Nanaimo hoteliers raise red flags over VICC report

At Monday’s council meeting Nanaimo hoteliers contested the data in the VICC hotel feasibility study prepared by CBRE  Hotels.  The City of Nanaimo is using CBRE, an international hotel brokerage company, to sell 100 Gordon Street, the proposed site of a future conference centre hotel for VICC (Vancouver Island Conference Centre).

VICC is costing taxpayers approximately $2.5 million every year. It costs $1.5 million to run it and over $1 million to service its debt.

100 Gordon Street - potential site of conference centre hotel (adjacent to No. 1 mine shaft)
100 Gordon Street – potential site of conference centre hotel (adjacent to No. 1 mine shaft)

Should there be a conference centre hotel?

Most of the CBRE presentation was by telephone with accompanying slides. The presenter started off with a bit of background information about VICC including the fact that it is privately managed yet publicly owned.  VICC is considered a tier 3 conference centre as compared to the Vancouver conference center which is a tier 1.

Here is a collection of points made by CBRE:

  • Most comparable Tier 3 conference centres in Canada cost taxpayers around $800,000 per year. VICC costs over $1 million per year.

It is going to take more than an adjacent hotel to realize the potential of VICC – CBRE Hotels

“We need to fill the sales manager position at the conference centre which has been vacant for some time.”

“There is no planning or connection between Nanaimo tourism and the VICC…To realize any potential that has to be addressed…”

  • According to VICC figures, in 2015 there were 21 conventions and 2 trade shows held over 53 days.
  • Revenue generated in 2015 was $1.9 million with costs of $1.2 million to operate VICC.

“If these convention centres were money makers then the private sector would be building them…they are like loss leaders… the upside is it brings people to the city…they spend on average $141 per person…”

Currently there are three proposed hotels for Nanaimo:

  1. Insight Holdings Waterfront Hotel at 28 Front Street – 32 storey 303 rooms
  2. Howard Johnson Hotels Multiplex at 1 Terminal Avenue – 6 storey hotel 160 rooms
  3. VICC Hotel at 200 Gordon Street – 150 rooms

The VICC is hoping to have a conference hotel built by 2019.

Nanaimo Hoteliers protest numbers

Following the CBRE presentation, three hotel operators/owners lined up to speak. One of their major concerns was why can’t the VICC release its numbers so they can be checked out. According to industry practice, when there is a conference, the VICC is supposed to put out an RFP to all interested hotels so they can put out a proposal.

Hotelier #2:

…In 2015 we had 5 bids!…Most other hotels didn’t have any…We need to know the real numbers…We just can’t have this as a guessing game…No one has sat down and said we are going to lose a convention if we can’t get the rooms…You’re telling people our current hotels aren’t good enough yet you’re using our hotel stays in your report. It’s a bit of a slap! …How much of your business is local? How much did VICC take away from us? …I have the numbers if you want…You guys [want to undercut prices from other local hotels]

“I have been in the hotel business for 25 years…if these numbers of 14,000 hotel nights are right [I’ll eat my shirt]

Your convention centre is supposed to sell guest rooms NOT to take away business from local hoteliers. You’re not going to make money but…help the local enconomy…we have local hotels competing with the convention centre for meetings with 150 people and less…local meetings are not your business…

Delegate days are conferences that are multi-day events; not local one day meetings.

Feb 2016:  there were 7 city functions, 24 local functions. You counted those local functions as delegate days in your calculations [in order to prop up revenue numbers so they were greater than 2 million]

Please don’t make us have a fifth meeting on this…we want to work with you and VICC…Please don’t embarrass us by saying we don’t have enough good hotel rooms when most of your business is NOT conventions.. I can’t wait for the first person to ask me, ‘are those numbers accurate?’ [me: I don’t think so.]

Hotelier #3:

We have not received one RFP from the conference centre in years…and to tell business that conferences have been lost because of lack of available hotel rooms [is bullshit]. Our rooms are sitting empty; where are those delegates needing the rooms? Get us the truth behind these numbers.

…Show us some respect…We have made several attempts to make our concerns and this is our last attempt.

