Who is Vision's Six Million Dollar Man?

Post by Mike Klassen in

12 comments

six million dollar man
Someone's loaning Gregor $6 million for his latest green scheme – may we ask 'who?'

Vancouver Sun City Hall reporter Jeff Lee broke the news this week about Gregor Robertson's plan to fund home energy retrofits, and allowing citizens to pay it down on their property taxes. In his original story he reported:

The city will seek requests for proposals from banking institutions that will administer the financing. But for now, a private businessman will kick-start the program by providing upwards of $6 million in seed financing, according to Johnston.

It struck Lee as strange that the financial details of the whole program were so vague. In the story's last paragraph he writes:

Left unclear in this project is how the private backer was identified, what his rate of return will be and whether there is a component that may have tax liabilities for Canadians even if the program is self-financing at the city level.

When pressing for more info in an interview with Hollyhock Deputy City Manager Sadhu Johnson, Lee wanted to know who was funding the program to the tune of $6 million. He remarks in his blog:

One of the questions I couldn't get an answer to was why they didn't put out a request for proposals for that $6 million in seed money they say they're getting from a mysterious businessman. (When I first started to do the story, the city characterized the money man as "a philanthropist" who would get interest on the money he is providing to the city. When I asked how someone can be a philanthropist if it's a business transaction, they changed the description to "businessman". I also asked and was told it isn't Joel Solomon, one of Robertson's major backers and mentor.)

It was smart of Lee to ask that question, although I doubt they would be stupid enough to directly involve Vision's bag man in a project like this. It may be someone connected to the Hollyhock mafia, or perhaps not at all.

As Lee points out, next year there's an election happening, so it's no surprise that since Vision will have a tough time running on their record, they'll be spending a lot of your money to curry favour. His latest blog on the subject of these home retrofits points out that the program has already been attempted in the USA, and not without big problems.

The idea...is modeled after a program called Property Assessed Clean Energy started in Berkeley, California that caught on swiftly with city governments in 22 states. Ah, but now we understand there's a bit of a catch.

It turns out that the Federal Housing Financing Agency, the U.S. regulator that oversees mortgage guarantors like the federal behemoths Fannie Mae and Freddie Mac, doesn't like the program because it puts retrofit loans at the top of the list of creditors on a property. This "first lien" threatens the stability of Fannie and Freddie-guaranteed mortgages, they say. So last July the FHFA clamped down, and Fannie and Freddie no longer insure mortgages on properties that have "first lien" retrofit loans.

What this all means for Vancouver is that it has fair warning that it needs to tread carefully in how it develops its own retrofit program. Already saddled with the financial problems of the Olympic Village, the city's good will well with the public is a tad shallow when it comes to new programs out of the norm.

Read Jeff Lee's follow-up story from Thursday – U.S. problems won't change energy retrofit plans – which many of us may have missed in all the fuss over BC Liberal leadership announcements.

Of course, the obvious question is this: why is the City of Vancouver getting into this program at all? There are plenty of other options for homeowners to get low interest loans and pay them down over the span of several years. Why does the City need to administer or even manage this in any way when the private sector can do it better?

There's also those 20,000 green jobs that Robertson plans to create within the decade. Will a trade putting weather stripping on your bedroom window count as a 'green' job? There's a lot of questions like these we'll be asking in the months ahead.

- post by Mike

12 Comments

How can Gregor & The Merry Greenies think they can hide a $6million dollar source of funding?

He has the political instincts of bag of hammers if he thinks he can just send out Hollyhock Sadhu with some jibber-jabber and think the question is going away.

So now there are two questions . . who is the businessman and WHY did they try and keep his identity a secret.

Maybe they are saddened by the failure of the Global Warming Gong Show in Cancun and feel the need to accelerate their Greenie Weenie Gaia worship plans by any and all means.

Fools, but not to be trusted. Can't wait till we can clean house at City Hall.

Why is Vision so enamored with what is happening in the US.

Isn't it obvious to them that the US is currently a basket case and any aspirations to emulate some of their wild schemes displays a mental disorder.

Why are they so enamoured of what happens in the US? Perhaps because they get so much of their funding from Americans.

I hope if Christy or Kevin takes the Liberal leadership they'll close loopholes in the local election laws that allow for campaign contributions from foreigners.

I won't respond to the accusation, but rather about the actual program.

Why not? Why shouldn't the city provide incentives to lower homeowners carbon footprint? You don't explain why the private sector is better at it. Someone needs to be doing it, but no one is...

I'm a little shocked that our civic government can setup a program like this, have no tender or concern about keeping the financing at arms length and independent, and then want to keep the financial source confidential?! What the hell happened to open and honest governance?!

since when does a program stay with the house and not the owner? This is a real estate nightmare.

Here's something I've been working on Mike, and JJ I hope this answers your questions.

"Vancouver’s Energy Plan to Include Home Retro"

The Vision Home Energy Retro Plan announced Wednesday is another flawed, poorly thought through initiative. The plan is more smoke and mirrors. And, when the smoke clears the homeowner may be standing in front of his mirror with his house in the background but with a chunk or two missing. Here’s why:

1] BC Hydro’s successful Power Smart programme has already been in place for a number of years [Jeff Lee: “Although governments and energy producers like BC Hydro have been involved in energy retrofit programs from time to time.....”]. Why is it necessary to duplicate this province wide initiative? Why not continue to support it and promote it?

