Monday, July 25, 2022

The Mirau Manifesto: Councillor expands on Mayor's State of the City Presentation on PRPA related financial themes

The ebb and flow of a conversation on the financial challenges facing the City of Prince Rupert has now seen a new entry into what has become a trilogy of talking points. 

The latest to the discussion that of an overview for the topic of the Port Property Tax Cap from Councillor Blair Mirau.

Mr. Mirau picking up on a previous correspondence for the local paper, which came from the Prince Rupert Port Authority (see our notes on that contribution here) which offered up a rebuttal to some of the comments from Mayor Lee Brain's State of the City presentation of June. 

Items from the night at the Lester Centre that related to the financial challenges for the city which he attributed to the Port Property Tax.

Last week, the Councillor who in February stated that he would not be contesting the fall municipal election, offered up some guiding thoughts for the council members that will be elected in October. 

In his own letter to the Editor, he urged all that may be considering a run for office to hold firm to the current Council's line and approach to the issue.

Having read the Port's commentary, Mr. Mirau answers it with a manifesto with four key points of his own directed towards the Prince Rupert Port Authority and how he believes that they view the city's concerns.

The Councillor observing that the Port Authority doesn't understand, nor care how dire the impact of the Port Tax Cap is for the community's survival.

The councillor seeking to take his comments to as large an audience as possible beyond the local newspaper, reposted his letter to his Social media page Friday evening  gaining some notable salutes from his followers through the comments option from his post.

From Councillor Mira's Facebook page
(click to enlarge)

Mr. Mirau's contribution to the social media currents was also applauded by fellow councillors Barry Cunningham, Reid Skelton Morven and by Mayor Lee Brain. 

The tone of those contributions that of a populist bent that once again has Council shaking a collective fist of sorts.

Though it's worth noting, that eight years of this Council taking those concerns to the province as they have at every Budget preparation period over two terms, have seen both a BC Liberal and now an NDP Government in charge at the Legislature seemingly not quite viewing things the way they do. 

With no movement seen to date on the issue, that despite some of the at times bombastic approach that has been taken on by City Council members.

When it comes to a debate such as this, everyone is allowed to present their interpretation of the facts, just as Mr. Mirau has done. 

And in the case of the Port and Province vs the City Council members, there is clearly a chasm that has yet to be bridged when it comes to how the mechanism that is the Port Property Tax Cap is being applied and the lack of fairness that the City finds from it.

Short of an independent study that would provide some clarity without the self interest on all sides, it's hard for residents to really gain a full appreciation for both the challenges for the City and the value of the financial instrument that the Port says that the Port Property Tax Cap has provided towards development of industry in the community.

Though without the investment in the Port industries over the last two decades that have taken us to today, one wonders what Prince Rupert might look like at this moment in time and what kind of topics might have made for civic presentations and letter to the editor writing.   

A hint perhaps towards that scenario came at the recent Annual Public Meeting from the Port. 

As we noted on Friday as part of our notes on the retirement of  Joe Rektor, the Vice President of Finance for the PRPA. The VP of finance had recounted that upon his first financial review back in 2000, the Port had written off 15 million dollars on the then little used Break Bulk facility at Fairview.

"And so I went into our history books here and was able to find out that I reported on revenue of 6.4 million for the Port and expenses of 6.4 million and a Net Loss of fifteen million.

And the reason for that was, that at that time and this was you know pre containerization of Fairview, we had taken a fifteen million dollar write off of Fairview Terminal to really reflect that the utility at that point in time had effectively diminished to almost zero value." -- Port VP of Finance Joe Rektor at the June Annual Public Meeting

It would appear, that had there not been a shift in focus for the Port for its future and the attraction of new stakeholders along the waterfront, there would be few jobs and more than likely far less residents  in Prince Rupert than even the declines of the end of the pulp mill era have delivered.

Beyond the employment that has been created and delivering a growing number of home owners that would pay property taxes to the city, there have been other benefits to the community outside of the industrial tax issue.

Much of that has been created through the Port's Community Investment Fund, whether they be school playgrounds, supports for local community groups, assistance for the City's Lester Centre of the Arts , or investment into community recreation. 

Two instances of which Councillor Mirau in his full time job as the CEO of Gitmaxmaka'ay Nisga'a Society would be familiar with.

