The City of Vancouver’s review into how a development company received a $1.5-million waiver meant for rental buildings has revealed the waiver was issued in error, with no evidence of fraud or illicit intent.
It does, however, reveal a City planning system plagued by poor oversight and stretched thin by record business, as Mayor Gregor Robertson admitted Saturday.
“The challenge here at the City is that we’ve been so busy with construction and development,” the mayor said. “In recent years we’ve had record numbers of activity, so City staff have been swamped with activity, and when it’s that busy, mistakes can happen.”
Last week, Global News reported the City had issued a $1.5-million discount to developer Onni for their Charleson project at 1396/1398 Richards Street. Known as a “DCL waiver,” the break is meant for projects that contain 100 per cent rental units.
READ MORE: City of Vancouver says it mistakenly gave $1.5M break to real estate developer
Onni’s Charleson project contained rental units and condominiums, meaning it was not eligible for the waiver under the City’s Rental 100 program.
In the report of the audit undertaken by the City’s chief risk officer, the blame is placed on an email miscommunication that occurred in October 2014. Two questions were sent by the coordinator of the waiver program to the City’s housing department regarding the Charleson project: one asking whether a change to the number of units was allowed, the other asking about eligibility for the DCL waiver.
The review determined the coordinator received an answer to the first question, but interpreted it as a go-ahead for awarding the waiver.
However, the report mentions that the coordinator responsible for the miscommunication has since retired and was never interviewed as a part of the investigation.
The report also says the incident occurred “during a transition period,” when rules regarding the waivers and the approval process for them were changing. It also admits to a lack of documentation.
A list of 10 recommendations for avoiding similar mistakes is included in the report. They focus on streamlining the reviewing and approval process, as well as an overall retraining of department staff.
The City will now conduct a full audit of the DCL waiver program that’s expected to last into January 2017. The audit will take a look at all 29 approved waiver applications to ensure no other mistakes were made.
Earlier this week, the City announced they had hired an external auditor, KPMG, to peer review that internal audit. Critics, however, say this isn’t good enough, calling for a third party auditor from the province, such as the ombudsman.
“I think it’s good for the confidence of the people to bring in a third party, such as an ombudsman or some other auditor, who doesn’t already have a relationship with the City,” NPA city councillor George Affleck said.
Affleck confirmed he would bring a motion to council for that third-party review this week.
The city manager’s office says more interviews may follow during KPMG’s audit, but would not confirm the identity of the coordinator at the centre of the error or if that person would be interviewed at a later date.
Onni paid the City back just over $1.5 million last week.
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