YMCA – Not All Good Causes Are Affordable

The question is not whether it is a good cause, but whether it is a good cause that is affordable and justified.

There are good reasons why the City of Abbotsford may wish to extricate itself from the Memorandum of Understanding (“MOU”) that was signed with the YMCA on February 28, 2011. The underlying assumptions that were used when the City approached the YMCA included growth projections that are questionable. Moreover, given the cost of this project, and the City lacking meaningful reserve monies to fund it, common sense would dictate that this project likely needs to be delayed.

Both the City of Abbotsford and the YMCA agree that the signed Memorandum of Understanding (“MOU”, dated February 28, 2011, is what it says it is, a memorandum of understanding. It is NOT a legally binding contract. There are a number of essential elements normally found in legally binding documents that are missing in this Memorandum.

In addition, the Memorandum does not provide much in the way of definitive “understanding”. For instance, the MOU doesn’t state with any certainty what is being built, how it is being built, where it is being built, and who is providing the funding for what is being built, nor is there a set closing or completion date by which the legally binding in definitive agreement must be signed (merely an “anticipation” that a facility would open in 2016).

Even if the MOU was drafted in such a way as to make it binding upon the parties, it is questionable whether the City has the legal authority to gift $17.5 million to the YMCA, representing 50% of the capital cost of the facility contemplated. This would seem to be the City potentially providing impermissible “assistance” to the YMCA.

I am no lawyer, but section 181 and 185 of the Local Government Act seems to define what “assistance” means; “providing a grant, benefit, advantage or other form of assistance, including:

1. an exemption from a tax, fee or charge
2. (a) disposing of land or improvements, or any interest or right in or with respect to them, for less than market value;
(b) lending money;
(c) guaranteeing repayment of borrowing or providing security for borrowing;
(d) assistance under a partnering agreement

The Memorandum of Understanding does not clarify how legal restrictions against providing “assistance” can be complied with. If the proposed assistance to the YMCA is legally sustainable, consider that:

  1. The City does not have the money to give to the YMCA. The anticipated plan to come up with $17.5 million by 2015/2016, is to defer, eliminate or reprioritize other capital works in each of the next 4 years. It will become a question of priority and need. This leads to the second issue.
  2. The case for another indoor pool has not been made. Abbotsford’s current pool to population ratio (1,000’s) is about the same as the two Langleys and Coquitlams. Surrey and Kelowna have almost half the pools per population of Abbotsford. With another pool in Abbotsford, our pools to population ratio would be higher than Surrey, the two Langleys, Coquitlam and Kelowna.
  3. When there is a real demonstrated need for another pool in Abbotsford, it might well be advisable to invest in a 50 m pool, not what is being proposed in the MOU.

Most of us would like to support good organizations that do good work, including the YMCA. But in this time of fiscal constraints we must exercise good judgment, especially when spending money we don’t have. So it is not a question of whether it is good cause, but is it a good cause we can afford and justify to future generations of taxpayers?