substantial resources - funds that have already been spent on planning, approvals and early construction efforts." That sounds terrible, so let's do some math to see how much is being squandered and compare it to the cost of going ahead with the project.
Well, I didn't get very far approaching it from that angle. The author offers no dollar figure of what the "sunk costs" number is, and offers no dollar figure on what the "substantial resources ... spent on planning, approvals and early construction efforts" are. The latter I would like to take the liberty of putting at $0.00 as I rode my bike to both ends of the proposed construction site and no early construction has occurred at either end, no survey stakes, no flagging tape all the trees are still lovely and have not been removed.
Let's approach the issue from the other angle so we have some numbers to consider. The project cost is being put forward as $11.1 million. In the Council debate on this issue prior to the vote, staff warned Mayor and Council this was a pre-tariff number, so we can all have some concern about the $ 11.1 million number, but lets just pretend its true.
On April 23 Council approved Loan Authorization Bylaw No. 3183 looking for $4.3 million for the bridge and $1.9 million for property acquisition. So, $6.2 million in long term debt. Let's use a 25 year amortization, interest at say 4 per cent, so Interest on the $6.2 million is another $3,583,975.82 to add to our pre-tariff $11.1 million. Hmmm. So now our pre-tariff true cost is looking more like $14.58 million.
Can we compare that to the un-numbered "sunk costs" and such, if the author is willing to provide some numbers? Or is the real principle here "Throwing good money after bad"?
Mike Grinsell
Comox Valley
