Commentary on the March 14 Council Meeting

Ron Bolin:  March 16, 2011

Monday’s four hour plus Council meeting generated some heat but not a lot of light. Issues of lasting concern which were broached included: , the transfer of $1,357,000 in taxpayer funds to an “Arm’s-Length Economic Corporation”; the Brechin-Newcastle Neighbourhood Plan; an Amendment to the Zoning Bylaw in the case of Containers; and a Business License Amendment Bylaw which would restrict the hours on a proposed 7/11 store which was approved at the last Council meeting.  For a variety of reasons these matters all involve complex issues which have ongoing significance for our city and for our financial viability.   These are all issues which, in my estimation, require reflection and will be dealt with in separate posts

Up first (item 9(b) in the agenda and in the video available on the city web site) was a recommendation to “direct the (Economic Development Commission) to proceed with the establishment of an Economic Development Corporation within the constraints of existing City funding levels and appoint the existing Commission members as the interim board of directors;”. This recommendation passed and the sum of $1,357,000 (the amount shown for the “existing City funding levels”) moved, in effect, from the monies entrusted to our Staff, to the account of the not yet registered Corporation.  The report further noted that this sum did not include all costs.

The current plan, as approved, indicates expenditures of $1,497,000 which is to be pruned to the currently approved sum by not filling all positions in this first year or enhancement by other means.  No budget estimate was provided for the other four financial plan years. The proposed budget, sans shortfall, indicates Staff costs of $760,000 for a complement of 12 Staffers at an average cost of $63, 333 each and consumes over half of the budget.

The report provided waxed eloquent, if noncommittal, on the possibilities of income to the Corporation from regional alliances and projects and on the long discussed but thus far rejected idea of a provincially permitted 2% hotel tax which is used by many communities to help pay for the infrastructure required by tourists and overnighters.  This latter sum was estimated, if approved by the Nanaimo Accommodation Sector Association (NASA), at $400,000. If the hoteliers approve the 2% hotel tax, a move which is their prerogative to approve or deny, where does this money go?  Back to the taxpayers or into the coffers of the Corporation?  If it all goes back to the taxpayers, are the hoteliers sufficiently moved by the idea of the Corporation to be willing to leave behind the free ride in this regard which they have enjoyed until now?

While the idea of an Arms-length economic development corporation may be a good one, I would suggest that the proper model would be for those most benefitting from the plan (I would not deny that we may all benefit, but some certainly benefit considerably more than others.) to establish and fund the corporation directly and request some interim funding from Nanaimo taxpayers.  Given $400,000 from the hotel association, $70,000 in membership fees, some substantial funding from the Chamber of Commerce (while not double taxing the hoteliers) many of whose members will benefit most, and using its skills to undertake inter-corporate and regional growth contracts, the burden on taxpayers would be reduced and the independence of the Economic Development Corporation would be greatly enhanced.

The present scheme tries to play both sides of the dependent/independent net.  It is neither a sustainable nor a stable model.  While the concept may be good, I doubt that any legitimate bank would fork over funds on such a flimsy business plan and do not believe that our taxpayers should either at this time.

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