A few days ago, Mary Polak’s Ministry of Transportation and Infrastructure announced the “B.C. coastal ferries consultation and engagement process”.
The ministry invited:
Input on considerations to achieve $26 million in savings to 2016 and input on establishing a long-term vision for coastal ferry services in British Columbia that will keep our ferries affordable, efficient and sustainable.
Anyone else wondering if the current roster of flacks and politicos earn by-the-word bonuses?
Of course, had Ms. Polak and friends been regular readers of In-Sights, this consultation would be entirely unnecessary. They would have captured 94% of the needed sum by reversing the $24.2 million second mortgage BC Ferries gave a Jawl Family corporation when Messrs. Hahn and Corrigan decided ferry executives needed a larger playpen for their shrinking company.
A year ago, Luxurious new offices and enduring gratitude was posted at In-Sights:
In 2008, the company announced plans to move into 90,000 square feet of a building at 800 Yates Street then under construction by Jawl Properties. B.C. Ferries sold its long time head office building, 53,000 sq.ft. at 1112 Fort Street, to the Jawls for $11 million. By sheer good fortune, the new owners quickly found another tenant: Elections BC.
According to Note 12 on the BCF 2011 Audited Financials, the lease of new offices in downtown Victoria is for fifteen years, with four renewal options of five years each. The lease agreement includes payment of building operating costs and property taxes but other terms are undisclosed.
In addition to signing a long term lease before completion, BC Ferries lent the Jawls, developers of the $100 million property, $24.2 for fifteen years, secured by a second mortgage of the property.
What does BC Ferries get out of this? Certainly, it gets substantially more luxurious executive offices, almost twice the size of those in the old building. They also earn enduring gratitude of the influential Jawl family, people who style themselves as the largest private owners of premium offices and industrial space in the capital. Their properties include Cordova Bay Golf Course, Mattick’s Farm, Sayward Hill and Selkirk Waterfront. They are, of course, substantial contributors to the BC Liberal Party.
There is another, perhaps easier way, to find the funds Mary Polak says she needs from BC Ferries. That is to reverse the private company fiction that results in interest rates far higher than the cost of financing that BC taxpayers should be paying.
The long term debt of BCF at March 31, 2012 was $1.3 billion and the average interest rate on this debt was 5.56%. The Municipal Finance Authority 10 year rate in June 2012 was estimated at 3.11% The interest rate difference would be about $32 million a year, which is $127.4 million between now and 2016, five times Mary’s goal.
Ferry users and taxpayers are expected to pay for the mistakes of an incompetent board of directors drawn mostly from Liberal Party lists. The current consultation is mere window dressing, lipstick on the pigs that have dined at the public trough.
I suggest you read Thumb in the eye of BC taxpayers. It gives the real story of executive compensation at BC Ferries.
Don’t expect to read this version of reality in the mainstream media.
Categories: BC Ferries