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The A-word

Talk of amalgamation has always been a political hot potato
amalgamation
A hypothetical amalgamated North Vancouver municipal hall.

If you want to raise the temperature of a North Vancouver room by a few degrees, all you need to do is utter the A-word.

Amalgamation - the mythical beast has been sought on the North Shore for almost as long as there has been a strange, snaking boundary carving out the city limits. It's also a word that sends some property owners running to the barricades, ready to fight to keep their taxes down.

There have been a number of studies into a hypothetical reunion of North Vancouver city and district over the years and the movement seems to ramp up once every decade or so - especially during election years. This year, the winds of amalgamation have blown back into town.

The District of North Vancouver council passed a motion from Coun. Doug MacKay-Dunn in February calling for an apolitical committee to be set up to examine potential amalgamation again. Until just this week, there was also to be a slate of proamalgamation candidates on the 2014 city ballot, though Unite North Van party founder George Pringle has now announced he will not run for council or organize a campaign due to poor health.

But there's also a voice calling for the two North Vancouvers to be sewn back together coming from a place where the A-word is considered profanity - within city hall itself.

City Coun. Guy Heywood has made it his final mission while he is on council to bring about amalgamation - or at least a sober study of it. He introduced a motion in March that would see the city join the province in doing a restructuring study - a way of getting a peek at what the finances and governance of a united North Vancouver might look like.

After some emotional debate, most of it trashing the concept, the motion was shelved by council but it is due back in city chambers on June 16.

Almost all involved in the debate this time around agree that any discussion about amalgamation with West Vancouver is a nonstarter.

The History

You would be extremely hard pressed to find a resident on either side of the district/city border who can tell you why there are two North Vancouvers to begin with.

The version documented in The Ambitious City, a history commissioned by the city, does little to sanitize how incorporation came about between 1905 and 1907.

The push to surgically separate the city from the rural municipality it was once a part of came from some men whose names might seem rather familiar.

Arthur Heywood Lonsdale and James Pemberton Fell, owner and land agent for Lonsdale Estate, John Hendry, J.C. Keith and Edward Mahon, shareholders in the North Vancouver Land Improvement Company, as well as Arnold Kealy, former reeve of the district and first mayor of the city.

"Talk about conflict of interest. He negotiated the deal," Heywood recently told the North Shore News.

While there had been some debate about placing the city's boundaries at the Capilano and Seymour rivers, ultimately, the city's borders were largely drawn around the Lonsdale Estate and North Vancouver Land Improvement Company's holdings.

"Their interest, caulked in this ideology or propaganda of building a city, was concentrating the resources of the tax base to support development. To hell with community, geography, society or culture. It was just all about maximizing development," Heywood said.

A newspaper article from the day notes how unusual it is for a smaller municipality to be carved out of a larger one, when most burgeoning cities in the Lower Mainland at the time were growing their boundaries.

Ironically, both Lonsdale and Fell are distant relatives of Heywood, but nonetheless, he's determined to undo their work.

"It was an organization that was built to serve developers and that's what it still does," he said. "Let's rationalize the situation instead of being slavishly adherent to a deal that was done for nefarious purposes."

Apples and Oranges

This section comes with a large caveat.

Finding data to directly compare two local governments is almost impossible as they routinely use different accounting methods, organize their human resources in different ways and source data differently - making for a lack of appropriate context.

Population in 2011 census

City: 48,168

District: 84,412

Average 2014 assessment

City single-family (5,586 units): $902,181

City strata (10,200 units): $436,735

District single-family (20,166 units): $1,018,097

District strata (6,473 units): $456,943

2014 Taxes and fees

City mil rate: $2.38085 per 1,000

District mil rate: $2.44107 per 1,000

City utilities: $361 for water and $275.5 for sewer in single-family homes.

$211.85 for water, and $171.95 for sewer for strata units.

District utilities: $1,473 for single-family, $1,049.30 for strata units.

