City of Powell River officials have hit another roadblock in the process to transfer funds from reserve accounts to loan to a development corporation.
The adoption of five bylaws that would have allowed the city to transfer funds from the membrane and equipment reserves were on the agenda for the July 4 council meeting. But Mac Fraser, chief administrative officer (CAO), announced at the beginning of the meeting that the city’s lawyers had recommended deferring adoption of the bylaws.
“In the spirit of precaution, it’s staff’s recommendation to defer consideration of the enabling bylaws to transfer funds between reserves and subsequent loan funds to PRWDC, the Powell River Waterfront Development Corporation,” he said. “It is a precaution because this recommendation is made via legal advice regarding the accounting complexities of capital expenditures by government business enterprises, such as the Powell River Waterfront Development Corporation.”
Even though the Community Charter, which gave municipalities powers of a natural person, has been in place for 10 years, Powell River is still “breaking trail” in some things, Fraser added. “We want to make sure we get it right,” he said. “We’re asking you to defer consideration of this set of bylaws associated with the transfer and staff will take into consideration the legal advice in regard to accounting complexities before we proceed.”
During question period, Fraser said that the city’s lawyers asked for more time to provide further advice and work with the city’s auditor. “They’re saying they just need a bit more time to be sure they get it exactly right,” he said. “It’s the first time we’ve done this.”
Council has passed the initial readings of bylaws that transfer $1.1 million from the sewer fund treatment plant membrane reserve and $400,000 from the sewer fund treatment plant equipment reserve to the economic development capital reserve fund, which is being created at the same time through a new bylaw.
Council is proposing to loan the $1.5 million to PRWDC, a city owned company that is a partner in PRSC Partnership Ltd., to purchase half the PRSC shares owned by Catalyst Paper Corporation. Tla’amin (Sliammon) First Nation, also a partner in PRSC, will purchase the other half of Catalyst’s shares. Catalyst has agreed to retire the $4.6-million mortgage on land owned by PRSC for $3 million. The city and Tla’amin will be 50-50 partners in PRSC once the transaction is completed.
Council started the process in April with initial bylaws, which were later withdrawn on the advice of its lawyers. New bylaws were presented to council on June 20.
Councillors have commented along the way that they have done their due diligence and have received advice from their lawyers that the process is legal.
Meanwhile, council has already approved spending $920,000 from the membrane reserve to replace 50 per cent of the membranes in the Westview wastewater treatment plant.
