When news
broke of City Council’s decision to award the IceCaps a subsidy of $700,000
over two years, in a private meeting no less, I waited for the key words which
might help explain what gave rise to the decision.
Councillor Galgay
supported the measure, spoke at length, but said little. Next day, as social
media went viral, in a local context, Councillor Art Puddester acknowledged he
was the one who leaked the information and that he had voted in favour. He explained why he had broken the protocol of ‘private’ Council Meetings but did not address the merits of Danny Williams’ demand.
Finally,
Deputy Mayor Ron Ellsworth, noting the need to respond to widespread public rebuke, acknowledged he had voted against the subsidy and stated:
I just felt we never had enough
financial information from the IceCaps, with regards to looking at their
financial statements…looking at what the impact of the million and half dollars
would have on them and their bottom line. Those are the things I would like to
have at the table to make a decision.
Ron Ellsworth confirmed what I had suspected. The IceCaps did not open its
books to Council in order to justify an award of $700,000!
A businessperson, like Ellsworth, understands the importance of reviewing the IceCaps’ financial statements; he would know Council has an obligation to do its homework and confirm the generous ’subsidy’ is
justified. Puddester and other Councillors ought to grasp that requirement, too.
The City of St. John’s, or any other City, does not go around
doling out hundreds of thousands of dollars to companies without the assurance
the donations meet some basic criteria. Were City policies adhered to? Would
the Company experience financial jeopardy in the absence of receiving the
benefit? Is the public interest served thereby?
Williams’ “no-brainer” rationale wouldn’t impress a Bank, to
which money must be repaid; neither should it pass muster as a “free-bee” on
the taxpayers’ dime.
The Ice Caps want to extend its lease with Mile One. That request, alone, should afford either
Mile One or the City the right, as a condition of such renewal, to check if the
Company’s financial circumstances have changed, as they may have. Such an
inquiry does not speak to leniency or the question of whether public largesse
is warranted. It is intended only to
permit the Ice Caps’ Landlord to confirm the Company’s higher costs have not
jeopardized the Company’s viability. It
is to confirm that the Company is capable of extending its tenancy and is not
likely to breach its covenants to Mile One. That is a quite normal business
practice.
IceCaps’ management announced confirmation, weeks ago, of an
additional season for the Team. Team
owner, Danny Williams, did not say that the decision was conditional; there was
no suggestion or warning that if taxpayers failed to offer him $700,000 there
would be no games, this year or next.
This last point needs further discussion. I will make four points:
First, on any rational level, City Council ought to have
assumed that that an agreement had been entered into by the IceCaps and its
franchisor, in the ordinary course of business.
Why would it draw any conclusion other than that Williams needs Mile One
as much as Mile One wants the IceCaps’ continued tenancy?
Second, in awarding the subsidy without scrutinizing the
IceCaps’ accounts, Council has awarded monies to a Company it knows not whether
it earns $5 or $5,000,000. It does not
know whether Williams’ return on investment in the IceCaps is 1% or 50%. It
does not know if it is giving public money to a wealthy Company or to one whose
continued viability rests on the receipt of free money. It simply does not
know.
Councillors will naturally want to do their best, if the
price is not excessive, to ensure bums are in the seats at Mile One. If there is any public interest, that is it. In this case, it did not demand reasonable
proof, from the IceCaps, as to why users should not pay an extra $1.50 per game;
the kind of decision that preoccupies private businesses constantly. The IceCaps is not a charitable organization.
Council receives no upside if the Team makes more money. Why should the City
bear the downside if the organization makes less?
Third, the IceCaps have confirmed play at Mile One this
Season. It is old news. The
tickets are already on sale. In short,
this is not so much a subsidy to the IceCaps as it is a $700,000 gift!
Fourth, Council quite rightly has the authority to review the
rent structure charged promoters, like Danny Williams. It may even conclude the
Facility must be more cost competitive. But given the Ice Caps public acknowledgement of
the one season extension, Council’s new rental subsidy ought to
have applied to the period beyond that commitment. Mr. Williams and any other promoter would then
have known, well in advance and on a fair and equal basis, the rules of the
game.
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For an alternative view, David Lane, Councillor-at-Large has posted on his Blog:
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For all these reasons, on any public policy level, this
decision stinks. That the vote was conducted in secret just strengthens the
smell.
Mr. Ellsworth, having made the right
decision, should now work to ensure it is not approved when the Budget comes to
a vote. Otherwise, the decision threatens any notion of transparent public
policy at City Hall; it confirms that for a majority on this Council, public
money is up for grabs if the applicant has the right political connections. It taints Council for
the rest of the Term.
If older politicians like Dennis O’Keefe and Art Puddester, or younger ones
like Danny Breen, Jonathan Galgay and David Lane are cowed by the attraction of
political influence and are incapable of making a small city’s institutional
framework stronger, what chance is there for us to shed a large and well-funded
outfit like Nalcor of its secrecy and its distain for public accountability?
Danny Williams may not give a hoot about such notions as long
as his corporate interests are served; for him all of this may be a “no
brainer”.
As for the general public, how can they not see the decision is
worse than unwise; it is just plain dumb.