Two days after Christmas the Ontario Municipal Board ruled that the City of Hamilton Waterfront master plan, known as Setting Sail could proceed. The decision ended years of litigation between the city and North End residents. Earlier the City had come to an agreement with CN Rail who had also initially opposed the plan. The plan sets out a course for development of the entire West Harbour area extending from Dundurn Castle to the HMCS Haida.
Only a few days earlier the Hamilton Waterfront Trust submitted a list of capital funding requests as part of the Capital budget process for 2013-14. The HWT is asking for $4 Million to install sewers and to construct two buildings on Pier 8, the pier that currently contains the Discovery Centre and the Williams Coffee Pub. Given that there is no record of the HWT receiving approval to act as the contractor for the development of Pier 8, the Bay Observer contacted senior staff and members of council, including Councilors Tom Jackson and Jason Farr who are members of the HWT, asking the following question.
The HWT Capital request has the following items for 2013-14: Construction of Sewage Station and connection to existing Sewers on pier 8 – $1,500,000, Site Servicing & Parking Road Improvements for New Commercial Buildings on Pier 8 – Proposed construction of 3 separate buildings (120,000 sq.ft. of commercial space) on HWT lands – Phase 1 = $1,000,000 in 2013 – Phase 2 =$ 1,500,000 in 2014.This would appear to mean that HWT is expecting to be the site developer if the city is successful in getting Pier 8 back from the HPA ? …Has there been a council motion approving HWT in this role?
[box type=”info” align=”aligncenter” ]How a City Council motion morphs into a spending request. What the public heard: In November of 2011 the Hamilton Waterfront Trust appeared before Hamilton’s General Issues Committee to discuss its financial shortfalls. Mayor Bob Bratina had requested the accountability session after the HWT had posted a large loss in 2010. The session produced few answers of a financial nature, but nonetheless Council, in a standing recorded vote orchestrated by HWT supporters on council, the HWT was given a unanimous endorsement. Following that vote Councillor Chad Collins, who chaired the HWT from its inception until 2010 made the following statement: We’ve talked a lot about where we’ve been, and I think you heard some issues or some comments about where we are going, and I think along the lines of Clr. Jacksons comments about better communication…we heard today from Chairman Charters that in terms of what the city’s future relationship with the Waterfront Trust will remain to be seen. But I think it is important that maybe we direct our staff to meet with the Trust in terms of the 2012 capital priorities and have both parties or one party report back to council for some consideration, and or comment. What the actual wording said: The actual motion that had been provided to councillors read as follows: That staff be directed to meet with representatives of the Hamilton Waterfront Trust to discuss 2012 capital priorities and that both parties report back to the General Issues Committee with that information FOR CONSIDERATION AND/OR COMMENT. Financial Implications of the motion: At the December 2012, GIC meeting to discuss the capital budget for 2013, that 2011 motion is cited as justification for a request of $4 Million by the waterfront trust to install sewers and commercial building on Piers 7 and 8. [/box]
As of press time only one councillor, Lloyd Ferguson had responded.”Not to my knowledge” was his reply. In other words the Hamilton Waterfront Trust has not, at least not yet been given authority to install sewers and build commercial properties on Pier 8. Indeed, Setting Sail, which governs development on the site, seems to suggest that the project go to the private sector. The document calls for the establishment of an Administrative Body to oversee the entire project and goes on to say: “The Administrative Body established for the development of Piers 7-8 may seek requests for competitive proposals from private developers in order to best implement the vision in this Plan.”
The fact is that the city at present does not have control of the portion of Pier 8 that is under consideration for development. Last summer, however the City entered into negotiations with the Port Authority to get control of the land earlier than the 20 years that had been negotiated as part of the settlement of a lawsuit between the City and the Hamilton Port Authority in 2000. The Port has long said it would abandon the property once the City came forward with a concrete plan for development of Pier 8. While various concept drawing have been floated , no council decision has been made on a final design. Last May the city gave HWT $200,000 to “to complete studies that will accelerate the public and private sector development of Piers 5, 6, 7, and 8, including but not limited to issues of site servicing, geo-technical, soils, remediation, as well as development phasing, marketability, and valuation.” Nowhere does the document suggest appointing HWT as a contractor to develop the property.
In a series of articles in 2011 and 2012, the Bay Observer has reported on a culture of non-transparency in the HWT’s dealing with stakeholders and its apparent sacred cow status with City Council from whom the HWT derives the bulk of its financial support. Some examples include:
- Apparent over-charging of the City and the Provincial Waterfront authority by nearly $500,000 for construction of a washroom on the Beach strip.
- Racking up operating losses of $1.9 Million to the end of 2011.
- Under-stating losses through a variety of book-keeping exercises.
- Failure to submit financial statements to the city as required by the deed of trust establishing the HWT
- Concealing an adverse audit opinion issued about its 2005 financials. This is particularly serious since Waterfront Trust members who are also city councillors have a responsibility to make the council aware of any potential liabilities that might have a negative impact on the city.
- Potential conflicts of interest in its dealing with the Hamilton Conservation Authority.
- Nepotism in provision of employment to relatives and others with ties to trustees.
- Instances of non compliance with the City’s own building and planning department.
- Differential information provided to HWT trustees.
Despite the concerns, city councillors seem unable or unwilling to, at the very minimum, request an independent audit of the HWT. Instead council in the past year has provided, in addition to the $200,000 for studies into Pier 7 and 8 development, $1.3 Million to complete an addition to the Williams Coffee Pub. The latter was provided without a detailed budget. City financial staff has told the Bay Observer that the city has provided the trust $8 Million for trails and other amenities over the past decade, requiring only an invoice listing of the costs from the Trust. Original supplier invoices are apparently not required. Former City Treasurer Rob Rossini told the Bay Observer, “That’s the way we pay for projects done by our own works department, we pay on the receipt of summaries of costs. We don’t have the resources to dig through all the backup invoices.” In fact, the city has on several occasions, provided the HWT with advance payments on projects, only requiring documentation after the fact, and even then relying on HWT summary statements.
The problem is the Hamilton Waterfront Trust is not a city department, at least not when money was flush. It prided itself on its independence from the city bureaucracy. Councillor Tom Jackson, a Trust member, told the Bay Observer that he believed the Trust could not have achieved its impressive development of the waterfront had it been operating as a city department. This prompted a long-time city employee, now retired to comment, “Perhaps Councillor Jackson is suggesting that city policies like the purchasing and hiring policy be repealed to allow city staff to have the same unencumbered opportunity afforded the HWT. Hamilton has developed comprehensive policies which are intended to protect taxpayers’ interests and ensure that council, staff and contractors conduct city business in an ethical manner. It appears that there is a desire to circumvent these policies through the “outsourcing” of the waterfront development. “
The question for Hamilton taxpayers is whether we know enough about the HWT to give it carte blanche on this next phase of vital waterfront development. Burlington governance expert and former Hamilton external auditor Fay Booke, who has seen HWT financial statements, said, “The use of public funds demands not only accountability and transparency but also clarity – clarity of purpose, clarity of relationships, clarity of reporting. This situation seems to lack accountability, transparency and clarity. The taxpayers of Hamilton should be asking questions on the use and accountability of the funds. For good governance… there needs to be contractual arrangements between the City and HWT with clear deliverables and clarity of responsibilities.”