Lease of Land to SREL – January 2016

Don’s Dialogue –   January 31, 2016 – Lease of Land to SREL

I am very pleased that on January 26th 2016, Council saw the wisdom of entering into a lease agreement with Swift River Energy (SREL), for the lease of 2 parking lots and Portage Landing in exchange for SREL not using Margaret Burgess Park during or after the construction of their small hydro plant.   SREL will also provide financial compensation to the Township, as well as rehabilitating the Portage Landing site to provide wheelchair access to the river and viewing areas from the hydro plant to both the Moon River and the North Bala Falls.   However, there are still several items that must be completed by SREL before they are given unencumbered access to the Township lands.

The recorded vote was approved 6 to 3 with Councillors Harding, Kruckel and Currie voting against the lease. Councillor Nishikawa did not attend the January 26th Special Council Meeting.

The meeting was attended by an estimated 175 to 200 people, many of them supporters of the Save the Bala Falls organization, who remain vehemently opposed to the construction of any power plant at the North Bala Falls location.   During the meeting, Council heard from 10 delegations who were opposed to the lease of Township Land to SREL. Many indicated that they did not believe adequate public consultation had occurred and that a public meeting should be held after the public had an opportunity to review details of the lease.   Some expressed concern with the composition of the Working Group that Council formed to negotiate with SREL. Others felt issues such as monetary compensation, length of the lease term and disruption to local business and tourism needed further public consultation.

Many others indicated that Council transparency, with closed door meetings and lack of full and open disclosure of lease terms, was a violation of provincial legislation.

I would like to address many of the issues that were and have been raised on this project over the last 10 plus years.   I am sure that most people know that in 2005, the Province of Ontario granted SREL the right to construct a small hydro plant on Ministry of Natural Resources and Forestry (MNRF) property at the North Bala Falls, subject to the completion of several requirements. This decision was part of the Provincial Government’s Green Energy Act. SREL has been working with various government agencies, First Nations, the local community and both the District of Muskoka and Township of Muskoka Lakes to complete the various requirements and obtain the necessary permits to move this project to fruition.   I would encourage people to visit the SREL Bala Falls website if they are interested in reviewing the numerous studies and reports that SREL completed to meet the rigorous government requirements.

Shortly after the current council took office in December 2014, all groups for and against the project, including SREL, were encouraged to delegate to Council to express concerns about the project and present Council with their requested asks going forward. Council and Staff addressed most of the asks which were primarily to write letters to upper levels of government.   SREL requested that the Township put together a task force that would work together to develop a mutually acceptable plan for the site.

The Township/SREL Working Group Advisory Committee was composed of 2 representatives from SREL, 2 Staff members, 3 Councillors (one from each ward) and an Independent Chairperson. I might add that Councillor Currie, who was opposed to the formation of this committee from the outset, was adamant that he be a member.   Councillor Currie is the current President of the Moon River Property Owners Association, a current Director of the Muskoka Lakes Association and has a very close relationship with Save The Ball Falls. All three organizations are opposed to this hydro project.   Therefore, I thought he would provide more than adequate input to ensure that the concerns of these organizations and their supporters were given adequate consideration.   Councillor Currie certainly left no doubt with the Working Group that he and the groups he supports were vehemently opposed to this small hydro project and he provided very few constructive suggestions to the Working Group.

In May 2015, Council approved in principle the idea that SREL would lease Township lands for $125,000, rehabilitate the Portage Landing lands and not use Margaret Burgess Park for construction.   Township Staff was directed by Council to enter into detailed negotiations with SREL to formalize a commercial lease for the three Township owned properties.   These negotiations were initiated between the solicitors for both parties.

In addition SREL and their Design Committee of local residents and a well known architect, Karl Stevens, finalized the concept drawings of the powerhouse and rehabilitation options for Portage Landing.   This was presented to the public at a Council Meeting in late Summer 2015.   Council, including Councillor Harding, approved Option 3 based on a report presented by Staff, that if a lease was signed Portage Landing be reconfigured to have a wheelchair accessible ramp to the water and access to a viewing platform on the powerhouse.   Several groups opposed to the small hydro plant, organized numerous delegations before Council and Committee of the Whole on many occasions during 2015.

On at least 3 occasions, council reviewed drafts of a lease and provided our solicitor with direction concerning changes they desired in the lease agreements.   This was done in Closed Sessions of Council as permitted under the Municipal Act for matters subject to solicitor client privilege. I also want to make it perfectly clear, that contrary to Councillor Curries’ assertions to the public at the January 26th Council Meeting, all members of Council are fully aware of the contents of the draft lease agreements.

In November 2015, Save the Bala Falls solicitor sent the Township a letter, advising the Township not to enter into any lease with SREL, unless certain information to numerous questions was provided before the November 15, 2015 Council Meeting. Within a week, Save The Ball Falls subsequently followed with litigation seeking an injunction to prevent the signing of a lease with SREL.