Councillor Pratt: …your hotel is a long way from here [VICC]

hotelier #3: 12 minutes

Pratt: Delegates are looking for something close to the conference centre…If there were more hotels on the level of the Coast Bastion then that would be better…

hotelier #2: …When was the last time you Councillors went to visit local hotels? They’ve done renovations [Buccaneer Inn, Best Western North Nanaimo, Inn on Long Lake…] Worried about transportation? Use your imagination…we have solutions..

hotelier #3: We haven’t had one RFP from VICC in years…several years ago we did a shuttle service to our hotel and it worked…

Pratt: I totally agree with you, if the numbers are wrong we shouldn’t be using this report…

Councillor Thorpe: …you don’t want another hotel?

hotelier #1: …We didn’t say that…we just want someone to look at the numbers. We don’t trust the numbers…

Thorpe: You don’t see a need for the conference centre hotel?

hotelier #1: …not based on those inflated numbers

Councillor Kipp: …What we spend is real…These projections are based on erroneous figures…a VICC hotel couldn’t make it. What are the barriers to collaboration between VICC, tourism and the hoteliers? I was under the impression we had spent $900,000 promoting the VICC…

Councillor Fuller: We’ve never reached more than 5% capacity for the VICC, that’s it.

Pratt: …if the 14,000 overnight stays aren’t accurate then…We need to find why the report is saying something grossly different.

hotelier #2: …more businesses are closing [so how can the delegate spends be accurate?]

hotelier #1: If the VICC shared their numbers with us… we could build a database…

Pratt: …there should be a motion – refer this study back to staff and see whether we should actively pursue a hotel for the VICC…

Fuller: …you have two groups saying two different things…we need a stronger motion…

CAO: …we’ll tell the CBRE consultant to simplify the report so the layperson can understand…

Thorpe: I’m a fan of a new hotel…get the report revised…

Councillor Hong: I could poke holes through this report all day long… We’re stuck with this place (VICC)…we’re losing money on it…break this report up… A projection of 1.7 million profit? This is nuts. Give them the facts not the fluff. I want to see something on 100 Gordon Street…if I’m going to build a $30 million hotel, I’m not going to listen to the crap in this report…

Fuller: …have this report revised to clarify data sources, with discussion from the Nanaimo Hotel Association and the CBRE consultant…

Kipp: …we spent $100,000 a month trying to market the Millennium Project and the people who were going to build a hotel there…we gave out condo sites and air space…I want verification with the industry. Nobody wants to work together… send the report back…I’m tiring of reports like this…

Mayor McKay: …This was a report to present to purchasers of 100 Gordon Street… I want to make sure we won’t be liable for misinformation. I can’t support Fuller’s motion… maybe all the delegates stayed at the Living Forest (campground)…

Fuller: makes another attempt at motion…scribble scribble

Councillor Brennan: [like I said before] clarify and verify!! [this report]…

Councillor Fuller withdrew his motion and Councillor Brennan made up a new one which basically meant to send it back to CBRE to get some verification on where they got their numbers. The motion was passed unanimously. (Councillors Yoachim and Bestwick were absent from the meeting).

Mayor McKay’s joke about the convention delegates staying at the Living Forest Campground raises a relevant point.

If there were in fact 12,000 overnight stays which weren’t in any of Nanaimo’s hotel rooms, then did they stay at Airbnbs? Or did the VICC submit those numbers just to entice a potential hotel builder?

Who would consider putting a hotel right next to a two mile hole which is the Number One mine shaft? Why is the City of Nanaimo not concerned about liability over this site?

City of Nanaimo Executive Staff expenses

At the Monday Council meeting this week there was some discussion during the E-town hall about staff wages, the plan to cut the number of prisoner guard positions, and the proposal to close Beban Pool for 3 months.

It is a big step forward for the City of Nanaimo to share the expense reports for the executive staff. Below is the City of Nanaimo Executive Staff expenses from January to June 30, 2016.

