New provincial conflict-of-interest legislation is forcing a Fort St. John city councillor off the board of his most dear non-profit organization.
Larry Evans will have to resign as a director at the North Peace Historical Society, a position he has held for 20 years, if Fort St. John council is going to be able to make decisions affecting the finances of non-profit organizations anytime soon.
For council to have quorum, four members must be able to discuss issues at any given time. But because only three do not serve on the executive board of a non-profit – Trevor Bolin, Lori Ackerman and Byron Stewart – Evans is considering giving up his post, though not gladly.
“I’m frustrated because I was going along thinking as long as I wasn’t making any money on it, I mean nobody’s benefitting from it except the community of Fort St. John by keeping the museum open,” Evans said. “As are other non-profits, they all benefit the community. If we can help them and not go overboard I think we should. But until there is a ruling on the appeal of this, I don’t think we’ll be settled.”
Evans can still be a member of, and volunteer for, the Historical Society. But the Jan. 11 ruling from the B.C. Court of Appeal argued despite not being paid positions, there were monetary benefits of volunteering for the executive of a non-profit organization that constituted a conflict of interest.
He said Fort St. John city councillors were elected to council because they are community minded and largely have their volunteerism to thank in the first place.
“I love it and that’s why I’m there and I will certainly speak for the Historical Society when it comes to that,” Evans said. “Not if they’re asking for the moon or something, they never would in the first place. People of Fort St. John realize that, they know the museum is an integral part of the community, as is every other board that runs a nonprofit because nonprofit means to us other than what little we give them, they’re on their own out there to stay alive.”
The court said that under the Community Charter, which governs council accountability, conflict of interest provisions were intended to “prevent elected officials from having divided loyalties in deciding how to spend the public’s money.” The court said non-profit directors were obligated to put the interests of the organization first, before those of the taxpayers, the allocation of whose funds were to be decided by council.
The ruling said “by limiting the interest to a personal financial gain, the chambers judge’s interpretation missed an indirect interest, pecuniary in nature, in the fulfillment of the respondents’ fiduciary duty as directors.”
The court argued that it was of no matter whether or not the public money was “put into their (councillors) own pockets,” expenditure of public funds in which councillors had any interest was a conflict.
Fort St. John council intended to discuss permissive tax exemptions for non-profits Monday, but had to adjourn the meeting due inability to establish quorum until Evans had resigned. City Manager Diane Hunter said permissive tax exemptions mostly affect churches; council planned to discuss whether to begin taxing churches, and other spaces that take advantage of taxpayer-funded community services like fire and police, based on how much of the property they actually use for activities that are exempt from taxation, like religious worship.
Hunter said the conflict of interest legislation would leave small communities unable to decide matters of property tax exemption or grant-in-aid funds.
“I would say it’s very much a foundation in what we do. A lot of services are done through non-profits and we’re partners in a lot of activities. I can see this being an ongoing issue.”
Hunter added it may even restrict who is interested in running for City Council next term.
“If people who would otherwise have an interest find they have to step down off the board on other areas that are often for them very passionate, they may choose not to put their name forward and you aren’t able to fill the slate of candidates,” Hunter said.
Hunter said if upheld, the new laws would mean smaller communities than Fort St. John would suffer the most.
“When you think of smaller communities, Fort St. John at 20,000 people, we have the volunteer base to backfill when someone moves out but in the smaller communities, it’s the same 19 people who are doing everything. So for them to lose their key volunteers would be tough, if this holds.
“We’re all under the understanding that this is not the intention of the legislation, which is about getting some pecuniary compensation. Showing up for a meeting, volunteering your time, getting a free cup of coffee isn’t really compensation or consideration.”