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ADDITIONAL INFORMATION
A kind reader in the know provided these supporting documents explaining how leased lands are over-valued in the City of Vancouver's Property Endowment Fund.
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UNDER WHO'S WATCH DID THIS OVER-VALUATION HAPPEN ?
Vancouver watchdog citizen Robert Renger is doing the same thing that The Langley Record is doing in warning taxpayers of the Township of Langley to approach with caution Mayor Rick Green's suggestions of a Property Endowment Fund fashioned after the City of Vancouver.
In an article appearing in today's issue of Straight.com, Renger's letter to the City of Vancouver dated January 18, 2009 is published:
Renger's e-mail to the mayor, council, and the city manager:
From: ROBERT RENGER
Date: Sunday, January 18, 2009 11:01 pm
Subject: Property Endowment Fund overvaluation
To: mayorandcouncil@vancouver.ca,penny.ballem@vancouver.ca
To the City Manager, Mayor and Council,
I want to thank you for becoming transparent and forthright with the public (and especially the City's taxpayers) regarding Olympic Village issues.
Hopefully you will now follow this same approach with respect to the value of the City’s Property Endowment Fund. I am certain that an independent evaluation would find that it is worth significantly less than the $2.7 billion claimed in the City’s Financial Statements.
It seems clear to me that the value of the PEF has been systematically overstated for many years, by the way in which overvalued leased lands (including lands that the City has leased out for long prepaid terms) are included as PEF assets. There are details and examples in the attached documents which I wrote several years ago (and to which I received no substantive responses).
On November 11, 2008, I sent this same material to Ken Bayne, your General Manager of Business Planning and Services, after I heard him on the radio saying “Vancouver's Property Endowment Fund is still worth two or two and a half billion dollars in real estate”. In my email I asked him the following question:
"Can you tell me how much of the Fund’s $2.5 billion in land assets is land for which the City has sold prepaid leases, and whether or not you think that land’s value as a City asset has been overstated?"
He hasn't answered or even acknowledged my email.
I expect that at some point (even if City Hall tries to ignore the issue) it is going to become publicly evident that:
(1) the City has been greatly overstating the value of PEF land assets, and that
(2) its actual assets are mostly not very liquid.
In the meantime, I am concerned that bad information leads to bad decisions. So I hope you will address this issue proactively, without delay.
I would appreciate being informed of your intentions.
sincerely,
Robert Renger
This article also states, "Renger has claimed that the city has "systematically overstated" the value of the Property Endowment Fund for many years by overvaluing leased lands. He believes that an independent evaluation would reveal this."
It will be interesting to learn if these allegations are correct, and just how long this overstating of value has gone on in the City of Vancouver. Also of interest to the taxpayers of the Township will be to see under which City of Vancouver Real Estate Manager(s) this occured, if the allegations are found to be true. Stay tuned folks!
8 comments:
What are Mr. Renger's qualification that would lead the City of Vancouver to take him seriously?
"he received a notification from the city that the information has been passed to the mayor and councillors. So far, no member of council has introduced a motion calling for an independent analysis of the value of the Property Endowment Fund."
Perhaps the above statment is quite telling?
"This evaluation mollifies credit-rating agencies, which influence how much interest the taxpayers must pay on any city borrowing."
One would think the lenders would have satisfied themselves as to the validity of the evaluations.
Horny Toad
Mr. Renger has been a very informed watchdog of Vancouver City Council since at least 2000 and we believe him to be a lawyer. He was also instrumental in exposing several fiascos in Vancouver ove rthe years and spanning several administrations.
Yes, just as the sub-prime fiascos in the States, we all know that these rating agencies and the financial institutions do a tremendous amount of ude diligence on the hundreds (if not thousands) of companies and municipalities in their portfolios or area of responsibility. You MUST be the correct one Horny Toad. Just as Mayor Green must alsways be right. We get it pal.
For anyone interested, here are links to 2 documents explaining how leased lands are (over)valued for the City’s Property Endowment Fund
http://www.scribd.com/doc/11459745/PEF-Leased-Over-Valuation
http://www.scribd.com/doc/11459746/to-MAFF-re-PEF-2000may15-
"we all know that these rating agencies and the financial institutions do a tremendous amount of ude diligence on the hundreds (if not thousands) of companies and municipalities in their portfolios or area of responsibility"
I thought I read that the "lending institutions" were considering downgrading Vancouver's credit rating due to the Olympic Village fiasco. So it would appear they do "some" checking.
HT.
Thanks for this excellent documentaiton. They should cause ALL Langley taxpayers to stand up and pay attention. All except one or two of course, tas they blindly support this mayor.
Yes, these agencies watch the news like the rest of us and are very retrospective in doing their jobs, just as auditors are. This is why companies that SUCK big time were allowed to keep their high bond ratings until the madness was discovered and exposed.
Horny - you just don't get it do you! Never met the man, voted for him and we are in a love fest! This mayor will systematically break apart the TOL one piece at a time. He has not done his homework nor understand the process nor the inherent value of Township assets. I sure hope one or more Councillors will stand up to this 'bully' and shoot him down. This is a serious situation where wrong advice is being directed to the taxpayers from obviuosly frivilous individuals who have a checkered past.
Ask yourself (better still go to the mayor and ask what the credentials of George Lenducci are -finished 16 of 16 condidates in the 2005 election, Calvin Paterson - check up on his fine work with his neighbour on the lake - brutal, Ken Baker - a CA with NO understanding of municiapl budgeting). And supported to the nines by two guys named Willy and Horny - yuck!
"Ask yourself (better still go to the mayor and ask what the credentials of George Lenducci are -finished 16 of 16 condidates in the 2005 election, Calvin Paterson - check up on his fine work with his neighbour on the lake - brutal, Ken Baker - a CA with NO understanding of municiapl budgeting). "
You seem to have all the information. Why don't you enlighten us all?
And don't leave out HOW you know Ken Baker has no understanding of municipal budgeting!
HT.
Renger for Mayor!
Save us from Tricky Ricky and Kooky Kimmy!
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