Almost 1,700 Squamish residents voted in favour of forcing a referendum on the municipality’s proposal for a new public works facility. This rare occurrence may throw the District’s financial plans into disarray.
During council’s meeting on March 1, District staff revealed that the alternative approval process that sought residents’ permission to borrow about $16 million for the new public works facility was denied, which will force the municipality to put the matter to a referendum.
An alternative approval process is initiated during big decisions like a pricey loan. It allows people to vote against a proposal. If 10% of the voting population sends in a ballot expressing their displeasure with the idea, it is forced to go to a referendum.
It’s highly unusual for alternative approval processes to gather such participation from the public. They are a routine part of local government.
The results appeared to dismay at least some elected officials.
Coun. Doug Race said that this was something he’d never seen in his 14 years of office.
“I can’t remember the last time in Squamish this has happened,” said Race.
“This is an unusual circumstance, obviously well-co-ordinated by somebody. And I can only say that, from my perspective, this building must go ahead before any of the other proposed building projects. The first two are the fire halls and they are [a] given from my perspective. This is the third one. And this will go ahead somehow before we tackle Brennan Park and the library and other projects like that.”
He added that it was hard for him to understand why people voted against the proposal to fund a vital facility.
“I didn’t receive any kind of correspondence from people, or emails or anything of the like saying that they’re upset with this or upset with that,” said Race. “There is an element in our society today that just seems to like to sow chaos.”
Robert Forsyth, a local resident who helped rally votes in the alternative approval process, said he was not against the creation of a new public works facility.
However, he said his concern was what he called a lack of transparency in the process.
“For the past couple of years during this COVID, the council hasn’t really been very transparent in all their actions,” said Forsyth. “And there hasn’t been a lot of room for public engagement…Because there’s been no pushback from the community, the staff all have free rein on their proposals to council.”
He said there were problems with the communication of this project.
“How is it that we’re supposed to give a blank cheque for $16 million to a two-dimensional drawing that’s not even legible?”
There were also design features of the building that he questioned, such as its amount of office space.
“Most of them have been working from home for the past couple of years anyway, so why really do they need these offices?”
He also said items like the public works facility should’ve been an amenity that was paid for by developers as a condition of rezonings, rather than put on taxpayers.
District Financial analyst Rolland Russell said provincial regulations prevent development cost charges, — the funds that municipalities receive from developers to build infrastructure — from being used to fund the public works facility.
“[Development cost charges] are regulated by the provincial government,” said Russell. “The provincial government allows DCCs to fund infrastructure in ground assets. [It] does not permit DCCs to fund above-ground assets.”
He added that the province says a public works facility, unlike more popular projects like Brennan Park, is a critical facility.
“Public works is required because it supports roadways, water and wastewater and roads, which are legislated requirements for the municipality to provide,” said Russell.
Many people in the community might feel that recreational facilities are critical, he said, but they are not as urgently needed, because they provide leisure and entertainment, rather than legislated requirements.
Mayor Karen Elliott said that taking away the municipality’s ability to borrow for this project will not speed up the process for other projects.
“We still don’t have the money,” said Elliott. “We were asking to borrow money. So it’s not like there’s $16 million there that we can just put towards something else. This is something that was baked into a very thoughtful and strategic plan so that we could catch up on the infrastructure deficit that we’re under.”
Charlene Pawluk, the District’s manager of legislative services, said the municipality also has the option to hold another alternative approval process. However, to make it in accordance with best practices, it would ideally contain changes to address any concerns voiced by residents. It should also be preceded by a robust communications campaign.
Pawluk said the municipality has options to hold the referendum either before or after the local government election in October.
It would be a pricier endeavour to hold the referendum before the October elections. One estimate she gave indicated that a referendum held before April 29 would cost a minimum of $52,000.
Robin Arthurs, general manager of corporate services, said given the time crunch, it would also be unlikely that the municipality would be ready for a vote by April 29.
On the other hand, holding the referendum during the October elections, and attaching the question regarding the loan to the election ballot would cost at least $19,000.
“This is a critical facility that has critical infrastructure we need to move out of the floodplain,” said Elliott.
“And that doesn’t particularly garner public interest, but we can’t deliver our core services like clean water and taking care of wastewater and managing the day-to-day operations of the District without it.”
Arthurs said that a new alternative vote would have to be soon for it to not be an election issue.
Heather Boxrud, the chief financial officer, talked about potential funding options for the public works facility.
In the latest District budget, the public works facility was expected to cost a total of about $20 million. It would be funded by $15 million borrowing and $5 million from the land reserve, which would involve the sale of District assets. The District opted to borrow about $16 million to account for possible cost variations.
However, staff report the estimated costs have since increased to about $23.8 million, which would prompt the need for a pricier loan of up to $19 million.
Boxrud said that there were several ways to pull together funds for the project.
The ideal way, she said, was to choose the path of long-term borrowing, which was the proposal that residents shot down during the alternative approval process.
Boxrud said that staff had found this would have the least impact on the taxpayer, as it would spread the payment for the facilities over a longer period of time for current and future taxpayers, as opposed to leaving current taxpayers to foot the entire bill.
She said it would also allow the District to use the Municipal Finance Authority, which pools resources from communities all over B.C. to allow them to get better deals on loans.
Under that proposal, borrowing $18 million would create an annual cost for residents of $9.50 per $100,000 of assessed property value. Commercial owners would pay $24 per $100,000 of assessed value, Boxrud said.
If the District chose to fund the project entirely with property taxes and forgo the prospect of getting into debt, it could pay 50% of the cost for the first year, and 50% for the next.
She said this would cost $68 per $100,000 of assessed value for residents and $175 per $100,000 for commercial properties.
Another option would be to use the land reserve, which would involve selling municipal assets. It would take time, impact future projects, and affect the 10-year capital plan.
Yet another option could involve a combination of the options that she presented.
There were other options that she presented, which were not recommended. They were short-term borrowing; drawing from the general and capital reserves, and inter-fund borrowing between the utility funds and the general fund.
However, there were issues such as risk exposure and a lack of money left over for emergencies, among other things, that made these final three options unfeasible, she said.
There are no grants available, Boxrud added.
Council will reconvene at a future date to make a decision on this matter.