A Powell River resident is asking City of Powell River Mayor Dave Formosa to vacate his office, but Formosa says he has done nothing wrong.
George Orchiston wrote to Formosa on Monday, November 4, stating the Community Charter deems him to be disqualified from office, due to motions passed on September 15, 2011 when Formosa was a city councillor. The resolutions authorized loans to the Powell River Waterfront Development Corporation (PRWDC), which is wholly owned by the city. One motion was to extend a $51,000 loan approved by council in 2008 and the second motion approved a $12,000 loan to the corporation, for filing and audit requirements.
At the time the motions were passed, the city did not have a partnering agreement with PRWDC, as stipulated by the Community Charter. As well, the city did not issue notice of the loans, another stipulation of the Community Charter.
According to Orchiston, the Community Charter states that elected officials who vote for a bylaw or resolution authorizing the expenditure of money contrary to the act are personally liable to the municipality for the amount. As well, the charter states an elected official who is liable to the municipality is disqualified from holding office, in this case for three years.
Orchiston told the Peak he believes Formosa is deemed disqualified from office by the Community Charter. “I am asking him to do the right thing, comply with the Community Charter, show some leadership and make it easier for the community,” he said.
Formosa told the Peak neither he nor the other councillors—Debbie Dee, Jim Palm, Maggie Hathaway and Chris McNaughton—who were part of council in 2011, have done anything wrong.
“If I had done anything wrong, for which I would need to show leadership, I would step aside,” he said. “But I have done nothing wrong, nor has any other councillor.”
The city held a press conference about the issue on Friday, November 1. Mac Fraser, the city’s chief administrative officer, and Formosa, who participated over the telephone, outlined steps that have been taken since the lack of a partnering agreement came to light.
Formosa said during the time the city was taking steps to set up the Powell River Power Development Corporation, which included having a partnership agreement, McNaughton asked about what had happened in the past with PRWDC and loans the city made to it. “We started researching and we found they never had a partnership agreement,” he said.
Formosa said city officials continued to research the issue and found a 2006 legal opinion from Woodward Walker advising that the city did not need a partnering agreement with PRWDC. “We found out we didn’t have one and we needed one,” Formosa said. “We talked to our lawyers and they told us that was wrong, we should have had one back then.”
City council approved a partnering agreement with PRWDC on April 4.
Orchiston wrote a letter to the city on April 13, pointing out the city didn’t appear to have a partnering agreement with PRWDC prior to council authorizing a $51,000 loan in 2006, a $12,000 loan in 2008 and the two 2011 motions.
The city’s law firm now is Lidstone and Company. Lidstone provided advice and the city took the following steps at in-camera meetings:
• PRWDC repaid the loans to the city in July, a total of $75,000, using a line of credit from a bank.
• Council rescinded the resolutions authorizing the original loans to PRWDC.
• The loans were reported to the municipal insurer, the Municipal Insurance Association.
• The city has applied to the province for a Municipalities Enabling and Validating Act (MEVA) to correct the error. A MEVA is a special amendment that provides local government with additional authority or validates procedural errors.
“The legislature has to formally legislate an act that says, yes, you have done the right thing and your accountability has been served,” said Fraser.
Fraser said legal counsel made the city aware of the inappropriateness of the loans to PRWDC on June 5. “By July 4, council had completed three of the four steps and commissioned our legal council to apply for a MEVA,” he said.
The city had everything prepared for a fall sitting of the legislature, but there is no fall sitting, which means the MEVA can’t be passed until the spring of 2014.
Meanwhile, Orchiston had written more letters to the city about the issue, on October 22 and again on October 30.
Formosa said city officials couldn’t answer Orchiston’s questions because of the province’s requirement to keep draft legislation confidential until it is on the floor of the legislature. However, Orchiston’s October 22 letter is on the agenda for the November 7 council meeting. Fraser called a provincial official and explained the city had to go public because the issue was public. “They gave us permission to bring it out of camera,” Fraser said. Council held a special in-camera council meeting on November 1 and resolved to bring the issue out into the public domain.
Along with a press release, the city released minutes from the in-camera meetings held about the issue.
The Community Charter has a provision that if it appears that a person is disqualified and is continuing to act in office, 10 or more electors of the municipality may apply to the Supreme Court for an order for declaration of disqualification.
If the MEVA doesn’t pass through the provincial legislature, Formosa said, “We’re still very confident that, regardless, we’re on solid ground as far as any liabilities for the city or to councillors. If 10 citizens want to challenge this, sign a paper and take us to court...we’re very confident that the judge would see that councillors have not done anything untoward.”
Formosa pointed out the 2011 motions were passed when Stewart Alsgard was mayor and the company was created and the first loans were passed when Alsgard was mayor and there was an entirely different council. Alsgard and the previous councillors didn’t do anything wrong, either, Formosa said. “We were asked to extend the loan,” Formosa said. “We had no reason to go against staff and say, no, we’re not going to extend, or we’re not going to give money to keep paying for audits and fees.”
At no time was taxpayers’ money at risk, Formosa also said, and the issue isn’t about “being underhanded or trying to do something in conflict or help out a corporation, when they shouldn’t, et cetera, et cetera, et cetera, all the things we take an oath not to do.”
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