OSOYOOS TIMES-March 31, 2010

By Paul Everest – Osoyoos Times

The Regional District Okanagan-Similkameen (RDOS) is looking into the financial background of a project that brought power to a number of properties on Anarchist Mountain in the 1980s in response to concerns raised by several mountain residents.
In 1981, a number of mountain property owners petitioned the RDOS to have power lines installed that would bring electricity to roughly 30 properties in an area including parts of Hewitt Road, Long Joe Road, Chapman Road and Observatory Road.
The project was expected to cost $110,000 and the portion of that cost to be borne by the 30 mountain residents was $55,000.
The RDOS ended up passing a bylaw that year enabling it to borrow $55,000 with a 25-year window to pay off the debt.
It was agreed that the property owners would pay off the loan over a 20-year period beginning in 1983.
According to RDOS documents, the interest rate on the loan was 15 per cent and it was expected that each property owner would have to pay roughly $293 a year.
Mountain resident Joe Simoes, who moved to the area the electrical system services in 1992, said he and other owners were still paying off that 20-year loan in 2008, 27 years after the money was borrowed.
He had a chance to bring up his concerns to Mark Pendergraft, director for rural Area A, Bill Newell, the RDOS’s chief administrative officer and Jim Tarves, the acting finance manager for the RDOS, during a March 15 information session on the RDOS’s 2010 budget.
Simoes pointed out a surplus of $9,786 listed for the electrical system in the budget documents and wanted to know why the RDOS planned to use that surplus to offset all of Area A’s tax requisition when it should be used to pay back the mountain residents who bore the cost of the loan.
He said over the years the 30 properties that took on the costs of paying for the power lines have split into roughly 100 parcels and it’s impossible to figure out how much the affected property owners have paid towards the loan because the RDOS has not cooperated in providing information to the affected residents.
In an email dated Jan. 26, 2006, to mountain resident Irvin Redekopp, former RDOS treasurer Doug Leahy wrote that “if more people are in the service area then the amount per parcel gets adjusted accordingly.”
Simoes said, however, that he and other residents have not been able to find information that suggests such an adjustment ever took place.
Before the RDOS board approved the 2010 budget at a March 18 meeting, Pendergraft made a motion to transfer the surplus amount for the electrical system from revenues to expenses.
The motion was approved and Pendergraft said after the meeting that the motion will allow for an audit of the electrical system’s records and finances, should the affected mountain residents wish for an audit to happen.
Should it be found that an audit of the electrical system finances is necessary, it would have to be paid for out of the surplus amount, Pendergraft said.
Tarves said after the March 18 meeting that RDOS staff have begun gathering data on the background of the electrical system and the loan, but it could take a while to find all the documents since the project was started in 1981 and the RDOS’s record-keeping and accounting systems have changed over the past three decades.
Once the data is gathered, he said, it will be possible to determine how much an audit of the project would cost.
Since the cost of the audit would come out of the refund, the RDOS would have to go back to the mountain property owners to find out if they want to proceed.
Simoes said, however, that if the RDOS “considers charging Anarchist Mountain taxpayers for an audit, they’ve got another thing coming.”
Ultimately, he said, mountain residents who paid off the loan don’t know how much they individually spent to service the debt or how much interest they paid over the years and they want to know how the RDOS arrived at the $9,786 surplus listed in the budget documents.
Although it was expected that the loan would be paid off by 2001, Simoes’ tax records show he was still paying for the electrical system in 2006 at a cost of $88.82; in 2007 at $84 and in 2008 at $87.72.
Another question he has for the RDOS is why two more bylaws were passed in 1991 and 1997 which placed operational costs and additional debenture costs on top of the annual debt payments for affected mountain residents.
In an email to Pendergraft dated March 23, Simoes said “We did not ask for an audit, but rather what we have repeatedly requested, that being access to the complete financial and accounting information, including loan amount, interest rates, monies paid by all affected taxpayers, service and charges, etc.
“If the RDOS chooses to conduct an audit, any costs will be borne by the RDOS. The surplus in the Anarchist Mountain System account is not discretionary funding; it is the property of taxes payers (sic) who paid into the account and must be refunded to them immediately.”
In an emailed response to Simoes, Pendergraft said “the motion I made at the Board allows for an audit, if and only if it is requested by myself and that would only be done if it is something that the public wants.
“For information purposes if the public wants an audit done on this issue it has to be paid for by those requesting it. As for the surplus amount, it is being determined who is actually going to get the refund and it is hoped that by the end of May a refund would be made.”
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