Port Report: Where Are Our Navigational Aids?

The great $37 million Sydney harbor dredge was completed between October 2011 and January 2012. Over 4 million cubic meters of sedimentary material was removed from a 9-kilometer stretch of harbor channel in less than four months using trailing suction hopper dredge technology as opposed to traditional “clam bucket” dredge technology.

(Okay, okay, I just read that in a description of the project submitted by CBCL, the firm overseeing the dredge, to the 2013 Canadian Consulting Engineering Awards. I believe they were up for Best Supporting Actor in a Trailing Suction Hopper Dredge.)

The harbor dredge was overseen by the Sydney Ports Corporation (SPC), a non-profit agency created by the CBRM to run the marine terminal and cruise pavilion. The project had grown out of the 2007 Ports of Sydney Master Plan, produced by a consortium of marine terminal owners and operators, which pushed the idea of Sydney as the location for a “state-of-the-art” container terminal:

The land and harbour conditions in Sydney are ideal for new terminal development; however, both the container and coal opportunities need to be able to accommodate larger vessels. The existing navigation channel, while having ample deep water in most locations of the harbour, has current water depth limitations of 11.5 m in the outer channel. Therefore, a key recommendation of this Master Plan is to deepen this 7.5 km long outer section of the navigation channel to a depth of 17 m.

Funding for the project was as follows:

 

FunderAmountPercentage of Total
Total$37,000,00099.7%**
Federal Government$19,000,00051.2%
Provincial Government$15,000,00040.5%
Municipal Government$2,000,0005.0%
Nova Scotia Power$1,000,0003.0%

**I presume the missing .3% is just a rounding error.

(Source: ACOA briefing note, 24 February 2015.)

Not only was the dredge completed quickly, it came in under budget by $2,514,185.61.

That money was used to construct and install new navigational aids (fixed and floating) in the harbor, allowing users — including NSP which, as you can see, contributed to the dredge — to reap the benefits of the deepened channel.

JUST KIDDING!

That money was earmarked for new navigational aids, but those aids have never been installed and that money is being spent by the Port of Sydney Development Corporation (PSDC) on “business development.”

How did that happen?

I’ve been trying to figure that out.

 

Access to Information

Earlier this year, I did an access to information request to ACOA requesting any documents pertaining to the remaining dredge funds. I chose the time frame of 1 June 2014 to 31 March 2015 because 1 April 2015 was the day the Port of Sydney Development Corporation took over from the Sydney Ports Corporation and I figured the documents would have to include something about the re-assignment of rights to these funds (silly me).

One of the first documents in the dump was the minutes from a 14 May 2014 meeting of something called the Dredge Project Steering Committee, made up of representatives of all the funders of the dredge project. In attendance were:

Marlene Usher (acting CEO, ECBC)

Joe Shea (ECBC)

Joe Cashin (ECBC)

Tom Plumridge (ECBC)

Joan McInnis (ECBC, recorder)

Aubrey Rogers (SPC)

Gary Campbell (Province of NS)

Howard Lake (Province of NS)

Jim Gogan (The Only Lawyer in Sydney)

Brian Stanford (NSP)

During that meeting it was:

Moved by Howard Lake and seconded by Joe Cashin to approve the transferring of the balance of the Sydney Harbour Dredge trust, in the amount of $2,514,185.61 plus interest into a restricted account in the name of Sydney Ports Corporation and to be disbursed according to the terms of the assumption agreement to the Sydney Ports Corporation. Motion carried unanimously.

I also received a copy of the Assumption Agreement between ECBC and SPC (full document attached below), as drafted by Jim Gogan, which listed the following purposes for which the leftover dredge funds were to be used:

Uses for leftover dredge funds, Assumption Agreement

 

In a 24 February 2015 briefing note to Peter Hogan, ACOA vice president for Nova Scotia,  Joe Cashin, ACOA director of enterprise development, explained the remaining tasks this way:

There are two significant financial commitments outstanding related to the dredge. First is the long-term care and monitoring obligation of a confined disposal facility and fish habitat; and second is the floating and fixed navigational aids project being undertaken in conjunction with the Canadian Coast Guard (CCG).

As a requirement of its environmental approval, the confined disposal facility requires a 10-year construction maintenance and monitoring program. According to estimates provided by CBCL Engineering, the cost of maintaining the monitoring program is approximately $800,000.

Do the math and $2.5 million minus $800,000 leaves approximately $1.7 million for the navigational aids, and, happily (at least at first) this was the price quoted by the Coast Guard.

But no matter the price of those navigational aids, clause (F) (iv) of that agreement is clear:  “In the event any balance may be remaining after satisfaction of the financial obligations of items (F) (i), (ii) and (iii) above, [emphasis mine] such balance shall be used exclusively for the benefit of the Port of Sydney as may be determined at the discretion of SPC…”

The Assumption Agreement was executed on 17 June 2014 (i.e. two days before ECBC was folded into ACOA).

 

Oh Buoy

In July 2014, ACOA signed a memorandum of understanding with the Canadian Coast Guard (full text attached below), stating that SPC would be responsible for upgrading the navigational aids in Sydney harbor. The exact wording is:

SPC shall have complete control and responsibility for the delivery of the Project. CCG may, upon request, provide advice, guidance or support to SPC.

buoy

Buoy removal. Photo by S. Boniecki via CCG.

At the 28 August 2014 meeting of the Sydney Harbor Oversight Committee (which seems to be the post-dredge incarnation of the Dredge Project Steering Committee), the navigational aids were discussed and the minutes include this highlight: “NS Power anxious to see completion. The Atlantic Pilotage Authority to be contacted by CBCL to see if anything can be done sooner.”

