OT: Toronto street lights sale

[Christopher Browne]

On Mon, Feb 22, 2010 at 10:08 AM, James Knott <james.knott-bJEeYj9oJeDQT0dZR+AlfA at public.gmane.org> wrote:
> Robert Brockway wrote:
>>
>> 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.
>
> It's also capital vs expense money.  Also, if leased, then support is often
> included and  you don't have to worry about disposal at end of service life.

A non-zero issue may be that hiring city staff means accepting the
financial burden of future rate increases there.

If you watch TTC behaviour, some of the troubles are consistent with
them being unwilling to add additional staff.  If you're on a fixed
budget, you can't afford to hire staff whose wages have a history of
going up in ways that ignore the budget.  Unfortunately, being
consistently understaffed has consequences that eventually injures
their funding, but that's another matter.

It's possible that the city would consider the same kind of factor,
and let it be Someone Else's Problem.
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