2] The Mayor says: “The City of Vancouver ..... will finance renovations and allow homeowners to pay for them through property taxes”. The City of Vancouver is not a bank. The City should not be getting its fingers into financing home renovations. That’s what banks do.

The last homeowner this Vision Council tried to help, Millennium Developments, are now bankrupt.

My advice to Vision is stick to looking after City of Vancouver business and let the banks and homeowners make their own financial arrangements. The City’s direct involvement is only going to add another layer of bureaucracy and complexity. In addition, when there are, and there will be, any legal disputes between the home owner and the bank, the City will be drawn in as at least a third party, adding legal costs to the City.

3] Deputy City Manager Sadhu Johnston says the programme will be: “be self-financing with no cost to City taxpayers” Don’t count on it. And he says further: “Homeowners .......repay the money with interest calculated to cover administration and financing”. Now, how’s this going to save the homeowner money? Vision is saying the financing will be from Canadian banks. As far as I know banks charge interest and, even if they knock a point off because the City, and, the bank will presumably lend the money as a mortgage attached to the title of the house, the City’s “administration costs” will more than offset any saving. So, why does the City need to insert itself into this tried and true business relationship?

Many homeowners pay their taxes twice a year. If they also repay their loan with two payments per year the interest charges will be horrendously high. This scenario highlights another reason why tying the loan payments to property taxes is bogus, unnecessary and counter productive.

4] I, as a NPA Council candidate, fully support energy conservation by homeowners and renters as well. In my architectural practice I have had considerable energy conservation experience and have been involved in many retrofit and new energy efficient projects. And in the process, having done the calculations I am well aware that the payback for many energy saving solutions such as “weather-stripping and insulation to energy-efficient appliances and thermal hot water systems” often have long payback periods in the range of 7 to 15 years. This is considerably longer than the typical 3 to 5 year bank loan payback period. If the retro loan payback reflects the energy payback period the interest costs will again be horrendously high. Should the City be getting in the middle of these kinds of decisions?

As an architect I have and, as a Councilor I will continue to encourage home owners to do what they can to save energy, not always because it’s cost effective in the short term but, because it increases the comfort level of the home and it’s the right thing to do. But, make your arrangements directly with your bank if financing is necessary. Don’t get bogged down in an unnecessary three way financial arrangement involving the City of Vancouver.

5] What are the details of the "On-Bill Financing Program"? The provincial government should think long and hard as to whether the City of Vancouver needs this added authority and the associated risk. Why hasn’t there been a public discussion about this proposal?

6] Lastly, who is the mystery “private backer”, the six million dollar man? Vision promised “open, transparent government”. This is another example of Vision doing the opposite of what they promised.

-30-

Why not?

Jason, it is not their, the 'City's' job.

Thank you. It is nice to see someone from the NPA that actually has something to say.

Stripped of some pointless rhetoric your position is, I thnk as follows>

1. The city should not get involved in financing of private property, this is better left to the private sector (or other government organs like CMHC).

2. There could be a mismatch between the term of the loan and the payback on the investment, so this is not necessarily a good model in anycase.

3. The city should be doing other things to encouage energy conservation.

Not sure if you are actually saying point 3, but if you are, what is your platform on this topic?

Steven, my critique of this misguided Vision initiative seems clear to me. Your summary is your take but, in my comment there is a more thorough analysis and an attempt on my part to understand the implications and consequences of what was heralded by the Vancouver Sun as being worthy of its front page. Jeff Lee has since blogged about some of his more personal thoughts but, the frustration is that while blogging reaches a certain audience, the MSM audience is far larger. And, many of those readers would not give the article more than a passing thought. However, the entire house of cards collapses on this nit wit notion as soon as capable critical thinking is applied.

As an NPA Council candidate I comment on topics as they arise. From my comments here and elsewhere you can get a pretty clear idea of my values and understanding of the issue at hand. We will have plenty of time over the next 11 months to talk about specific platform topics.

People are missing the point. We know that many energy saving retrofits do have commercially acceptable payback periods. People do not undertake these retrofits for a host of reasons, including a reluctance to spend money on a home a property owner may only be in for a couple of years.
On-bill financing allows a home owner to invest in a property even if they think they may sell next year. The loan will stay with the property and the ultimate beneficiary.
Before the FMHA shut it down in the US the PACE program was tremendously successful in encouraging people to undertake sustainability retrofits, creating jobs, and doing so at no net cost to taxpayers (or to homeowners). See the example of Sonoma County as a great example.
It is silly to say that the City should not do this because this is what banks do. It misses the point of what is fundamentally different about this program - on-bill financing (along with the credible audits and approved contractors).

@ Alphonso:

"The loan will stay with the property and the ultimate beneficiary"

...so to clarify, I 'm buying not just a house, but assuming the previous owner's incurred home improvement debts along with it.

That's sure to help attract future buyers.

where2beforfree-smallbanner
Check out BCWineLover.com!

Paid Advertisement

Paid Advertisement



Close