DirectorTotal ExpensesMealsTravel/ConferencesConferences attended
TOTAL$22,837.93$1,201.74
$18,333.33
Parks & Rec37.9332.165.770
Human Resources631.02162.08484.942
Community Development1,399.2033.76790.531
Fire Chief2,858.5838.172,316.561
Finance7,148.0431.345,069.832
CAO10,763.16384.409,665.704

The expenses for the Director of Parks and Recreation are impressively low. Could other executives try harder to tighten their belts?

At the council meeting it was mentioned that money could be saved by eliminating banking sick days. According to the News Bulletin former Nanaimo CAO Al Kenning was still on the City’s payroll in 2015 with $155,521 paid out for banked sick and  vacation time.

Nanaimo Blogger quits; E-town Hall; Core Services Review

There will be a council meeting at 7pm on Monday, September 12th. Here are some of the topics on the agenda:

E-Town Hall

The public will have an opportunity to comment on the Core Review. What do you think? Any ideas for the conference centre? Any suggestions on the proposed Beban Park pool closure? 479 people have signed a petition and submitted it to City Hall asking that Beban Pool not to be closed for 3 months in 2017. You can give your thoughts by calling 250-754-4521 on Monday evening.

Grants

The grants committee has recommended six groups be given tax exemptions (Boys and Girls club; Recycling Exchange; Bethlehem Centre; NRGH Auxiliary; Disability Centre) and three refused (Enchanted Woodland Society; Community Futures; Malaspina Theatre).

What’s building?

244 Selby Street
A 26-unit multi-family rental building with requests to reduce parking from 13 to 9 spaces and reduce front and side setbacks.

1847 Dufferin Crescent
Add 5 units to the second storey and request a reduction in parking spaces from 52 to 48.

4535 Uplands Drive
A two storey commercial building with 8 units on the second floor with reduced parking from 40 to 35 and only one loading space instead of two.

982 Douglas Avenue
One lot will be divided into eight small lots.

615 – 699 Harewood Road
Single family residential to an 11-unit row housing.

New motion

Councillor Kipp will put forward a motion to have town hall sessions regularly.

Financial Numbers at Nanaimo City Hall

Revenues for City of Nanaimo for 2016:
Property taxes: $96,793,560
Parcel taxes: $234,042
Fees & Charges: $38,290,552
Other sources $32,885,806

Expenses for City of Nanaimo for 2016:
Operating: $118,561,132
Sewer: $4,630,586
Water: $$9,269,577
Interest payments: $2,575,375
Amortization: $23,174,277

Goodbye to Nanaimo blogger

Jim Taylor announced this week he is hanging up his hat and will no longer be reporting on local council news. His blog, Nanaimo Info Blog, will be up for a while for any of those who would like reference material. Who will pick up where Jim has left off? Ron Bolin seems to have retired from Nanaimo City Hall blog. There is another blogger who has started up in town, Dominic Jones, at News Nanaimo. Maybe Dominic is Jim’s replacement? Politics is a dangerous business. Especially so in a government town and when the City has a budget of $200 million.

1970 Student Loans Made Easy

Many students heading back to school rely on student loans. In 1970 student loans for post secondary education were easy to get.  Below is the student loan application form for the school year 69-70. There were 19 sections to the form which included:

  1. name/address/date of birth/SIN/marital status
  2. how many credits
  3. completed grade 12
  4. do you intend to live in Canada after graduation
  5. when do you expect to start permanent employment
  6. list of previous employment

During the summer of 1969 the student on this application made $524 from May to September working full-time at Woodwards Department store in Victoria. Tuition for a full-time student was around a five hundred dollars per year.

It looks like the tuition now is $7,000 plus all the other costs of living these days. Average tuition fees increased from $1,464 in 1990-91 to $6,348 in 2012-13.

1970 student loan application from UVIC
1970 student loan application from University of Victoria

The University of Victoria was established in 1963 and moved to the Gordon Head campus. The British Columbia Institute of Technology (BCIT) opened in 1964. Simon Fraser University opened in 1965.

Defamation drama at Nanaimo Council

At Monday’s Council meeting, the Financial Officer presented a report detailing Nanaimo City Council’s spending for the first six months of 2016.  (The elephant in the room – defamation – got exposed.)

This year, not only did Council vote themselves a raise but they voted to increase their expense budget from $75,000 to $118,000.

