Letter to City Council regarding federal centennial funding for April 10, 2006, meeting

April 3, 2006




His Worship the Mayor
And Members of City Council
City Hall
Saskatoon, SK S7K 0J5


Dear Mayor Atchison and Members of Council:

Re: Federal Centennial Funding

As a follow-up to the March 24, 2006, federal centennial funding announcement by Western Economic Diversification Canada (WD) I would like to submit the attached documents to City Council as information, which were obtained through Access to Information (ATI) requests.

When he announced the Request for Proposals (RFP) on November 7, 2005, former federal finance minister Ralph Goodale said, “The government of Canada has concluded, as a matter of fairness, that it is necessary to identify all potential centennial projects in Saskatoon through an open and transparent and totally fair call for proposals to invite all projects to come forward for consideration.’

With respect to openness and transparency it was discouraging to read in the March 31, 2006, SP that federal officials were unable, or unwilling, to provide the Mendel Art Gallery with a definitive answer why its proposal did not receive centennial funding. No doubt other applicants are asking the same question.

The RFP was open for 30 days. This is considerably shorter than what WD documents had earlier proposed that it “would have to be at least 60 days and possibly 90 days to allow a reasonable time for applicants to prepare a proposal.” Why the time period was shortened has never been explained.

In general, I do not feel the process has been fair or transparent. It seems that River Landing related projects were given preference.

The City of Saskatoon, in its April 14, 2005 letter to WD, identified the “River Landing Destination Complex” as the project it favoured for the centennial project for Saskatoon. The City denied my request for a copy of the letter through the ATI process. In fact, the City, Province and Federal Government have denied access to hundreds of pages of River Landing documents over the past two years.

In the May 4, 2005, StarPhoenix article Ottawa favours cultural center it was reported that the Federal Government was pressuring the City to target the centennial money on the River Landing cultural block. WD officials in Saskatoon were quoted as saying “We believe that's the best candidate,” and that “The cultural centre is our No. 1 choice.”

The matter of Federal Government involvement on the Gathercole site has not been adequately addressed.

Consider the following:

Page one of the City’s April 13, 2004 Canada Strategic Infrastructure Fund program submission requesting federal funding for the A.L Cole site states: ‘In conjunction with this project, the City will be developing the adjacent land, called the Gathercole site, entirely at the City’s expense.’

In his April 14, 2004 cover letter to the federal government Mayor Don Atchison said: ‘In conjunction with this project, the City will be developing the adjacent land, called the Gathercole site, at our own expense.’

A September 20, 2004 report by the City Manager concerning federal infrastructure funding states: “This grant is to be provided to projects that would not be undertaken without Federal funding. Federal officials had indicated they believed that City Council was going to undertake the redevelopment of the Gathercole site, with or without this funding. Therefore, as the City was going to proceed with the project without Federal funding, the project was not eligible for an incremental grant.”

The Infrastructure Canada document ‘Meeting with Mayor Don Atchison and Mr. Phil Richards – City of Saskatoon – October 5, 2004’ states: ‘The city also plans to develop the adjacent land called the Gathercole site. The city will cover the entire financing costs of this portion.’

The November 1, 2004 memorandum signed by The Honourable John Godfrey states: ‘Further to this project, the City plans to develop, and finance, the adjacent land called the Gathercole site.’

On December 10, 2004 a ribbon joining ceremony was held at the Saskatoon Farmers’ Market. In attendance were the Government of Canada, Government of Saskatchewan and the City of Saskatoon. The main participants were The Honourable Lorne Calvert, Premier of Saskatchewan, The Honourable Ralph Goodale, Minister of Finance, Mr. Donald Atchison, Mayor of Saskatoon and Mr. David James, Director General, Western Economic Diversification Canada. Through an ATI request the Federal Government provided me with a document from that event called ‘Questions and Answers – Government of Canada’s contribution to the A.L. Cole Site restoration project.’

Question six states: ‘Will the federal government play a role in the development or funding of the Gathercole project adjacent to this site?’

The answer: ‘No, the Gathercole site development project will be funded entirely by the City of Saskatoon. The federal government is not a funding partner in the Gathercole project.’

