After my last post where I expressed some distaste for the way these faux-referenda operate, I have had a few conversations with people over the process, and tried to understand it more. This was partly prompted by the comments added to that post by the man in the centre of the issue, James Crosty, and questions raised by the person who is commonly becoming New West’s lone voice of reason, Jen Arbo.

First, Crosty was clear to point out he is not opposed to the MUCF, as long as it is fully funded by DAC, or the office Tower, as long as it is privately funded. He is rightly concerned about a mounting pile of debt the City is accumulating. He is not opposed to the Bylaw, just that the electorate’s ability to vote on this issue is being bypassed with this quasi-referendum system. Although it seems pretty clear he is opposed to the Bylaw – because he doesn’t want the City borrowing $59Million, and that’s what the Bylaw is for.

I am pretty sure I agree with Crosty on many of his points, if not all of the facts. However, the rub here is not just facts, but outcomes. Part of the problem (as Jen astutely pointed out) being we have little access to the facts, and even less understanding of outcomes, throughout this process. How can we possibly be expected to make an informed decision?

Just to be clear: nothing I am writing below has been verified by any staff member at the City, nor any elected official at the City, so even the “facts” below should be treated with a big bag of salt grains. I have chatted to a few people more knowledgeable than I, and have read over the relevant legislation, but this is my interpretation of what is happening or could happen. The opinions and ideas below are worth exactly what you paid for them. I encourage you to go out and get your own info, and to challenge me on anything I write below that is factually incorrect. I think you should approach Crosty’s information with the same healthy skepticism. Three points to start:

DAC Money: The City is not sitting on a pile of DAC cash to build things with. There is no DAC vault below the Mayor’s Office or a DAC bank account from which the Mayor can write cheques. DAC funds are provided on an annual basis up to 2019 based on gaming revenue. This money is “guaranteed” to the City, as long as the Casino hits its revenue targets (the Casino has shown no signs of not hitting its revenue targets).

With the agreements in place, various projects can be built using the DAC funds, the MUCF being one of them, to the order of $35Million (well, more like $43 Million, but that’s another discussion). However, for the City to get their hands on that $35Million $43 Million, they first have to spend the money, then apply for reimbursement after the project is completed. This is a hassle for the City, as it is not so good for the guys pouring cement in onto the hole on Columbia Street on Monday morning. The cement-pourers want to get paid now, not in 2013 or 2014, so the City needs to borrow money from the Municipal Finance Authority to pay today’s bills in order to complete the project so they can get the money from the DAC funds upon completion. Alternately, they can take money from their reserves, but that money is already earmarked for other purposes (see below), and locking it up now would limit future flexibility in its use. It may even run the reserves too low, and may hurt us in the interest earned on any reserve funds (for example, the City has an MFA Bond fund earning over 3%).

This raises the question: is that $35Million $43 Million really “debt” just because we are borrowing it until the day, a year or two down the road, when the cheque from the Casino clears? It is clearly “borrowing”, so it invokes Section 178 (short-term borrowing) or Section 179 (long-term borrowing) of the Community Charter, depending on how the City’s finance department structures the repayment. That said, if there is a clear, foreseeable, and guaranteed payback scheme not involving taxpayer’s money, and out of it all we get a big asset, I have a hard time calling this irresponsible debt.

Referendum: The implications of the referendum are hard to comprehend at this point. Section 85 of the Community Charter refers directly to Part 4 of the Local Government Act. The legalese gets a little dense, especially as it talks more about elections than referenda, but the process is about 80 days (presumably, once they get and elections office up and running). I imagine it would cost $100K or more, which is not budgeted money, so you can call that operational cost right out of the taxpayer’s pocket. As for more specific questions (how much would the City be able to spend on the “Yes” campaign? Could they buy $1 Million in advertising? ), I frankly have no idea. Anyone out there know?

If the Bylaw fails: If the referendum was to be called and people vote for the lending Bylaw, then I guess we just wasted a bit of time and money, but Democracy is rarely quick or cheap.

If the people vote against the lending Bylaw, then I suppose it is back to the drawing board when it comes to financing the MUCF building and other projects in the City.

The Report to Council that outlines the accounting strategy is available online, for your perusal. Although I suspect they did not anticipate this was very likely, they did include a contingency sentence:

“If the Alternative Approval Process is not successful [translation: if Crosty collects 4500 signatures], the City would need to consider alternative funding solutions, including deferring projects in order to ensure City reserves are available”

So I don’t feel bad not knowing what happens if Crosty gets his 4500 signatures, and a referendum fails. I don’t think the City knows.

