District of Sooke missing $664,000 in DCCs from hotel

"Arrangements" were made without going before Sooke council

Sooke Mayor Wendal Milne

Three councillors who sat on the last District of Sooke council are stating they knew nothing about a deal that saw the Prestige Oceanfront Hotel and Resort pay no Development Cost Charges to the district.

The DCCs, to the tune of $664,000, include $608,000 to be paid to the District of Sooke and $56,000 to be paid to the Capital Regional District. The DCCs were to be used for road and sewer infrastructure in the district.

The district, said Coun. Rick Kasper, scratched a cheque to the CRD for $56,000 in 2010, the hotel’s portion of the CRD DCCs. The remainder of the DCCs were “offset” by being put into the DCC account by the district when it should have been paid by the hotel. The money apparently came from the yearly fees to be paid to the hotel for use of the convention centre.

The shuffling of money began in 2009 when the hotel was to pay the first one-third of the DCCs at the building permit stage, which was October of 2009. A year later on the aniversary the other one-third never arrived and neither did it in 2011. Add approx. six per cent interest to the mix and the figure comes closer to $700,000.

Nothing showed up in the audits of 2009 and 2010 said Mayor Wendal Milne.

“You can’t trace it if there is nothing to trace,” he said.

Provincial regulation states that arrangements can be made through a surety, letter of credit, bond or land. None of these were ever done. The regulation also states that the interest must be paid. No interest has been paid by Prestige.

The district entered into a partnering agreement with Prestige where the district would pay $1.5 million towards the building of a convention centre. The district was obligated to pay the hotel $300,000 per year for use of the facility for 12 days per month. The district also purchased a lot next to the hotel for close to $1 million on which to build a public boat launch. This included building  a roadway which is used by both the hotel and the public. Negotiations were carried out by former Mayor Janet Evans and CAO Evan Parliament.

The new council formed a Finance and Administration Committee and they have gone through the budget line by line. They are also reviewing contracts.

“All through the budget deliberations none of the figures added up,” said Councillor Rick Kasper, chair of the Finance and Administration Committee. “There was no disclosure. The auditors were just as surprised as we were. There are statutory requirements and three of the current councillors knew nothing of it.”

“I’m flabbergasted, but I’m not surprised,” said Coun. Herb Haldane who sat on the last council. “This never went through the public process, it was never transparent, never open. They can’t fall back on the claim that they didn’t understand.”

Councillors Maja Tait and Bev Berger echoed Haldane’s surprise.

Local resident Gail Hall asked whether the district at any time sought legal counsel on this contra-arrangement.

“We’ve been lied to,” she said.

Documents in the partnering agreement do make reference to DCCs but Mayor Milne is referring the matter to the district’s lawyers.

“We’ve handed this to our lawyers,”  said Milne. “What is the remedy? Our first obligation is to make sure the district is covered.”