All that’s left of Powell River Waterfront Development Corporation (PRWDC) is approval of the audits of two financial years.
At the City of Powell River finance committee meeting on August 27, Scott Randolph, director of properties, development and communications, provided an update on PRWDC.
Randolph said on September 5, 2019, council approved dissolution of PRWDC and agreed to assume its assets and debts upon dissolution.
“I’m happy to report that the dissolution of the PRWDC occurred on July 15, 2020,” said Randolph. “There were some delays in the process, so as a result, we ended up having to do two audits. One was for the 2019 financial year, as well as seven months into the 2020 financial year.”
Randolph said he wanted to outline the opinion of the auditors and explain some of the transactions. He said in the case of the audit for the year ending December 31, 2019, auditors found the financial statements fairly presented, in all material respects, the financial position of the company and results of its operations and cash flows for the year then ended in accordance with Canadian public sector accounting standards.
Randolph said in 2019, the company sold land for $1,380,000 to its sole shareholder, the City of Powell River.
“The auditors noted that as a related party inter-entity transaction, public sector accounting standards require the inventory to be transferred to the city at carrying value, as the land sale does not reflect an arm’s length transaction,” said Randolph. “As the transaction is considered a transfer with an exchange value less than the carrying value, no revenue is recognized.
“The difference between the exchange value of $1,380,000 and a carrying value of $2,247,181 is a contribution expense to the city totalling $867,181. Despite the recorded expense for the city, the corporation recorded an accumulated surplus of $85,984 at the end of 2019.”
Randolph said in the case of the audit for the financial year ending July 15, 2020, the auditor again found the financial statements presented fairly the financial position of the company.
“After clearing the accounts payable, which were mainly professional fees for audits and legal, and the dividend paid to the city, PRWDC’s end balance was $0, thus allowing for final dissolution of the corporation.”
Randolph said with the dissolution of PRWDC, the city received a final dividend of $84,362.
He said the recommendation was for city council to approve the audits of the PRWDC financial years ending December 31, 2019 and July 15, 2020.
Councillor and finance committee chair George Doubt said he thinks he understands all of the comments in the auditor’s two clean audit reports and he was impressed with that. He said the audits were the expenses of the PRWDC in 2019 and 2020.
Doubt said there is a value to the lands that PRWDC sold to the city.
“It’s not $1.38 million, which is the related value transfer, which means it’s the book value and has nothing to do with the assessed value of the property and what it could be sold for,” said Doubt. “I think the value of that actual property to the taxpayers of the City of Powell River is much higher than that recorded value. We need to remember that there is a value to that land and it’s a value that the taxpayers of the city will enjoy for a long time to come in whatever way the city decides to use the land.”
Doubt said he wanted to thank the volunteers who gave their time to running the corporation over a period of years.
“They were not paid or given any particular glory,” said Doubt. “I appreciate what they have done for the city.”
Councillor Jim Palm said he not only wanted to recognize those who sat on the committee, but those who had the forethought to put this into play originally.
“It has performed a very positive service to the city,” said Palm. “We have a substantial amount of land in our possession. This community is in much better shape with that land being under city control than with someone we don’t know and what they would do with it.”
Mayor Dave Formosa said he would like to extend his sincere thanks on behalf of the residents of Powell River for all of the work the corporation’s board did, and for all of the flak they took, “which they didn’t deserve.”
He also thanked Randolph, who has been part of the corporation since its inception, said Formosa.
The finance committee gave consent to sending the audits to council for endorsement.