Friday’s newspaper article suggests that the MUCF and Tower would proceed, they would just need to find another way to fund it, likely drawing down reserves or from money in other parts of the budget. They are not going to stop building the Tower, not because Council chooses to ignore the people, but because the concrete is currently being poured: at this point, they really can’t stop building the tower.

The idea, once floated by Councillor Puchmayr, of building the MUCF and “capping it”, until a partner is found for the Tower might have been a good one at the time, but I doubt it could happen now. A large building like this is an integrated unit, built from the ground up as one piece. While it is possible (at an increased costs with significant engineering challenges) to only build half a building, bring it up to code for occupancy, then add on the other half later, you really need to have that as your plan on day one. Everything from how you manage groundwater removal in the base to how you construct your elevator shafts, sewage systems, HVAC systems, building envelope, and electrical infrastructure are based on a single integrated design. It is highly unlikely the building was designed to be built half-at-a-time, so it may be neigh-impossible.

The public discourse has to acknowledge that point: regardless of the number of signatures received, or the results of a referendum that may arise, the Tower is going to be built on the MUCF. If the City’s money supply is cut off, then it will not be the MUCF-Tower that gets hurt, it is other infrastructure spending.

It should also be noted, the $59 Million is not all going to the Tower. The Bylaw we are as of yet not getting to vote for includes lending for roads and parks maintenance and other things. This (as Crosty pointed out in his comments) is a bit of bookkeeping. The Municipal Finance Authority lends money at very good rates (currently 1.73%) for Municipal capital projects. The fact the City can build the building based on those rates makes the business case better for the City than any developer who didn’t have access to these rates. Problem is, the City cannot use money lent at that rate for commercial purposes. So they need to use reserves funds for the commercial part of the building, and the MFA lending will be used to finance capital works projects, like roads, parks and sewers, that would usually be paid from those reserves. For people who wish government would be more business-savvy and run more like a private enterprise, here you go.

Even then, the $59 Million is not just for the Tower. The total budgeted cost for the Office Tower part of the project is $33 Million. It is hard to imagine the City will never recover any of that money, and more likely than not, they will recover all of it and make more. That is the risk the City is asking taxpayers to take. So don’t get baffled by $59 Million, or $88 Million, or other numbers bandied about.

And finally, that $59 Million is a maximum number, there is no guarantee that the entire amount will be needed. If a partner is found for the Tower sooner than later, if DCC funds increase (and therefore more reserve money arrives), or if efficiencies are found at any step in the MUCF-Tower project, then the City may not borrow the full $59 Million (as they ended up not borrowing the full amount they were allowed to for the Moody Park Pool, leaving $1.5 Million of potential credit on the table).

Through my reading and discussions with people, I am not really all that concerned about the lending Bylaw itself. I would like to see more of a business case made by the City, but talk to any commercial realtor, and Class-A Office space on top of a SkyTrain line is looking like a sure thing, investment-wise. This building should be a real winner.

But (here is my big But getting in the way): I still can’t shake the feeling that I hate the “alternative approval process”, and the way the City, by need or by design, has launched it during the summer, with very little fanfare (note, the only reason you have heard about it at all is that Crosty raised the alarm), and then have made it difficult for people to distribute and collect signatures, from refusing to provide the blank forms requested to refusing to disclose how many signatures have been dropped at City Hall, making the goal post hard to see.

That said, before I fill out a referendum form (we have until August 7, and you can get the form here, print it off, and drop it at the City Hall Mailbox, addressed to “Legislative Services”), I want to know the outcome either way. Does anyone know?

I’ve been thinking a lot about representative democracy lately.

It is easy to feel, to quote Kent Brockman, “Democracy just doesn’t work”, when you are an Environmental Scientist and you watch Stephen Harper systematically destroy Science and the Environment.

Ms. NWimby, once again, is the voice of reason, and is only incredulous at my incredulity about how far the Harper Government has gone, and how fast. “What did you expect?” she says, “He’s doing what he was elected to do.”

Is this what he was elected to do? In theory, we elect a government to lead by setting policy that is well informed, balances needs, and achieves the goals that the people want to see achieved. (Idealist, yes, but stick with me here). The alternatives are to run a populist party (give the people what they want, whether it is good for the nation or not) or an ideological party (one based on a set of rigid principles that cannot be bent for any reason regardless if the results are what was intended, damn the facts ).

