Through FOI and recent In Camera meeting disclosures, the South Vancouver Parks Society has become aware of how City staff created a discrete expense account to carry out specific contracting surrounding the sale of 508 Helmcken (the “508 Sale”). The discrete expense account has made their disclosure of the City’s related contracting almost undetectable.
A March 24, 2015 City report “The Report” related to the “508 Sale” is a prime example of the discrete nature of city spending, to which we have attempted to shed light. City staff had contractors such as Ernst & Young, fund other City contractors such as Burgess Cawley Sullivan Associates on the City’s behalf. This was after the City explicitly insisted that Burgess Cawley Sullivan Associates “BCSA” be engaged, and agreed to pay BCSA through the assistance of Ernst and Young. The Report contracted by the City required a commercial appraiser and BCSA were demanded for this task. As of today, there has been little to no expense information disclosed by the City regarding the Report.
FOI requests by our Society managed to force the City to disclose several 508 Helmcken related In Camera reports. One was the October 22, 2012 “in camera” City report authored by Michael Flanigan (the former City Director of Real Estate Services) before he moved on to BC Housing where he became involved with approving loans from BC Housing for the 508 Sale, which these contracts relate to. Mr.Flanigan was credited by in a March 10, 2015 City report as creating the value for 508 Helmcken for sale purposes. The City has so far said that the value he determined was $15 million dollars for the ½ acre site downtown. The report said:
The October 22, 2012 City of Vancouver report described the soon approved spending account. The spending account was to cover a number of different 508 Sale related City spending expenses which there has been virtually no clarity. City staff called it (the “Project Management Budget”), and said it would be funded by something they termed as (the “Affordable Housing Fund”) or the “AHF”. The purchaser of 508 Helmcken was required to eventually replenish the AHF with a $1 million dollar contribution. The expense account was given a $1 million dollar budget although it appears not to have really had any limits applied to consulting and legal costs as documents appear to suggest. None of these contracts appear to have been awarded through a competitive process or posted on the BC Bid website and none of the contracts can be found in the annual City procurement reports.
Below:Surrender of Lease Contract
City staff directed this obscure contracting and the City must have the care and control of all contracting documents linked to their contractors, subcontractors and so on. The City cannot contract out of its obligation to comply with the ACT, and must provide all requested details for the five organizations listed as fulfilling the City requested and funded report. The convoluted funding arrangement appears to effectively hide payment and contracting records between the City and its contractors and subcontractors.
Below: May 15, 2013 Development Agreement
When the City engages in procurement, they must not prepare, design or otherwise structure a procurement, select a valuation method or divide procurement requirements in order to avoid the obligations of the ACT or Trade Agreements. This would include actions such as dividing required quantities or diverting funds to non-covered subsidiary agencies or nominees in a manner designed to avoid otherwise applicable obligations. Where the City uses a third party to conduct procurements on its behalf, the third party must ensure such procurements are conducted in accordance with the City’s procurement commitments under the Act and applicable Trade Agreements. The City must ensure that documents requested are provided in a non-discriminatory manner and that upon request, provide promptly any information necessary to determine whether a procurement was conducted fairly, impartially and in accordance with the applicable obligations.