Cape Breton Regional Municipality (CBRM) Mayor Cecil Clarke has released his expenses for October-December 2015.

Two quotes from the same expense story in Thursday's Cape Breton Post ( Airfare to China tops CBRM mayor's 2015 expense list ) leaped out at me. First:

For the calendar year 2015, the total for the mayor's expenses was almost $32,000, not including expenses related to port development travel, which are listed separately on the reports filed online and are paid for through the budget of the Port of Sydney Development Corp [emphasis mine].

And later in the same article:

'That is a Port of Sydney expense specific to the commercial file itself versus if I was travelling to business specific to wider CBRM port interests,' [I have no idea what this means] Clarke said. 'We're trying to, as we move forward, define those elements because there hasn't been a port budget per se [emphasis mine] within council...'

To recap: the CBRM council has not approved a budget for the Port of Sydney Development Corporation (PSDC) -- a non-profit organization 100% owned by the CBRM -- yet that organization funded the Mayor's 2015 travel to the tune of $7,570 from its budget .

You see the problem.

I'm not sure I see the difference between the CBRM paying for the Mayor's travel directly and the CBRM paying for the Mayor's travel through its 100% owned company, but this seems to be an important distinction for the Mayor.

And a very fine distinction it is: in July, for example, Clarke lists no expenses under "Port Development Travel Expenses," whereas under "Travel & Conference Expenses" he lists "Toronto/Ottawa/Hamilton Port Development Meetings, $1,935.26," which a simpleton like me would probably have confused with port development travel. And that is why I'll probably always pay my own travel expenses.

But I digress.

If the CBRM has passed no budget "per se" for the PSDC, where does the PSDC get its money?

According to Councillor Ray Paruch, writing in the Post in January 2016, the Sydney Ports Corporation (predecessor to the current PSDC) "had been showing an annual retained earnings of approximately $100,000 but it was not paying its annual rent of $161,789 to CBRM for some time.' Per Paruch:

The PSDC leases and manages the Sydney Marine Terminal and buildings on behalf of CBRM. PSDC has annual revenues of approximately $1.5 million collected from wharfage and berthage fees, tenant leases, events revenues, etc. and it has annual expenditures of approximately $1.4 million consisting of wages and salaries, repair and maintenance, security, leases, etc.

But the Sydney Ports Corp also had a "substantial" $2.5 million trust fund for the "construction and installation of navigational aids to assist vessels entering and exiting Sydney harbour" (CB Post, February 19, 2015). The money was left over from the harbour dredge and was being administered by Enterprise Cape Breton Corp (ECBC) which became part of ACOA in the spring of 2014.

In April 2015, when the PSDC took over the assets of the Sydney Ports Corp, it took over that $2.5 million trust fund. And yet, the harbour is still without new aids to navigation. Asked about this in February 2016, Usher told the Chronicle Herald that the port's "$1.2 million" contribution to the navigational aids project was intended to "incent" the Coast Guard to complete the project, valued by the CH at an estimated $3.4 million. The Coast Guard failed to proceed, so Usher "redeployed" some of that money.  Could that money have been "redeployed" to a $159,000 port study from Bechtel and an $82,000 port study from Industream of Copenhagen? Usher told the CBC in December 2015 that the PSDC had paid both those bills.

At the risk of sounding like Columbo, I have a few questions. First, "incent?" Really?

And second, what happened to the rest of that $2.5 million that had been earmarked for the navigational aids? [grabs pencil, does math] The $1.3 million left over? And third, did Council approve that "redeployment" of federal funds or is the PSDC CEO free to make that kind of financial decision without oversight?

While you're pondering that, let me remind you of a third possible source of PSDC funding: remember all that port marketing money that was sloshing around in August 2015? The feds chipped in $500,000; the CBRM coughed up $250,000; the province added $100,000; Business Cape Breton came up with $50,000 and the budget-less Port of Sydney Development Corporation itself contributed $135,000 for a $1 million total.

If PSDC has access to that, plus the navigational aids trust fund, then that's $3.5 million it can spend, apparently, without oversight from Council.

Debts?

At the time it was dissolved, the Sydney Ports Corp owed the CBRM $1.4 million in back rent. I have read both that the "assets and debt of the Sydney Ports Corp. will be transferred to the new non-profit group replacing it," (Cape Breton Post, February 19, 2015) and that the PSDC would not assume this debt (Marlene Usher in a presentation to CBRM Council, February 17, 2015 -- of course, this was the same presentation in which it was suggested that the marketer selected to promote the port "should have a strong Port background.")