If you listen to Reform Party Strategist Stephen Harper, he was all about people wanting open, accountable government, and all he wanted to do was make Ottawa follow the will of the “the people”. Reform were the ultimate populists when he was drawing up policy in the 80s.

But he isn’t a populist now, and it is pretty clear that his decisions are not made out of a desire to develop good effective policy based on the best science or analysis of the situation. You cannot do that and at the same time cut yourself off from information.

That leaves ideology, and he has, at least since taking power in 2006, worn his ideology on his sleeve: business good, taxes bad. “European-style socialism” the worst. He hates all forms of communism except the profitable Chinese style. He is an open admirer of the United States, and sees the current slow disassembly of their civil society as path Canada would be well served to follow. (<—opinion)

So we shouldn’t be surprised, nor should we expect him to change course even if all of the doctors in the country protest his position on health care for refugees, if all the scientists in the country gather at the gates crying about the death of evidence, when a group of former Conservatvie minsters line up decry the decimation of environmental laws. He wasn’t elected to represent health care professionals, scientists, former Ministers, evidence, or even public opinion. He was elected to support his openly expressed ideology.

Everyone was so worried about Harpers “hidden agenda” that the weren’t paying attention to his declared agenda. And here we are.

So although I disagree with almost every position Harper has taken, and lament the loss of science and data the future leaders could have used to guide good policy, I cannot blame him for doing it. It is his job in representative democracy, and he was elected by us, knowing that was what we were getting. Shame on us.

What I can criticize him for is showing no respect for the electoral system through which he receives his mandate. It is clear there was, at the very least, a systematic dirty tricks campaign during the last election. It was probably not enough to change the overall result, but enough to demonstrate a profound institutional disrespect for the ballot box within the Conservative party.

Again, we should perhaps not have been surprised, as when it was clear the electorate was ready to turf the conservatives from office a few years ago, he prorogued parliament over the Christmas break when it would create the least fuss. Technically, this was not illegal according to parliamentary law, but it was a serious violation of the spirit of parliament, the spirit of representative democracy, and a shitty thing to do.

But I’m getting pretty tired of pulling my hair over the Federal Conservatives. They are a bunch of jerks. Time to move past and make best. However, there have been a couple of recent events in New Westminster that may better relate to this tension between popularity and ideology, and the spirit of representative democracy.

I haven’t said much about the Elizabeth Fry development in Sapperton. I think Will Tomkinson covered the topic very well for 10th to the Fraser, and outlined effectively the political quagmire that it became.

I think this is a situation where there was lots of blame to go around for it becoming such a difficult situation.
The Lower Sapperton neighbourhood took a strong position against EFry, but didn’t seem to have time for any compromise. Nothing wrong with having a strong opinion, and they ran quite a campaign, but they really had a hard time defining exactly what their main issue was. Yes, they sounded “NIMBY”, but their message was confused by using a whack-a-mole technique or issue raising. They were apparently concerned about crime, parking, shadowing, commercialization, the integrity of the OCP, parking, Kelly Ellard, noise, parking…

EFry, on their own account, did not make a strong public case to directly address the concerns raised by the neighbourhood. Whether they felt the concerns were legitimate or not, an OCP amendment is a BIG DEAL, and they needed to go the extra mile to try to get a number of neighbours on board. No doubt EFry does good work, and area vital part of the social fabric of a community, but there is also no doubt the programs they offer have less favourable impacts, and their decision to develop in a way that challenged the OCP should fitfully come with responsibilities to meet the spirit of the OCP in neighbourhood impacts, even if you don’t meet the letter of the OCP. Hopefully, EFry will take this opportunity to prove their detractors wrong and become the best neighbours that Lower Sapperton could have.

That is all past now, the only question left is: what is Council’s responsibility here? There is little double the majority of lower Sapperton residents opposed the EFry application. There is also little doubt that the vast majority of delegates at the marathon council meetings (at least those who do not work at EFry or use their services) were opposed to the project. If you are the type who thinks Council’s role is to represent the whim of the majority on every topic, then clearly they made the wrong choice.

There are at least two other sources of information that Councillors can use in deciding how to vote: information and ideology.

As I said, I was only a passive observer of the events around EFry, but it is possible that council were convinced by evidence that the programs are so needed, that the overall good of the community will be so well served by having them, and the impacts on lower Sapperton can be so mitigated, that they were compelled by the evidence to approve the project in spite of public outcry. That is an important part of representative democracy – electing someone with the foresight and leadership skills to do what is best for the “Greater Community”, even against hyper-local, short-term, or uninformed opposition.