Both SREL and the Township defended their rights to enter into the commercial lease agreement for the 3 parcels of land.   Justice Thomas Wood ruled on Dec 24th, that there was no merit to the request for an injunction by STBF and the case was dismissed with costs. The judge indicated that in his opinion, the lease would be beneficial to the people of Bala and the Township.

In my opinion there has been a huge amount of public input on this project over the past year and in particular, information regarding the purpose and benefits of leasing the lands.   Additional public input was not required at the January 15, 2016 Council Meeting.   All members of Council knew the details of the lease. We were all elected to represent our electorate, not to put the resolution out for a public poll or referendum.   Councillors Harding, Nishikawa, Currie and Kruckel could not accept that the majority of Council might have voted to accept the lease.   So they abdicated their responsibility and postponed the inevitable vote by leaving the Council Chamber which forced the loss of quorum and terminated the business of the Township.   This is a violation of their Oath of Office and a failure to perform the duties of their elected office.

I have reminded Councillors, that the Mayor and Clerk are routinely given authority by Council to execute leases, site plans, land title transfers and numerous other legal documents, without a referendum or even a review of the documents by Council or the public. The request by the 4 Councillors to have the public review the draft lease before it was finalized and signed, has never happened during my 5 years on Council.   The lease in its draft form is not a legally binding document. When it is fully executed by all parties it is a legal document and must be made available to the public for their scrutiny.

It is interesting to note that during the July 30, 2012 Council meeting, Councillors Nishikawa and Kruckel signed a resolution to lease a Township owned hydro plant ( Burgess Power) at the North Bala Falls to KRIS Energy. The motion was passed unanimously, with absolutely no objections from Councillor Harding.   At no time was there a walk out of Councillors, or a request to let the public review the lease before it was signed.   What is the difference in these 2 transactions?   None in my opinion!

Township Council Policies and Procedures have no provision for letters or emails to be added to the minutes of our meetings, unless they are part of a delegation before a Committee or Council. However, when the agenda is being approved, Council can amend the agenda to permit this and other requests.   On January 26th, Councillor Harding made a request to amend the agenda, so he could provide a justification for his walk out during the January 15th meeting.   Council approved his request to amend the agenda. No request was made by Councillor Harding or any other member of Council to amend the agenda to allow for the addition of e-mails and letters to the minutes.   I did provided Councillor Harding considerable latitude near the end of the session to move a motion to have this correspondence included in the minutes. However Council defeated this request. I would also note that the Clerk provides every councillor with copies of all correspondence that is directed to Council.

Roberts Rules of Order, on which our procedures are based, provides for each member to ask a question and a supplemental question on each topic or of each delegate. It is usually done after the motion is read, but based on the 10 delegations and 9 members of Council, I applied it uniformly in the interests of efficiency.

Comments have been made that Council, in approving this lease, is not being adequately compensated. I will admit that establishing value and compensation is a difficult task.   However, let me provide some level of insight.   In 2012 Council approved the purchase of the south half of Don’s Bakery Parking Lot, for $170,000, to ensure continued availability of public parking in Bala.   This was a very expensive price to pay for a very small piece of raw land even in Bala.   If one third of the financial payment from SREL is applied to this property ( two thirds to the other 2 properties), it represents a payment of over $20,000 per year or a payback in just over 8 years for a parking lot. Ask any business person if they would jump at accepting a 12% cap. rate for a parking lot. Oh, it gets better, SREL must allow the public use of this parking lot during prime tourist season (May to October).   Quite frankly I think the financial compensation and after construction property improvements are very beneficial for the taxpayers.

This project has been very controversial and caused a great deal of animosity in Bala and the Township.     While most people, myself included would prefer not to have a hydro plant at the North Bala Falls, the decision is not ours to make.   It falls under auspices of the Province of Ontario, who is absolutely committed to maximize the production of renewable power and especially hydro power, close to points of consumption.   The Province controls most of the cards. In 4 years of aggressive opposition to this project by the previous mayor, SREL abandoned the much preferable Option 2 site, negotiated with the 2006 to 2010 Council. Meanwhile SREL continued to check off the boxes of the tasks successfully completed, to construct this small hydro project.

My election brochure says: “Work with Swift River to maximize the benefits and minimize adverse impacts on Bala residents”, at no time did I say I would continue the adversarial approach of my predecessor towards SREL and the Province, nor was I under the delusion that this project was stoppable by our Township.   I believe this lease agreement moves the Township substantially towards what like minded Councillors and I promised and 60% of the voters endorsed.   I also believe that over the past year the public has been engaged and has fully participate in the democratic process to express concerns and voice their opposition and support for Councils actions to date.

It is certainly understandable that some people are upset with the approval of the lease, but under no circumstances does it warrant the blacklisting of businesses, derogatory comments and the personality assassinations I have witnessed.   Our democratic and legal processes have been followed to bring us to where we are today.   The time for acceptance, healing and reconciliation has arrived in Bala and Muskoka Lakes.


Don Furniss