So which is it?

As for the lease agreement itself, lawyer Jim Gogan, who represented the CBRM on the port file, said the original lease would be cancelled because a number of its provisions “are not really relevant to the operation moving forward.” (Cape Breton Post, February 19, 2015) But did the PSDC sign a new lease? And if so, what are its terms?

It's also interesting to consider what the PSDC isn't paying -- it isn't paying Marlene Usher's $200,000 annual salary (ACOA pays one half, the CBRM will pay the other "until the new port board is viable," according to Clarke).

Is the PSDC paying the salary of the newly hired business development manager? Will it pay the salary of the soon-to-be-hired administrative assistant?

This Just In

And just when I thought things were as confusing as ever they could be, the wonderful Sherry Finney throws more information into the pot (or seething cauldron, as it were).

It seems that from December 2014 to March 31, 2015 -- that is, until the day before the old Sydney Ports Corp. became the new Port of Sydney Development Corporation -- there WAS a port budget.

Finney attended the December 2, 2014 Council meeting during which it was discussed. As she reported in the comments section here on goCapeBreton, three items in that budget caught her eye:

Expenditures – Consulting Services - $50,000

Funding – 1) CME Consulting Fee $25,000 and 2) Commitment of Private Funds $150,000

Which, I must say, really gives weight to my theory that a carefully constructed budget is better than a cloak of invisibility when it comes to disguising your actions. Which consultants were paid $50,000 by the port? What did they consult on?

Better still, what did the port do for CME in the consulting line that was worth $25,000? (You remember CME? Canadian Maritime Engineering? The firm that bought Archibald's Wharf from the CBRM for $200,000?)

And best of all, who committed those private funds? Because, despite the lack of a subject in that line item, those private funds did not commit themselves.

Luckily for us, Finney decided to press for answers, so she submitted a FOIPOP request to the Municipal Clerk of the CBRM asking:

1. Who is the individual who committed $150,000 in private funds?

2. What services did the Port provide CME in exchange for consulting fee? Please provide contract.

3. Who was paid $50,000 in consulting services?

Then, I presume, she did all those things you have time to do while awaiting the results of an access to information request in Canada -- planted, cultivated and harvested a kitchen garden; got her port executive accreditation (10 times); learned Spanish.

Eventually, she received the following answers:

1. Harbor-Port Development Partners committed $150,000 in private funds.

2. There were no services provided by the Port to CME in exchange for the $25,000 consulting fee, nor was there a contract. This amount was one of the eight elements included in the proposal outlined in John Whalley’s Issue Paper dated December 1, 2014. “CBRM will use $25,000 of the funds from the sale for on-going port development costs.”

3. CBRM paid Business Cape Breton (BCB) the $50,000 for consulting services. BCB contracted with a third party for these consulting services; there was no contract with CBRM.

Think about it -- that's what it looks like when they HAVE a budget. Now imagine what it's looked like since March 31, 2015, when they've been operating freestyle.

As Finney points out, Harbor Port Development Partners -- Barry Sheehy and Albert Barbusci -- "committed" $150,000 in private funds to the old Sydney Ports Corporation and six months later were given exclusive rights to market the port. What does that commitment of funds mean? Do they own a stake in the PSDC? Also (thanks, Joe Ward!) HPDP didn't exist as a legal entity in December 2014 -- it was registered in May 2015, so how does that work?

Questions abound. And in an attempt to get some answers, I am sending the following questions to the Mayor, the CEO of the Port of Sydney Development Corporation and all the CBRM Councillors, and I'm ccing the Minister for Municipal Affairs:

1. What is the ownership structure of the Port of Sydney Development Corporation (PSDC)?

2. Does the PSDC have a budget? If so, where can it be viewed?

3. Does the PSDC have access to the $2.5 million trust earmarked for the construction and installation of navigational aids in Sydney Harbour?

4. Does the PSDC require the approval of CBRM Council to spend that money?

5. Has the PSDC spent that money for items other than navigational aids, and if so,what has this money been spent on?

6. Does the PSDC control the $1 million in marketing money provided to the CBRM from various government sources last August?

7. If so, has it spent any of that money and what has it spent that money on?

8. Has the PSDC reported regularly to CBRM Council on its activities? 

9. Does the PSDC pay the salary of its newly hired business development manager?

10. Does the PSDC have a lease agreement with the CBRM and if so, what are the terms of that agreement?

11. Did the PSDC assume the $1.4 million debt of its predecessor, the Sydney Ports Corp, and if not, what happened to that debt?

I will let you know when (and if) I receive answers.