WALSH – How much avoidable expense can Kamloops taxpayers bear?

HOW MUCH AVOIDABLE EXPENSE is the taxpayer expected to bear? To date, City administration hasn’t taken any responsibility or meted out any consequences for three recent costly errors in judgment.

In fact, since one of the administrators responsible has just been rewarded with a promotion, how can the taxpayer hold City Hall accountable?

One of the top three current errors which I believe will be most costly to taxpayers is the City’s failed Community Service Officer (CSO) union arbitration.

Then-community and protective services director and acting CAO Byron McCorkell made a corporate decision in August 2020 while CAO Trawin was on medical leave. He assured council that it was just an organizational change with no financial repercussions for taxpayers.

Mr. McCorkell should have known that his decision to change job specifications was in conflict with the CUPE collective agreement and the Community Charter. He should have at least consulted with the union and given council correct information.

CUPE Local 900 rightly believed its collective agreement was violated. After costly arbitration over two years, the union won. Depending on how the appeal goes, taxpayers may soon be shelling out upwards of $2 to $5 million in compensation, as well as arbitration and appeal costs.

And what was the consequence for Mr. McCorkell? He just got promoted to Deputy CAO.

Another questionable management decision has paved the way for the taxpayer to cover Coun. Neustaeter’s legal costs. CAO Trawin allowed the councillors to hold a dubious media event in council chambers last March to make a public Statement against the mayor. Mr. Trawin claimed in a public council meeting that the City was protected from any legal liability as the Statement event wasn’t official council business.

He also contended that he obtained legal advice before the Statement event. But a later letter from the City’s lawyer to a member of the public appears to refute this.

It says, “At the April 11, 2023 and May 2, 2023 open meetings of Council, you posed several questions variously to Council and to staff regarding the Statement… CAO Trawin answered your questions as best he could, given the facts that: (a) he did not have the benefit of legal advice.”

Did Mr. Trawin get legal advice or not? Regardless, the taxpayer is now on the hook to pay Coun. Neustaeter’s costly legal fees, plus damages if she loses.

Why did City administration not properly train council on basic decorum, respect, and legal jeopardy? Why does the alleged perpetrator get financial assistance from taxpayers while the alleged victim is left on their own? Why did administration allow a council activity which led to a costly blow-up for taxpayers?

Then there’s the Northbridge Hotel deal. The property was tax assessed at $3.1 million, then privately appraised at $6.25 million in May 2021, yet the City took out a loan and paid $7.15 million for it — $4 million over B.C. assessed tax value.

Apparently, the City bought the property in order to have control over what was done with the site and hoped to sell the front half for ‘market housing’ (Shelter space not part of hotel redevelopment – Kamloops This Week). But, right from the start, the City wasn’t going to have much say, as the deal was contingent upon the City selling BC Housing the back half of the property for $3.7 million for a facility managed by ASK Wellness (City says Northbridge Hotel will be torn down in coming weeks – Kamloops News – CastanetKamloops.net).

The City’s corporate services director justified paying $3.45 million for its half of the property by saying, “In the long term, we will get more property taxes from whatever goes in there because it will be newer and redeveloped.” But that may not be true, since council this year approved a decision to allow developers of new multi-family housing a Revitalization Tax Exemption (RTE) to pay no property taxes for 10 years.

The City also claimed that interest payments associated with the $7.1 million loan would be covered by the rents paid by the hotel’s tenants. But there are no tenants. The place was vacated in 2022 (Northbridge Hotel redevelopment may occur sooner than later – Kamloops This Week).

In order “to attempt to appeal to a broader development market” (Northbridge Hotel set for demolition – Kamloops This Week) the City hired Clearview Demolition Ltd. earlier this year to clear the site for an estimated $2.6 million.

City says Northbridge Hotel will be torn down in coming weeks – Kamloops News – CastanetKamloops.net

Demolition of Northbridge Hotel to begin soon – Kamloops This Week

Most of the interior of the building was removed by the end of June, with the shell expected to be gone over the summer. But it’s almost the end of October and the building is still standing. In fact, I visited the site the other day and it seems there’s nothing going on there at all right now. The place is boarded up.

If I were still on council, I would be asking about this, because the clock is ticking. The City borrowed the $7.15 million purchase fee without going to the taxpayers, who are supposed to be consulted for any borrowing over $5 million if the loan can’t be repaid in full within five years.

I would be wondering about the reason work has stopped. When I visited the former hotel, I saw an array of TELUS communication equipment located on the roof. Is TELUS having a hard time finding another location? Is there some sort of lien or binding legal contract that was overlooked at the time of sale?

Even if the site is cleared and the City finds a buyer before the loan comes due, the likelihood of the City reaping all the costs associated with the property is slim to none. The remaining property the City now holds has a minimum $3.4 million investment, plus the $2.6 million demolition cost, plus other unknown expenses.

I am left wondering if there are any developers willing to pay $6 million or more for just 30,000sf of vacant property on Tranquille. How much will it end up costing taxpayers if the City can’t recover monies spent on this market development acquisition in the Tranquille corridor?

The legacy of this runaway administration rubber-stamped by City council seems to continue unabated. Where is the incentive to do right by the taxpayer when questionable performance is ignored — and even rewarded?

Denis Walsh is a former three-term Kamloops City councillor. He chose not to run again in 2022, convinced that City councillors should step aside after a maximum of three terms to allow others to serve and to experience being on the “outside looking in.”