Finances

City 2014 operating budget: $62.72 million City reserves: $87.3 million and $20.6 million in DCC s for parks

City capital debt: none Full-time equivalent staff: Data not available.

District 2014 operating budget: $110.9 million

Capital reserves $61.1 million Capital debt outstanding: $20.8 million

Full-time equivalent staff: 551

Nuts and Bolts

Under the Community Charter there is only one way for municipalities to amalgamate (and neither Heywood's nor MacKay-Dunn's motions are enough to trigger the process alone).

Both councils must pass a motion stating that they are ready to participate in a restructuring process that begins with a highly detailed study into the municipalities as they are now, and as they could be when amalgamated.

That includes tax rates and levies in each jurisdiction, what services are delivered and at what level and cost. The study would also examine the state of infrastructure, when it will need replacement, what debts are outstanding and what plans are in place to pay for replacement.

The restructuring study also looks at governance including the structure of current and future councils, implications for the municipalities' role in regional government and the ramifications for already existing obligations with contracts.

Once the restructuring studies are complete, the respective councils would seek public input on whether amalgamation is still a worthy goal. If both decide that it is, they can negotiate on an implementation plan and vote to hold a restructuring referendum, in which a simple majority of voters in both jurisdictions must vote in favour. Only then will the province bring the legislation to dissolve the old municipalities and issue the letters patent for the new one.

The province will put up $50,000 to fund the study.

The charter specifically forbids the province from forcing amalgamation on unwilling local governments.

The Case For

Heywood's conversion to the cause stems from his belief that the long-held assumption a united North Vancouver would only serve district taxpayers may not be valid any more.

With a background in banking, Heywood has been recrunching the numbers and he argues there's more financial potential in the district's single-family homes as a tax base compared to the city's condos - which make up 85 per cent of the city's housing stock.

"Single-family residences in real estate hold their value a lot better than condominium towers because there seems to be an endless supply of (condos)," he said.

Taking a 100-year view, Heywood said both governments need to act now to stop the two municipalities from diverging away any further.

"If we let that line persist, we're going to let those rich people above the highway continue to isolate themselves from the social costs of a growing community and they will float off and become like West Vancouver and the city is going to have to keep raising its mil rate and taxing assessed value of property ever higher in order to be able to afford a new Harry Jerome (Recreation Centre), or a new North Shore Neighbourhood House."

Heywood doesn't subscribe to the myth that eliminating one of the local governments will suddenly mean half the civil servants can be laid off and residents can look forward to a juicy tax break. His vision is a little more subtle.

"There will be no year-over-year reduction in costs. It's just avoided costs by managing growth, by redeploying existing resources instead of having to grow two separate bureaucracies," he said.

Over time, the savings could be directed to building badly needed capital projects like replacements for Harry Jerome and North Shore Neighbourhood House, both of which he notes are heavily used by district residents. City council is rapidly losing

the political will to fund a rebuild of Harry Jerome, either through taxes, density or reserves, Heywood said.

"There's a lot of overhead where the money could either be put back in the taxpayers' pocket or into something that actually created value in the community. That's an out and out win and that's worth doing," he said.

Heywood concedes the amount district residents fork over each year is ultimately higher, thanks in large part to the cost of utilities that are spread out over a much larger, less efficient area.

"Their utilities are more expensive because of the lack of density. Well, who says in a restructuring that we'd be paying their utility costs?" he said.

Though he is known to be a strong voice for fiscal conservatism at the council table, Heywood's argument also stems from the frustration of trying to help lead a community where arbitrary borders are stumbling blocks to progress.

"I've been trying to be a good soldier through the whole first term but it's so frustrating being the Timbit inside the district doughnut because every social institution and cultural institution crosses boundaries and has to deal with two different governments that have different agendas," he said.

"When it comes to important things, there is no real difference between the city and district. We've got all these workarounds but the workarounds come with a price and the price is we're not building Harry Jerome, or North Shore Neighbourhood House or Silver Harbour - all these other vital community facilities."

