by George Orchiston On January 1, 2004, the Community Charter of British Columbia came into full force. It regulates the City of Powell River in its transactions with private and public corporations. The charter requires that prior to providing assistance to a corporation, such as Powell River Waterfront Development Corporation (PRWDC), the city must enter into a partnering agreement with that corporation. (See Section 21 of the Community Charter.)
It would appear that the city did not comply with this statutory requirement prior to providing working capital, shareholder loans and a loan extension to PRWDC. In other words, without city officials producing such a partnering agreement with PRWDC, the provision of assistance to PRWDC was illegal.
The city owns PRWDC, which presently is a one-third partner in PRSC Limited Partnership. PRSC owns lands previously owned by Catalyst Paper Corporation.
In March 2004, city council approved giving PRWDC $50,000 for working capital. In June 2006, council approved a shareholder loan to PRWDC of $51,000, to be repaid within five years. In February 2008, city council approved a shareholder loan to PRWDC of $12,000, to be repaid within five years. In September 2011, council approved the extension of the $51,000 loan repayment for another five years. It also approved a second $12,000 shareholder loan to PRWDC to be repaid within five years.
According to city financial records, from 2006 to 2011, PRWDC had the following expenses: bank charges, $494; professional fees, $15,440; and investment loss, $68,271. Income from partnership for the same years is $17,135. Investment in PRSC for the same years is $170,261.
At its April 4, 2013, regular meeting, city council, supported by senior staff, was prepared to use money from the city’s sewer fund to lend a further $1,574,000 to PRWDC. The proposed source of this money had been challenged. Without prior notice, the motion to have council approve the loan authorization was struck from the meeting agenda. The chief administrative officer (CAO) explained, “It wasn’t worthy of council’s consideration.”
Only one week earlier, the director of financial services, speaking to councillors about the loan, said, “I’ve talked to the ministry, I’ve talked to our lawyer, I’ve been through A to Z.”
The CAO further added, “I can give you confidence that the director of finance has had extensive conversation with ministry and legal staff this week to make sure we are not taking you somewhere you shouldn’t go. We can give you confidence this is the correct procedure.”
Senior city staff have planted a seed of non-confidence in their ability to ensure that their recommendations to council are in harmony with the Community Charter.
The CAO advised the press that the $1,574,000 loan issue will be coming back before council a month from now. Let’s hope that council will seek the approval of the taxpayers for any such loan should the question resurface.
George Orchiston is a Powell River resident.