Those being the creation of the Seal Cove Salt Marsh and the investment into the Rushbrook Trail a pair of quite popular additions to the city's recreation spaces that are now one imagines providing for some foot traffic and solid revenue streams for some keystone Gitmaxmak'ay Nisga'a Businesses. 

Those found in both the Yaga Cafe and Bob's on the Rocks, both of which fulfill a popular real estate mantra of location, location, location.

So clearly, outside of the Port Tax themes, there are some benefits to having the Port around to foot the bill on any number of community projects ... 

Also of note towards what may be an acknowledgement from the PRPA of the city's ongoing fiscal challenges, is a recent initiative put forward by the Port through a recent BC Bid call for proposals. 

Something we noted earlier this month  which has the PRPA currently exploring opportunities for an Emergency Response Centre to be constructed on city land behind the Lester Centre, a concept which seems to be something that would help with the city's need for a new Fire Station.

"PRPA and the City of Prince Rupert are working cooperatively to investigate the opportunity for a new and enhanced Emergency Response and Training facility. 

Recognizing the City’s need for a new fire hall, as well as the requirement for various port operations to internally provide or contract specific emergency services that aren’t currently available locally, PRPA and the City believe there may be significant mutual benefit in a collaborative capital and operating venture. 

This conceptual design work is an early step in determining the feasibility of such a project." -- Katherine Voigt of the PRPA July 7

Though so far, there has been no public acknowledgement  of the proposal at all from anyone on City Council.

If such a venture were to move forward, it would seem like a pretty good example of a blue print that the City could build on towards future engagement on any number of other issues of shared interest.

Providing that the two sides can talk with each other.

The challenge of the Port Tax Cap is clearly something that needs to be addressed by the province and it is the BC NDP cabinet at the moment that needs to explain to the residents of the community as to how they are viewing the process and if it can't be changed, why it can't.

It's perhaps a job for MLA Jennifer Rice to take up on behalf of her constituents, delivering some invitations and setting up a public meeting for the community to hear both sides of the daunting issues.

Having a scenario where the city and its largest employer are seemingly going in two very different directions which delivers only rhetoric to exacerbate the situation, does not seem like a course of action where solutions will be found.

While Mr. Mirau has offered some guidance for future council members to take into the fall election campaign, there is also of note some responsibility ahead for a role of the voters in the community.

Notably how it is up to those that will bother to vote, to put in place a negotiating group in October for the City Council table

A collective that may be able to offer up some solutions perhaps not yet explored and find ways to take on the challenges this current council is leaving behind for them. 

You can review all of the talk on the Port Tax issue as part of our Budget notes from earlier this year.

A wider overview of Council themes is available from our archive page.

1 comment:

  1. Councillor Mirau says that the Port's $12 million revenue claim is "incorrect and misleading" because almost 2/3 comes from non-capped industry and the Port Competitiveness grant. The $1.8 million grant would be more appropriately added to the $3.7 million in taxes from capped industry, for a total of $5.5 million. There is no way that the Province would continue to pay the grant if the caps that justify it were removed. The Port also paid a $1 million grant in lieu of taxes in 2021.

    He claims that $750 million spent on Ridley and Watson Island construction "disproves that the Port Tax Cap is needed to incentivize investment". All that it proves is that those particular investments were viable without the tax caps. That does not prove or disprove anything about other existing or potential port-related investments.

    Investors consider taxes and tax incentives, and have to consider the City's stated preference for higher industrial tax revenue. As the article alludes to, there is a populist bent to the City's handling of the issue. That creates uncertainty under conditions where the caps are intended to encourage investment by minimizing uncertainty.

    Comments like the "Port Authority does not understand nor care" may play well to a political base in the community, but they are unlikely to be persuasive in a negotiation or to third party investors and prospects who monitor negotiations. As the article points out, BC Liberal and NDP governments have not been persuaded by the City's position or way of expressing it.

    I think that the City would be more effective if it focused on how the legislation setting the caps and the grant work, including issues like depreciation rates and the amount of the grant. There may be areas where revisions and updates can be justified while maintaining the competitiveness of the port. Issues about the City's spending priorities and wants are another matter entirely.