I feel there is no ambiguity in these statements. The message is consistent and very straightforward, that the development of the Gathercole Site would be funded entirely by the City of Saskatoon. In fact, the Federal Government, in its Q & A document went so far as to emphasize that point by underlining the words ‘funded entirely’.

I believe all levels of government were aware of this to some degree given that all participated in meetings and teleconference calls regarding the South Downtown. These include:

September 7, 2004 – Teleconference call between Western Economic Diversification Canada, Infrastructure Canada and the Government of Saskatchewan.

October 4, 2004 – Teleconference call between Infrastructure Canada, Western Economic Diversification Canada and the Province of Saskatchewan.

October 5, 2004 – Infrastructure Canada meeting with Mayor Don Atchison and City Manager Phil Richards to discuss the South Downtown project, including the Gathercole site.

October 18, 2004 – Meeting between Infrastructure Canada, Western Economic Diversification Canada, Government of Saskatchewan (Government Relations and Aboriginal Affairs) and the City of Saskatoon.

The Canada Celebrates Saskatchewan initiative was announced on December 20, 2004, a mere ten days after the ribbon joining ceremony in Saskatoon. The initiative included selected strategic capital investments in Regina and Saskatoon and received Treasury Board approval on December 13, 2004.

As a result of participating in various meetings and teleconference calls it seems reasonable to assume that WD was aware of the understanding that Saskatoon would be responsible for entirely funding the development of the Gathercole site.

However, by early January 2005, the Gathercole portion of the River Landing development was being touted as a possible candidate for the $10M centennial funding.

Throughout the spring and summer, as evidenced in the attached documents, the Federal Government worked “with all relevant parties to attempt to broker an agreement acceptable to all,” and that the “expectation has been that a cultural centre planned for the South Downtown area of Saskatoon would emerge as the preferred option for the project in Saskatoon.”

On September 19, 2005, City Council approved a conditional $1M grant to Persephone Theatre and directed its administration “to officially ask the Federal Government for capital assistance through the Centenary Funding Program,” and to “pursue additional capital funding from the Government of Saskatchewan and other private sector sources.” This is not consistent with past civic and federal documents stating that the development of the Gathercole site would be entirely funded by the City of Saskatoon. On September 16, 2005, the StarPhoenix reported city manager Phil Richards as saying that should federal and provincial funding fall through the deal could collapse.

It should be noted that the Provincial ($5M) and Federal ($13M) governments are major funding partners on the adjacent A.L. Cole site (River Landing Phase II). In an October 7, 2004, letter to Infrastructure Canada city manager Phil Richards wrote, “In terms of success, I believe that unless the Gathercole development is successful, development on the A.L. Cole site would be impaired.” It appears that senior levels of government were compelled to contribute in a significant way towards the Gathercole development otherwise their sizeable investment on A.L. Cole might be jeopardized.

On September 30, 2005, the Mendel board heard, for the first time, the City’s interest in relocating the gallery to River Landing. Meanwhile, an October 4, 2005, e-mail from Meewasin CEO Susan Lamb to WD, reveals that the Authority had been approached about moving into the Mendel’s current building. The proposal quickly divided the public and the media. The Mendel family was wary and threatened to pull funding. Some speculated about the City’s agenda since the Mendel was well into the initial phase of its expansion and the City had just recently awarded a $978,457 contract to develop its design plans. Finally, on October 21, 2005, the Mendel announced that its board – in a unanimous decision –rejected the idea of moving to River Landing.

WD briefing notes from this time period seem to suggest there was federal support for the latest proposal that involved the Mendel and Meewasin swapping locations. It leaves one to wonder whether the ensuing controversy may have contributed to the decision not to provide the Mendel, and perhaps even Meewasin who it seems was gradually being squeezed out of consideration for a spot in River Landing, from receiving any centennial funding.

On October 17, 2005, WD convened a meeting of River Landing stakeholders “to identify and resolve key issues,” and to see whether “existing proposals can be made to work.” Among those invited were Meewasin, Mendel Art Gallery, Tourism Saskatoon, Wanuskewin and Persephone Theatre. (It is interesting to note that the October 12, 2005, briefing note identifies Persephone Theatre and Mendel Art Gallery as “key tenants” while the MVA seems to have been relegated to “other interested stakeholder” status.)