According to the CFO, the Acting Mayor approves Mayor and Council expenditures, and in in turn the Mayor approves the Acting Mayor’s expenses. They were told that they can reallocate their expenses between accounts, except legal fees.

Council talks legal expenses:

Bestwick: …why are other agencies not filling out this expense form?…Who checks their expenses? If we fill these forms out in seven days why don’t they?

Brennan: …each councillor received a budget of $13,500 for their expenses but my budget was only $8,500. I didn’t understand that so I contacted staff…I was told that there was $5,000 allocated to each councillor and I was told that I was not entitled to that. The reason I was given was that there was a council motion that attributed $5,000 to each councillor but that motion did not include ME!

So (big frown) …I have not challenged that… I was fighting a losing battle on it…the other council members were awarded an extra $5,000 for legal fees…

Mayor: …careful what you say…

Brennan: …That’s why I didn’t get the extra $5,000 as it was for legal fees…

Yoachim: …when you get boxed in you have to defend yourself…before hiring the current CAO there was no process of hiring…we can get the real story…so it’s not that we five councillors tried to gang up on Councillor Brennan…I hope the story can come out…when legally possible…to say people got extra money…and why I had to get a lawyer to defend myself…

Mayor: …stick to it [expense questions]…

Fuller: …for any other legal challenges against the City do we pay the person making the challenge? Do we do that with any other legal challenge? Is it a practice to pay ahead?…

CAO:…the general practice is for the CAO to provide corporate advice and to retain a legal firm…we have 5 to 8 legal firms on contract at any time…we have a whole list of lawyers available…when council needs legal advice the CAO makes lawyers available…The practice should be to go through the CAO and they [council] will get legal advice for those that need it…an allegation of leaked information from a meeting was made…the minutes for these in-camera meetings have been released now…the legal advice was that there was a breach of confidentiality…

Councillor Brennan requested advice for legal help because she was asked to make an apology…and she requested legal help to do so…and she did…but she requested more informaton from the lawyer…she has been informed that she can apply for the legal money if she wants to…Councillor Brenan has been given that advice verbally and in writing….and it is up to Brennan…also Brennan has made several requests to have this reversed but that is not up to myself or the CFO to make…that’s up to council to reimburse Brennan or not…Brennan would have to make that request to council…the lawyers represent the corporation…some councillors would be better served by having [their own lawyer]….Councillors had to [get legal help]…Mayor McKay retained his own lawyer as well…we are going into 8 months of this [legal mess]…the retention of lawyers is a process that we will have look at…Brennan and Mckay have had their own lawyers…and councillors had to get their legal advice…it is up to council when they want to depart from using corporate lawyers and use their own…

Mayor: …this is the first time we have been told about the ability to [shift the money between accounts]…I appreciate that…we had an all day meeting and were charged $22.66 each [for May 27, 2016 lunch]…we get free food here tonight at the council meeting so why the charge for the once a year lunch meeting?…

Bestwick: …we get inquiries about transparency, about spending money…here we are..airing our laundry…$22.66 for lunch? …it’s not a big deal…if we want to change the policy we put a notice of motion and give everyone two weeks’ notice…get some work done..be careful what you ask for!…it shouldn’t warrant this time…we are wasting your time and our time…

(Clapping from the gallery)

Pratt: …what we are doing is really important…there is real controversy… I have taken advantage of the learning opportunities…I don’t need to be ashamed of anything…I have an issue with the telephone bill. Everyone is at $800 or $900 and we are halfway through the year and we are allocated $1,000 each? That needs some adjustment…

Hong: …this is great…we have a budget…there wasn’t one before…we got paid already for the whole year for the internet so that’s not going to change…that’s how it ususally works…

Should the City pay legal fees for defamation by Councillors?

Councillors opted to increase their legal budget from $15,000 to $60,000 this year. Between January and March 2016, the City of Nanaimo spent approximately $130,000 on legal costs. Did that amount include an out of court settlement for Mayor McKay?

According to the Nanaimo News Bulletin, a letter was sent to the City naming five councillors. Councillor Fuller explained, “If it went to judicial review then those monies were there for us to possibly deal with defamation.”