But the process had hit a snag in that the navigational aids turned out to be more expensive than originally thought. At a 19 January 2015 meeting of the Oversight Committee, Richard Morykot of the engineering firm CBCL and Aubrey Rogers inform the committee that the cost of the navigational aids (14 buoys, 1 dolphin and 3 towers), was about $1 million more than the original $1.6 million estimate.

At the 12 February 2015 meeting of the committee, it was moved by Gary Campbell and seconded by Howard Lake to “proceed with the tender for construction and confirm cost, proceed with the floating aids portion of the project and complete additional navigational aids at a later date…” The motion was carried unanimously.

The final document I received from ACOA was a 24 February 2015 letter from CBRM CAO Michael Merritt to Peter Hogan, the ACOA VP for Nova Scotia. In it, Merritt states:

As you are aware funds have been set aside from the remaining monies leftover [sic] after the Sydney Harbour was dredged. This money, approximately $1.6 million, resides with the Sydney Port [sic] Corporation in trust for the specific purpose of installing navigational aids in Sydney Harbour.

Merritt then says that “the responsibility to install navigational aids rests with the Canadian Coast Guard (CCG) who have been involved with local stakeholders in preparing estimates for the project.”

How does that jibe with the 2014 MOU of understanding between ACOA and the Coast Guard? Remember that? It stated:

SPC shall have complete control and responsibility for the delivery of the Project. CCG may, upon request, provide advice, guidance or support to SPC.

I would expect that the SPC’s successor, the PSDC, would also have that responsibility, wouldn’t you?

 

Trail Goes Cold

And that, basically, is why I made the ATIP request — to discover whether, when the Port of Sydney Development Corporation took over from the Sydney Ports Corporation on 1 April 2015, the terms governing the use of the dredge funds were changed to allow the new entity to spend the monies on things other than navigational aids.

The documents I received made no mention of the Port of Sydney Development Corporation at all, so it looks like I will have to do another ATIP. In the meantime, though, Usher’s remarks to the press about the funds are interesting.

In February 2016 she told Tom Ayers of the Chronicle  Herald that the navigational aids were “a Coast Guard responsibility.”

‘Our contribution toward the project ($1.2 million) was designed to incent the coast guard to proceed immediately. Since this has not happened, some of our funding has been redeployed to other projects,’ Usher said in an email.

In March 2016, during the audited results-free Port of Sydney Annual General Meeting, Usher provided further information about the disposition of the leftover dredge funds to the Cape Breton Post:

An oversight committee governed the funds from the assumption agreement and decided the best use for the “leftover funds” would be for port activities, Usher said.

The money was transferred into a trust for specific uses of the port, she said.

The balance of the fund was $2.3 million at the end of the fiscal year on March 31, 2015 – a day before the Port of Sydney Development Corp. took over operations from the now defunct Sydney Port[s]  Corporation.

The current balance of the fund as of Friday was $1.8 million because $492,904 has been used in the past year to support promoting the greenfield site as a future deep-water container terminal.

An additional $420,000 will be withdrawn from the assumption agreement fund to pay for the port’s ‘business development activities’ in the upcoming 2016-17 fiscal year.

If Usher is talking here about the assumption agreement between ECBC and SPC (and I think she must be) then she’s simply leaving out the part that says those funds may be used for other port activities only after the new navigational aids have been put in place.

 

This just in…

The audited financial statements for the Port of Sydney Development Corporation, the ones that weren’t available for the March 12 AGM, have quietly appeared on the corporation’s web site — they are dated 13 September 2016. I discovered them this morning and raced through them to see what they said about the dredge funds. This is all I could find:

Portion of Port of Sydney Development Corp audited financial statement, March 2016

There is no specific mention of a trust fund with a balance of $2.3 million at the time of the takeover, and yet Usher is clear that PSDC has been using money from that fund to finance business development (which clocks in at $567,231, elsewhere in the documents).  Is there an accountant in the house? If so, please have a look at these documents and tell me what you think.

 

Ask and Ye Shall…Be Ignored

The first rule of ATIPs is, before you file one, try simply asking for the information.

So I wrote Usher and Merritt to ask who authorized the PSDC to spend the leftover dredge funds on “business development activities.”

Not only has neither replied, neither has even acknowledged receipt of the questions. (Think about that — if there is a document stating that the PSDC is authorized to spend those leftover dredge monies however it likes, then what could be easier than to send me a copy of it? Why would you, instead, ignore the question?)

So I asked ACOA, which represents the federal government, which provided the bulk of the funding to the dredge project, at what point it was decided the leftover funds could be spent on business development. I received this answer from ACOA director of communications and outreach Alex Smith:

Since the dredging of the Sydney harbour was completed in 2014, there have been unanticipated cost increases related to navigational aids.

Discussions surrounding navigational aids continue between all partners involved in the project.

Partners are also reviewing how the monies can best be allocated in support of future growth and development of the Port of Sydney facilities.

I wrote back and said this was hardly a reasonable answer, given that the PSDC has already “allocated” $492,904 of these monies and intends to “allocate” $420,000 more. (I didn’t bother pointing out the dredge had been completed in 2012.)

Smith replied:

I suggest you contact The Port of Sydney Development Corporation. It is best positioned to answer questions related to expenditures. 

Yeah, well, you know how that turned out.

I also contacted Nova Scotia Power’s parent company, Emera, to see if NS Power was still “anxious” to see the navigational aids installed and ask if it was concerned the monies earmarked for those aids were being spent on other activities.

No response.

So, ATIP it must be. Which means, unless this is the fastest ATIP request in the history of government information, it will be well after the fall municipal elections before I receive any information.

That’s really too bad.
Full text, Assumption Agreement between SPC and ECBC:

assumption_agreement

Full text: Memorandum of Understanding between ACOA and Canadian Coast Guard:

mou003

Featured image via a2ua.com
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