During a meeting held on October 20, 2005, the document “Not Quite Plan B - Options for Centennial Funding” was apparently circulated for discussion. The purpose of the meeting and who participated are not revealed. Four options – confined solely to River Landing – are outlined. The Riverfront Park is referred to as “popular and non-controversial” while providing resources to Meewasin and Persephone “still would be contributing to River Landing in a significant way.” None of the other stakeholders from the October 17 meeting are mentioned.

At its November 28, 2005, meeting City Council considered a River Landing Destination Complex assessment report by Vancouver consultant David Russell. It was recommended that the Meewasin/Tourism Saskatoon component be postponed while Persephone Theatre and adjacent spa hotel project continue as planned – which seemed to be precisely what the City wanted to hear.

In his report Russell wrote, “From the City’s perspective, the call for expressions of interest anticipates that the City would ultimately enter into a contractual agreement for operations with the selected proponent. The expectation was that proponents would offer concepts consistent with the City’s objective for the facility to serve as a destination centre, and operate on, or close to, a self-financing basis.”

The seven-page Expressions of Interest document that the City released on April 22, 2005, however, does not mention contracts nor does it express the expectation that the concept must operate on, or close to, a self-financing basis. Non-profit organizations, like Meewasin, were encouraged to apply.

With respect to the MVA, Russell said, “At the present time, the interpretive facility Meewasin operates does not include provision for admissions and is undertaken as a “public service” to increase awareness of the importance of the river and its role in the Saskatoon area.”

This seems to imply that “free” is bad, and that Meewasin may want to reconsider the policy in order to satisfy the City’s requirement that the project be self-financing. Meewasin, it should be noted, receives its operating funds from the City, Province and University of Saskatchewan.

At a special meeting on December 7, 2005, City Council resolved that WD be advised that Persephone Theatre and River Landing Phase I Riverfront be among the city’s four priorities for federal centennial funding. Meewasin did not make the list. At the same meeting City Council approved the Memorandum of Sale and Agreement with Persephone Theatre solidifying Saskatoon’s commitment to the project.

On February 13, 2006, Saskatoon City Council approved the signing of the following agreement: Canada Strategic Infrastructure Fund Agreement for Saskatoon South Downtown ("River Landing Phase II") 2005-2006/2009-2010.

The last paragraph of Section 2.2 – Description of Project states: “Saskatoon also plans to develop the adjacent land called River Landing Phase I. Canada will not be providing any funding through this Agreement for remediation or development of River Landing Phase I.”

This statement does not accurately reflect what was written in earlier federal and municipal documents – that the development of the Gathercole Site (River Landing Phase I) would be funded entirely by the City of Saskatoon.

All reference to the City being responsible for fully funding the development of the Gathercole site was removed from the final agreement. To date no explanation for this reversal has been given.

On March 24, 2006, WD announced that Persephone Theatre, Saskatoon Prairieland Park, Wanuskewin Heritage Park, and the City of Saskatoon’s River Landing Riverfront Park Phase I would share in the federal centennial funding. A total of $5.5M would be dedicated to River Landing related projects. That same day the Province of Saskatchewan conveniently announced it too would contribute $2.5M to the Persephone Theatre project, which was dependent upon receiving both Federal and Provincial dollars. It seems WD simply used a variation of the options outlined in the “Not Quite Plan B” document that was discussed at the October 20, 2005, meeting – eighteen days prior to the RFP announcement.

In the absence of full disclosure from the three levels of government it is difficult to know for certain what took place and why. The public is left to try and piece the story together itself.

Thank you for your time.

Sincerely,




Joe Kuchta
Saskatoon, SK


/Attachments
1. October 25, 2005 Briefing Note for Information
2. October 20, 2005 Not Quite Plan B: Options for Centennial Funding (For Discussion Only)
3. October 13, 2005 letter to Sheila Gamble and Terry Graff
4. October 12, 2005 letter and agenda to various stakeholder representatives
5. October 12, 2005 Briefing Note
6. September 13, 2005 Briefing Note for the Honourable Stephen Owen
7. August 22, 2005 Briefing Note for the Assistant Deputy Minister
8. July 19, 2005 Briefing Note for the Deputy Minister