Preliminary 2014-2023 Project Plan

1. Preliminary 2014-2023 Project Plan • Source of Funding Enquires: • The plan suggest that all interest income from the City’s long term investment monies have been included in the funding model at an annualized rate of return forecast at 4%. Question: • Am I correct that all interest income over the next 10 years has been included in this funding model ? • What is the current rate of interest realized by the City on its existing investment funds (i.e.: 2013 ROI) ? • What assumptions have been made to determine the future years investment earning potential from City reserve funds ? • Has a bad debt allowance been taken for LEC ?

2. Ten year Spending Summary • The plan projects total spending of $208.9m over the period 2014 – 2023, and $94.8m of that $208.9 million will be spent in 2014 alone. • The plan admits that there is a funding shortfall of $18.8m over 10 years. The plan is unclear in what year the funding shortfall will arise. Analysis $208.9m – $18.8m = $190.1m / 2 = $95.05m • Council is basically committing to spend or allocate 49.87% of all monies available over the next 10 years, to year 1 of this 10 year plan.

3. To commit 50% of the next 10 years income to year 1, is in my opinion foolish. • Council’s course essentially leaves each future council with little or no spending flexibility beyond essentials, because to alter course at a later date will potentially result in thrown-away value for investments planned and made by this council in the 2014 period. • The City will be required to survive on the remaining 50% of known and available income potential for the next 9 years, through at least three separate council terms.

4. LEC 2014 Capital Plan Questions • How much of the $12.0 m earmarked for 2014 has already been spent in 2013 fiscal period without staff actually coming before Council for spending authority ? • My understanding is that the City is performing work on behalf of LEC, issuing invoices to LEC for this work, and LEC is unable to pay these invoices. Is this correct ? • My understanding is that the City is contemplating turning these non-performing LEC receivables into long term debt obligations or loans. Is this correct ?

5. I am told that the City is considering the potential of converting LEC’s debt into a share acquisition, which would essentially turn the non-performing long term loans and non-performing short term receivables into a non-interest baring investment in LEC shares. Is this Correct ? • Opinion: With all due respect, this idea is folly. When you already own 100% of a thing, and then dilute the share pool so you can buy more, your aim must be to camouflage the fact the loans and short term receivables to LEC are non-performing, and your real objective is to relieve the debtor of an obligation to pay interest on the monies borrowed.

6. Opinion (Cont) • When you have a problem creditor, which entity is unable to pay its obligations, you do not cure the problem by giving the creditor more money ! • You limit or curtail credit, and you develop and implement a strategy to reduce exposure and recover your investment ! WHAT ARE YOU THINKING • Question: Have you consulted with or engaged an arms length third party to help you review the debt recovery options associated with the City’s non-performing exposure to LEC, and all available avenues to recover the “Taxpayer” money ?

7. Why are your committing 12.66 % of the City’s available 2014 budget resources, to further investment in a non-core asset, when all the existing LEC loans and receivables are already essentially bad debts ? • Why are you withholding from taxpayers, full and complete access to these financial issues, by conducting LEC matters exclusively during in camera sessions beyond our ability to make enquiry ?

8. Other Issues - Transportation • If you canvas the vast majority of residents, regarding the single largest impact currently effecting their quality of life as a resident of the City of North Vancouver, the issue that is most prominently disclosed is: “VEHICLE TRAFFIC” • Traffic on Marine Drive, Keith Road, Lonsdale, Hwy #1, Main Street, Mountain Hwy, Lynn Valley Road, Low Level Road, 1st and 3rd Streets, First and Second Narrows bridges. • We are all extremely frustrated with the lack of transportation planning.

9. I note that the City’s population forecast in 2013, is almost equal to the 2033 population plan previously forecast. Were now 20 years ahead of our population growth plan. • I also note that the 2014-2023 plan has no transportation planning monies until 2016, and no meaningful amounts until 2018, (5-years out). Why is transportation planning receiving such a low priority by this council, when it is such a large issue for City residents?

10. Other Issues – Fresh Water Pipelines • We have potable water pipe in the ground that was put there in 1913, 100 years ago ! • We have fresh water pipe leaking at 17th and Grand Blvd, and have had for over a week. Yet no one has taken steps to fix this water leak. The City’s current solution is to apply salt to stop water from freezing! Question: • Where in the budget is the capital monies to replace this essential potable water delivery system ? • Do we have a long term replacement plan for the potable water system? Where is it? And how much will it cost ? • How is the water system replacement to be funded ?

11. Other Issues–Waste Water Treatment • The single largest capital project on the horizon for City residents is the new waste water treatment facility to replace the existing Lions Gate facility. • The proposed plan does not allocate any monies to the waste water treatment replacement project. Why ? Question: • How do you intend to fund this project ? • Are you forecasting a new tax or levy outside the proposed funding plan ?

12. Other – Harry Jerome • It is my understanding that the $8.0 m in the plan for Harry Jerome is a “place keeping” funding allocation. But the plan also says that the 2014 funds are expected to be spent in 2014, which is at odds with the “place keeping” concept. Question: How much of the $8.0 m will be spent for planning purposes in 2014, and when will approval for this expenditure be sought ?

13. Funding Sources • At FC – Attachment 2, at page 3, it appears the City intends to drain 10 of 22 reserve funds to zero value, or $1.00, and reduce the balance in most other reserves substantially. • Overall City reserve funds will drop by 50% in one year. • To appropriate and/or consume 50% of all the City’s reserve funds, for planned use in a single fiscal year is inappropriate conduct by any council, at any time.

14. Other – Streets & Transportation • The 2014 plan has a total allocation of $5.6m, of which only $1.337m has been allocated to paving. • Previously we were told by Mr. Tollstam that utilities did not pay the cost of road repairs when disturbing City Streets and infrastructure. • Attached is a copy of the “Operating Agreement” under which Terasin gas reimburses the City for all repair costs associated with installation and maintenance of Terasin pipeline infastructure situated on City lands. Mr. Tollstam’s previous statement to me in this respect was incorrect ! • Why don’t we have a similar agreement in place with LEC ? If we do, then please produce a copy.