The Khyber is saved
Without warning, this summer city staff put The Khyber on the list of surplus properties, which is a relatively new process meant to identify and sell off properties the city no longer needs or are deemed to expensive to keep.
The staff report gave little in the way of details. The entire issue with The Khyber was contained in this graphic:
The $4 million+ figure came as a complete surprise, because as recently as 2010, a staff report laid out these costs for bringing the building up to snuff (what’s called “recapitalization” in this summer’s report):
So in four short years, we’ve gone a reconstruction cost of $586,000 to $4,150,945, a 600 percent increase. How did that happen? Staff has still not released the inspection report or cost analysis justifying the higher cost, but staffer Jane Fraser told council Tuesday that some of the additional cost was related to asbestos removal.
In the summer, I was pessimistic that council would act contrary to staff’s recommendation. Council discussion of the issue didn’t bode well, but thanks to an over-loaded summer agenda the issue was deferred until yesterday’s meeting.
In the meanwhile, Khyber supporters organized. A commenter on my Morning File post yesterday took me to task for only mentioning Joel Plaskett as an organizer—about 100 Khyber supporters showed up at council yesterday, and presumably many of them donated considerable time and effort into the cause, but Plaskett’s name recognition went a long way. As Dartmouth councillor Gloria McCluskey said, “I’m going to support it, because when you have the great Joel Plaskett crying on your shoulder, how can you resist?”
Councillor Waye Mason took charge of the issue, raising questions about the need for asbestos removal, staff’s failure to implement previous council direction on The Khyber, and the importance of using the building as a cultural centre.
Putting the cost in context, Mason said if you consider that the city acquired the building in 1988 for $1, and that very little has been expended on maintenance over the years while rent income was coming in, something like $5 or $6 million dollars total has been spent on the building over the years—”$50 or $60,000 a year,” Mason said. “So what? That’s far less than we spend on rec centres.”
Whether it was because of the army of arts supporters, Plaskett’s star quality, Mason’s persuasive arguments, or simply a desire to make the issue go away—”I’ll support this on one condition: stop sending emails!” joked councillor Barry Dalrymple—council unanimously voted to remove The Khyber from the surplus property list pending a couple of more detailed staff reports. One of the reports will spell out the building condition. The other will explore how The Khyber should fit in the city’s cultural plan, and what kind of federal money is available for that project.
It’s possible that the building could end up back on the surplus property list, but my sense of things is that’s highly unlikely.
Halifax Water governance
Here’s how I explained this issue Monday:
Halifax Water is entirely owned by the city, but council has no direct authority over the agency. Instead is is quasi-independent, with rates and other issues regulated by the provincial Utility and Review Board. This hands-off arrangement is by design—councillors didn’t want to pay a political price for increasing rates. When council finally got around to creating a sewage treatment system for the older parts of the urban area, there was a certainty that residents would see huge increases in waste water rates, and so in 2007 council also shifted the sewage system to Halifax Water’s control. In fact, sewage rates will likely soar in coming years as new federal environmental regulation require billions of dollars for upgrading of the entire system.
But this distancing of Halifax Water from council creates many odd paradoxes. As the staff report points out, council appoints four of the seven board members of Halifax Water (three councillors and the mayor), but once those board members are appointed, their fiduciary duty lies with Halifax Water, not with council. I can’t think of many situations where the owner of a company has no control over what that company does (there are some blind trusts for politicians, but that’s a different matter).
Making the situation even weirder, while the UARB determines rates and policies, council determines the service districts. While council has no control over Halifax Water finances, the city’s auditor general, who is a council employee, has the subpoena power to examine Halifax Water’s books.
Finance Director Greg Keefe made three broad sets of recommendations which would basically reassert council control over certain aspects of Halifax Water, including:
• controlling the scope of Halifax Water such that council would have to approve any outside contracts or new lines of business. Keefe used the example of Halifax Water contracting with some other county or municipality to run their water system, which would bring unexpected liability to HRM.
• Stronger control over Halifax Water’s indebtedness.
• Limiting executive pay. Keefe suggested that any salary over $250,000 must be approved by council.
• Better reporting to council of finances.
• Enter into “shared services” agreement between HRM and Halifax Water for things like payroll services and other administrative needs, where such agreements save both entities money.
• Creating a “competency based” board of directors for Halifax Water.
I think all of these recommendations make good sense, except for the last. “Competency based” boards are the newest thing with the managerial class, and are designed to keep politicians and citizens from having a say in how things are run. They are inherently anti-democratic, and should be resisted.
Still, with the exception of the board issue, Keefe was recommending changes that would prevent a potential future scandal. Consider, for example, that the concert scandal could unfold as it did because council had inadequate control over a Metro Centre bank account, which allowed Trade Centre Limited to bring liability onto the city without council’s knowledge or approval. I could see something similar happening with Halifax Water, and Keefe is trying to clarify the blurred lines of control.
But many councillors reacted with horror at the suggestion, because they fear that somehow council will become responsible for water rates. The argument goes like this: providing water and sewer services necessarily involves making expensive long-term capital investments which can only be funded by increasing rates, and politicians don’t have the courage to do the right thing, so will vote against anything that will increase rates.
It’s curious that councillors argue publicly that they are a craven and unprincipled lot, but there you have it.
Of course, many city councils across North America have direct control of their city’s water department, and the sky doesn’t fall. And Keefe’s proposals didn’t include giving council authority over rates in any event.
Still, rather than risk having to behave like responsible politicians, council kicked the entire issue to committee. We’ll deal with it again in a few months.
Chimineaing while drunk
The regulation of chimineas and backyard burning generally is a big issue for people with asthma and other breathing difficulties, but there’s not a lot the city can do about it.
The city has regulatory power over two things: it requires backyard burning to end at midnight, and it prohibits such burning by intoxicated people. Even then, the regulations are complaint driven, so if your neighbour is drunkenly feeding the chiminea at 2am, you have to call 911. They’ll send out a fire truck and the firefighters will look at the chiminea, see the drunk dude, and tell him to knock it off. It actually takes two such incidents before the legal system is involved, and I doubt seriously firefighters carry breathalyzers with them or have the power to force anyone to take a test, so I don’t know what the point is.
Maybe people should learn how to talk to their neighbours.