OT: Toronto street lights sale

[Robert Brockway]

On Sun, 21 Feb 2010, William Muriithi wrote:

> Seriously, its not that complicated. I would assume they were given
> the terms of how much it would cost them to have the streets lighted
> annually after the sale.  At that point, it was just a matter of
> putting the two alternatives into their present value and it would
> have been apparent which of the two alternative was superior. How did
> they get it this wrong? Could I be blind to some facts that someone
> here may care to enlighten?

I've seen apparently bizarre decisions made with computers such as leasing 
the systems instead of buying them when it would clearly cost more to 
lease them over the term of the lease.  There are at least two answers for 
this phenomenon:

(1) Leasing comes from a different budget to purchasing.
(2) There are tax incentives for one decision over the other.

Even if (1) is artificial (2) is a genuine consideration.   After tax 
adjustments may make the apparently bizarre decision actually fiscally 
sound.

> Anyway, the good thing is Toronto hydro is owned by the city, so its
> just moving money from one pocket to the other.  I am doubtful though
> they would have done a better job were they dealing with an external
> entity. I am always puzzle why governments these days tend to be short
> term minded. If they start working like private firms, where anything
> after the next quarter does not count, we will have a really bleak
> future

I think it's more like 'anything after the next election does not count' 
:)

Rob

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