Council calls conflict rules too limiting
As municipal public servants throughout B.C. willingly rejig their positions on non-profit organizations, councillors in Merritt are resistant to conflict of interest rules the Appeal Court clarified in January.
Conflict of interest has been a hot topic in B.C. communities since a followup report in January from Municipal Solicitor Colin Stewart of Stewart McDannold Stuart Barristers and Solicitors.
The report is a response to the Court of Appeal decision that ex public servants on Salt Spring Island, Christine Torgrimson and George Ehring, were in conflict when they voted to fund non-profits on which they were members.
The ruling overturns the B.C. Supreme Court decision that defended the councillors’ interests.
The councillors voted to fund $8,000 to two environmental organizations on which they were directors.
Councillors outside Merritt touted the clarified rules which, according to Prince George Coun. Murry Krause, provides certainty to many of those who serve on city council.
Following the report, City of Prince George Coun. Lyn Hall resigned his position as the director of the Prince George Winter Games Host Society.
City of Powell River Coun. Russell Brewer resigned from the boards of Tourism Powell River, Powell River Cycling Association and the Sunshine Coast Tourism.
“Stepping down from these organizations in light of this ruling was the right thing to do,” he told the Powell River Peak. “I suspect this ruling may also have implications for other local elected officials that are active in non-profit organizations.”
Those are just a sample of the response from public servants in two B.C. municipalities.
But in Merritt, councillors questioned whether flipping pancakes at Merritt Flying Club functions qualifies as a conflict. Others questioned whether buying a pass to the Nicola Valley Aquatic Centre is a conflict. Council was also concerned they can’t vote for funding the paving of a street they live on.
As perhaps the most vocal Merritt opponent to conflict laws, Coun. Alastair Murdoch threatened to walk out on a funding meeting earlier this month in a decision to grant money for the Nicola Valley Community Arts Council.
“If there is four gone,” he said, “then the meeting is cancelled. That’s what happens when you go against something like the Arts Council.
“Should people who go to the [Nicola Valley Aquatic Centre] bow out?” he added.
He eventually retook his post in council chambers.
Murdoch reluctantly left his position in January as president and director of the Nicola Valley Transit Society following separate legal opinions ordered by the city and himself.
Both law firms agreed Murdoch was in direct pecuniary conflict.
Murdoch had been making motions since 2008 about transit-related initiatives.
“The new Court of Appeal ruling would have required me to [step down],” he said, several days after the meeting at council chambers. “I don’t think that is fair for the people who voted for me, because one of the things I ran on was the bus service.”
He said he doesn’t agree with the recent Appeal Court ruling.
“It’s the law of the land, so I’m stuck with it,” he said, adding that he feels the conflict of interest rules are too strict. “It puts too much of an emphasis on the negative things that can arise from conflict of interest and not sufficient consideration given to challenges to communities that the current conflict guidelines, as approved by the Court of Appeal, laid down.”
He said the B.C. Supreme Court had it right in the original Salt Spring ruling when it determined no personal pecuniary interest in the votes.
“When you’re looking at communities with less than 10,000 population, you have a very limited number of people who are interested in being volunteers in a fairly senior level,” Murdoch said. “When they say you can’t do council and be a volunteer, then you lose some of your volunteer base.”
He said many people won’t run for council if they can’t also volunteer.
“I think there is concern in a lot of communities that this is going to have a big effect on rural and small communities in B.C. and that’s very unfortunate,” he added.
But according to Victoria lawyer John Alexander, the Appeal Court ruling doesn’t mean all councillors need to quit involvement with any non-profit of which they are a member.
“I think it means you shed your leadership roles inside those not-for-profit organizations,” he told the Victoria Times Colonist.
Alexander represented the Salt Spring residents who took legal action against the trustees.
He said while there is no evidence of a personal interest in Salt Spring’s Torgrimson and Ehring funding the environmental groups, the money was taken offline, “so they didn’t have to account anymore for what they actually did with the money.”
Merritt Mayor Susan Roline and city administration have said they side with the conflict rules, but have faced consistent opposition from councillors.
Roline, who brought Stewart’s January report to council, said she has been trying to tighten up on potential conflicts among Merritt councillors since she was elected in 2008.
“The basis for all of this is we need to get back to basics in this country,” she said in council chambers. “There is no trust in politicians anymore and there is low voter turnout because there have been so many conflicts of interest.”
Roline and administration were the lone people at the meeting who spoke in favour of the clarified conflict rules.
“When you sign the [Declaration of Oath of Office] you are signing that, as an elected official, you will not be having conflict in public matters,” she told council. “The court has been very explicit in how this comes together.”
Roline said after the meeting that council needs to understand that the Community Charter is the law.
“You can’t break the Charter,” she said. “If you do, you’re breaking the law. Many of our council aren’t letting that sink in because they feel what they are doing on those organizations is more important than their role as a councillor.
“It’s unfortunate that our taxpayers are suffering because we aren’t doing the business we were elected to do. We are fighting with each other.”
She said much of her energy is dedicated to trying to enforce the Community Charter — but other work needs to be done.
According to Coun. Kurt Christopherson, the voters should simply trust that politicians won’t abuse their positions.
“If they thought any of us was going in there with an agenda, they probably wouldn’t vote for us,” he said. “There has to be an element of trust.”
“Who is paying the bill for all this crap,” Coun. Dave Baker added.
Noble said the report didn’t cost taxpayers anything.
“We are just passing on information about the laws,” Merritt’s Chief Administrative Officer Matt Noble said as he responded to council rebuffs.
“Someone spends the money because they feel that democracy wasn’t being served,” he said. “We are governed by the rules and they are well-established and passed over a long period of time.”
The Salt Spring Ruling
The Appeal Court overturned the B.C. Supreme Court ruling that was in favour of two elected officials on Salt Spring Island who supported a motion to dedicate $4,000 to the Salt Spring Island Water Council Society, on which they were board members.
The money was earmarked to raise awareness of water issues on the island.
The following month, the same elected officials voted in favour of dedicating another $4,000 to the Salt Spring Island Climate Action Council Society for a progress report on greenhouse gases. The officials were also members of that society’s board.
Neither trustee disclosed their memberships on the boards at either of the votes. Not long after, a court application was brought against the trustees for contravening the Community Charter.
The Court of Appeal noted the rules governing conflict of interest in the Community Charter were in force to “prevent elected officials from having divided loyalties in deciding how to spend the public’s money.”
The ruling went on to say an elected official’s personal financial interests are motivators to vote in a certain way, and that can extend to the financial interests of the organizations to which they are members.
The Court of Appeal based overturning the B.C. Supreme Court ruling on the fact that the provincial court didn’t consider an indirect pecuniary interest as a conflict.
However, as the Court of Appeal pointed out, “by limiting the interest to a personal financial gain, the [Supreme Court] judge’s interpretation missed an indirect interest, pecuniary in nature, in the fulfillment of the respondents’ fiduciary duty as directors.”
“Elected officials often seek legal guidance on whether they are in a conflict of interest and the clarification of the rules affecting councillors who hold directorships with not-for-profit societies would be invaluable,” the report states.
The test to determine whether a councillor is in conflict is determined by whether a “reasonably well-informed elector” would perceive the councillor’s position with a non-profit organization to be in conflict with their duty as a public servant.
If the court finds a pecuniary interest, the official in conflict would be kicked off council. In Salt Spring, the councillors in question weren’t in public office at the time of the ruling and weren’t reprimanded for their actions.
With Files from The Prince George Free Press.
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