I don’t know if this was the case in the EFry situation, I’d like to think so. However, I think it is safe to say that the other “i” did have a role in how council made the decision.

Without picking names, some of the members of New West Council have ideological positions that they wear on their sleeves as proudly as Stephen Harper wears his. You can call it socialist, or Marxist, or liberal (all terms that can complimentary or pejorative), and you either like them or dislike them for this very positions. Simplified, it is the idea that Government has a role in improving the lives of people, especially those on the margins of society. Like it or not, council candidates that espouse this opinion do very well in local elections. They do not hide this ideology, and they get elected, suggesting that representing that ideology is part of their mandate in Council. When called on to demonstrate leadership against possible public backlash, that is the mandate they have to fall back upon. Really, that is the “representative” part of democracy.

Was The EFry decision based on information or ideology? I don’t know, as I didn’t follow the case that closely. I suspect it was a little of both.

There is another decision that may not have (yet) received the vocal public backlash of EFry, but speaks to mandates and democracy: the MUCF funding and James Crosty’s burgeoning campaign to force a referendum on the issue.

I should say, I am generally in favour of the MUCF. As much as I would have liked the office tower to have been built with private money, I understand the position Council was in when the development deal fell through. I share their opinion that the building is too important to the ongoing renaissance of Downtown to let it fail. With the promise of Class-A office space on top of a SkyTrain line, a central location in the region, and the sweet terms the City can negotiate from the Municipal Finance Authority makes the business rick seem pretty minuscule.

However, the Community Charter creates some pretty specific rules about how Cities manage their finances. One rule is that any Municipal Council cannot borrow money for any term longer than 5 years without a specific mandate of the populace, unless for a prescribed purpose. This sensibly limits any one Council from forever indebting a City, before an election can come along and the teeming masses can toss them out.

So if your City needs to borrow, say $59million over 20 years, they are to seek a mandate from the populace, the most obvious way of doing that is through a referendum.

Cities are reluctant to hold referenda every time they have a long-term project, especially in the anti-tax anti-risk financial era in which we currently reside. Referenda are a hassle, expensive to run, and limit the ability of Councils with specific mandates (be they based on information, ideology, or both) from getting things done. So a City can take the opposite tack: assume everyone agrees unless they take effort to oppose it, kind of a “reverse-billing” referendum. And that is where we are at today in New Westminster, much to James Crosty’s chagrin.

This is not the first time the City has done this reverse-billing thing, and it is not even the first time I have raised an issue about it, but I clearly don’t have the issue-raising prowess of James Crosty.

I’ve said it before, and I will say it again: the current system of putting notice to the public and asking them to, essentially, fill out a ballot if they oppose the lending, is a legitimate one under the Community Charter, but (and I strongly agree with Crosty here), the City is going about this in a crappy way.

The City has put a couple of notices in the City page of the local newspapers, buried between local zoning variances, park events, and safety notices. There are a few thousand words of random legalese, which very few people are likely to read, followed by an invitation to come to City Hall during business hours, read a six-page legal form, then fill out a form, declaring your opposition. A mandate for opposition requires 4,500 individual electors to each come to City Hall during a one-month period in the middle of the summer (a usual dead zone for public consultation).

Demonstrating that this is not a true referendum, there is no funding for organized opposition to the initiative, nary is there time to get one organized in the middle of summer. In fact, according to Crosty, the City will not even provide and adequate number of the 8×11 sheets required to be filled out for any such group who wished to organize around it. If anyone wants to go to the Quayside or to Royal Centre and try to sign up electors, actually spread the word to the electorate who may oppose the long-term borrowing of $59 Million (almost $2000 per taxpaying household) they need to self-fund, and then print their own ballots!

Council only had one meeting between when these notices entered the local papers and when the “voting period” closes, and when Mr. Crosty attended that council meeting to raise these issues, he was (according to Crosty… and the streaming video evidence is not around to counter his claims) cut off after a short period of time, and was denied the opportunity to have his concerns addressed by Council or by Staff in a public forum –the only public forum available for a private citizen to raise concerns about this “referendum”.

You can be for or against the MUCF; with or against the current council: it really doesn’t matter what your ideology is on this one. This is a crappy run-around referendum that surely fits the letter of the Community Charter, but clearly violates the spirit of the Charter.