The Case Against

There's no one happier to argue the con side of the amalgamation debate than city Mayor Darrell Mussatto and the first thing he'll mention is the cost.

After a series of provincially forced amalgamations in Halifax, Toronto, Calgary and Ottawa, there are plenty of case studies to show amalgamation is akin to throwing money on a bonfire, according to Patrick Smith, Simon Fraser University political science professor.

"That's true and there are a bunch of studies that have proved that. When (former Ontario premier) Mike Harris did his, it was sold on the notion it would make savings. When Halifax was done, it was on the same premise - that it would save money," Smith said. "There's no evidence from any of the studies five or 10 years out that it saved anybody any money. Most of the evidence is it actually cost more. There was kind of a race to the top rather than a race to the bottom."

The reason for this, both Smith and Mussatto agree, is because of the tendency for services and salaries in amalgamated municipalities to come up to match whichever previous government had the higher end ones.

But, Smith added, he has at least one colleague who is now arguing that amalgamations might still pay off, just over a longer period of time.

There's also the murky swamp that is infrastructure liabilities, which is a fancy way of saying roads and buildings that are falling apart. Of particular concern for Mussatto is the district's many kilometres of underground concrete asbestos water mains that have more cracks than a chiropractor's clinic. The district has a $4-million per year plan to replace the aged pipes - a job that is expected to cost about $70 million.

An amalgamated North Vancouver would also make it harder for residents to get a council member on their phone whether it's to give them an earful or ask for more speed bumps, Mussatto said.

"When you get bigger, you can't do that. It gets more bureaucratic. I think we've got a council that's very approachable and very accessible. The bigger you get, the less access you're going to have with your politicians," he said.

Amalgamations also have a habit of drastically shifting the political landscape, which could be good or bad, depending on who you like to have in government.

Shortly after he was first elected, a 2010 editorial from the National Post called Rob Ford "Mike Harris's gift to Toronto," as it was the votes of the surrounding suburbs that put him into the mayor's chair. Today, it's not clear if Harris has been properly thanked for the gift.

And, while he applauds district council for the dense, walkable neighbourhoods it has planned for Seylynn, Lynn Valley and Lower Capilano, Mussatto said a united North Vancouver would result in a political push from the sprawl areas of the North Shore to concentrate more highrises on the Lonsdale corridor - something Mussatto said his council is working hard to do carefully and in accordance with best practices in urbanism.

Instead, Mussatto said he'll continue to push for more collaboration between the two municipal halls, as they already do with the RC MP, North Vancouver Recreation Commission, arts and culture funding, North Shore Emergency Management Office and city and district fire departments.

But Mussatto said he can't support Heywood's motion for the restructuring study, even if it does point to new ways to cooperate, because $50,000 in provincial funding isn't nearly enough to look at the subject in any meaningful way, noting that a small army of accountants will be needed as part of the initial cost.

Parting advice

The last time two B.C. municipalities amalgamated was when the District of Matsqui and District of Abbotsford joined in 1995 to become the City of Abbotsford. Today, Mayor Bruce Banman stresses that every potential amalgamation is going to be different, depending on fiscal and legal realities of the communities involved, and more importantly, the way residents actually identify with the place they call home.

While Abbotsford too saw taxes go up afterwards, Banman noted that almost every other municipality did as well, thanks to the "slow but sure downloading" from the province and federal government.

Amalgamation still has benefits outside of finances, he added.

"If you take a look at tax rates, we've all seen increases in tax rates and I don't know whether it's necessarily fair to say it's due to amalgamation. There are always going to be some expenses and there are going to be some savings. I think overall in Abbotsford's case, it's going to allow us better long-term planning," he said.

As to whether the North Vans should be looking to get hitched: "I wish them well," Banman said with a laugh, "but I think it's one of those things where you need to do a fair amount of homework and try to keep the emotions aside and think about it logically. You really have to have a good business plan."

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