Should taxpayers be paying for a councillor’s loose lips? In the case of the Mayor of Calgary’s defamation case (he called a builder a ‘mob boss’) he is paying for his legal costs. Calgary Councillor Chu also was sued for defamation and he is paying his own legal fees.

 Legal Fees (Jan - June 30, 2016)Law Firm
TOTAL14,585.40
Fuller
3,593.34
Cook Roberts, LLP
Bestwick
3,593.33
Cook Roberts, LLP
Hong
3,593.33Cook Roberts, LLP
Yoachim
3,593.33Cook Roberts, LLP
Kipp212.07
Cook Roberts, LLP
McKay
0
Brennan0
Pratt0
Thorpe0

4 Questions on expense reporting

  1. Why is the Mayor and council approving their own expenses?
  2. Why are expenses allowed to be shuffled between accounts?
  3. Why are the internet and call display costs so high?
  4. Why are the expenses for many items the same amount for each member of council?

The chart below shows that for 6 council members most of the expenses were for legal fees or internet/call display.

Comparing 2015 and 2016 expenses

Councillor2015 2016 (Jan - Jun 30, 2016)Biggest Expense of 2016
TOTALS65,607.0342,950.64
Kipp2,123.761,051.49
54% on call display/internet
Thorpe2,038.221,729.7942% on call display/internet
Fuller1,008.684,706.9676% on legal costs
Yoachim6,851.87
4,831.6674% on legal costs
Bestwick3,039.474,844.8174% on legal costs
Brennan7,116.685,072.5980% on conferences
McKay28,302.376,025.7873% on conferences
Hong7,759.076,088.6959% on legal costs
Pratt7,366.916,582.8782% on conferences

Nanaimo Councillors spend on conferences, call display

The City of Nanaimo released the expense report for Mayor and Council for the first six months of 2016. So far, Nanaimo Council expenses total $41,243.07 with half of that spent on attending conferences:

 Annual BudgetTotal Expenses (Jan - June)ConferencesConferences Attended
TOTAL$118,000$41,243.07 $ 21,024.50
Yoachim13,500 4,831.66200.911
Bestwick13,5004,844.81241.301
Kipp
13,500
1,051.49253.411
Fuller13,500 4,706.96253.411
Thorpe13,500 2,038.221,093.702
McKay15,0006,025.784,428.52 3
Brennan8,5005,072.594,045.71
4
Hong13,5006,088.695,092.87 3
Pratt13,5006,582.875,414.67 7

Councillors who attend conferences are not required to present to Council a report on what they learned. Why is Brennan’s budget $5,000 less than the other councillors?

In April, Mayor and Councillors voted themselves a raise.

Internet Usage

Why doesn’t the City give a fixed reimbursement for internet usage per month?  If the City needs to send councillors documents, either provide a DropBox account which can be set up for free or get them to download the information to their computers.  Therefore, there is no need for a councillor to be connected to the internet to read a report.

Call Display

It looks like a lot of councillors want to know who’s calling before they pick up the phone. A regular council-watcher? Let it ring. Is someone pestering Councillor Bestwick? His reimbursement for call display was twice the amount as everyone else. Council has been reimbursed almost $7,600 for six months of call display and internet charges.

Why is the City even compensating for call display in the first place? Most phone companies provide call display free as part of a phone package. For mobile phones there are several caller ID apps that are free including Hiya, Truecaller, Holla and Extreme Call Blocker.

Councillor Fuller gets five stars for not claiming this expense!

 InternetCall Display
Total
TOTAL$6,534.87
$1,059.28
$7,594.15
Kipp 448.71
114.64
563.35
Fuller
770.40
-
770.40
McKay 667.68
114.64
782.32
Brennan
744.72
114.64
859.36
Thorpe744.72
114.64
859.36
Hong757.56
114.64
872.20
Bestwick 680.52
256.80

937.32
Pratt 860.28
114.64
974.92
Yoachim 860.28
114.64
974.92

City Management and Consultants

When can we look forward to seeing a similar expense report for the management at the City?  Also, the BIG question is how much has been spent to date on consultants during this Council’s term?