Letter: Questions for prudent taxpayers to ask

There appears to be a number of reasons why prudent taxpayers should be questioning the leadership on [CN Rail purchase] project.

To the editor:

Wednesday [April 8] I listened to a talk show host and the City of Kelowna real estate manager extolling the benefits of the CN Rail acquisition—Kelowna to Vernon.

The presentation indicated that all that was outstanding to do was finalize a $2,600,000 funding from Lake Country (LC) and all would progress to the benefit of the valley community.

Further, the yes side should be the only reasonable way to vote.

They then asked for the no side to defend itself.

I do not live in Lake Country but follow the news and, trusting the reporting is reasonably accurate, there appears to be a number of reasons why prudent taxpayers in all jurisdictions should be questioning the leadership of this project.

Some (but not all) of the questions raised are:

1. The purchase price of $22 million, when many jurisdictions acquired rails for trails abandoned lines for $1 and a fair market value charitable receipt or similar arrangements. Why was this not the option for this rails to trails project?

2. As these lands are no longer rail lines, would the property become a taxable industrial parcel, something LC lacks? Would CN Rail want to pay tax at industrial levels for years to come, or would they be happy to get out of the tax and legal liability risks by more generously transferring lands to this project and using the Income Tax Act to assist a government group in the acquisition of the property?

3. The reported total obligation of LC is $5.2 million, or 23 per cent of the total. The referendum funding request is for $2.6 million, the balance of $2.6 million is a short-term loan to LC by Kelowna. There has been no reported commitment to fund the remaining $2.6 million LC owes to Kelowna, why not disclose this and vote on the full $5.2 million?

4. The major financial benefit will go to the tourism industry which is heavily weighted to Kelowna and Vernon. Should not those municipalities pay for the cost in proportion to the economic benefit?

5. With a total population of approximately 200,000 between Vernon, LC, and Kelowna, and LC having less than 12,000 residents or about 6 per cent of the population. The user groups resident in the valley are over 94 per cent outside of LC. Should not the users pay proportionally? Why does LC pay so much more per capita to participate?

6. The allocation of costs is apparently based on kilometres in each jurisdiction, which results in it being disproportionally skewed to LC, an unfair outcome in the view of many.

7. The talk show indicated a lot of options for funding ongoing costs exist, but none has been set out by the yes side. With no firm plan set out to look after the future taxpayers in LC, should the taxpayers commit to this future risk of costs?

8. No government or bureaucrat has ever got the future costs estimates correct in living memory! With no signed financial commitment on the future operating costs, why should the LC taxpayers take a disproportional cost into their future tax funded expenditures?

9. There are reportedly landholders with rights-of-first-refusal that will not be putting those rights into the deal, thus not allowing the municipal governments to be certain of the price. A landowner who fought CN Rail for years to obtain those rights values them highly. The yes side, likely mistakenly, assumes they will not seek a premium to transfer them into this deal after the fact. Some may wish to keep the land and finally enjoy unfettered free use of their lands, thus breaking up the continuous corridor envisioned by the yes side. Why should LC take this risk of higher cost or loss of continuity?

10. There also claims of First Nations rights to the lands upon abandonment of the railroad operations. There will be huge legal costs in dealing with that issue and based on the historical settlement process, several generations may wait to see the final outcome of that litigation. Clearly there will be unforeseen and unknowable dollars in lawyers’ fees with a high percentage chance that First Nations will win any claim in B.C. Why saddle the future generations with that risk and cost?

11. If this is such a simple and good deal why not make it a provincial project and let the province shoulder the cost and risks on behalf of all B.C.? It seems the province wants only a one time fixed known cost and they will donate $7.2 million but that is the end. Why shouldn’t LC take the same position as the province to protect LC’s precious tax dollars?

12. The proponents of this deal and the yes side have not done sufficient due diligence and it seems the no side are ridiculed for saying slow down, get all the facts and costs on the table before making a commitment. Isn’t that just good governance?

13. The no side clearly sees the wisdom of certainty over the “the corridor of dreams” with no known purchase cost, no known title, no known operating costs, and seeing  future cost escalation, known title risks, known operating losses, and known disproportional ongoing costs per capita.  Shouldn’t LC taxpayers question this if they believe it is an unfair deal too costly for the LC taxpayers?

14. There should be clarity to the yes proposal, but it is not at all clear or concise in the detail. Is it not always that the “devil is in the detail”? But haven’t the proponents failed to do the hard work to build a solid case for going ahead?

15. The proponents have also skewed the costs against LC taxpayers in favour of other jurisdictions, it may not have been intended, but that appears to be the result and the no side are right to draw these issues out and get them on the table for the vote and before any deal is finalized.In my view, while the idea is worthy, the proposal tabled appears seriously flawed and lacks complete disclosure, and therefore should be turned down in its present form.

Doug Waines, West Kelowna

 

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