Union Bay Improvement District Trustees Jacques and Loxam Must Recuse Themselves Due to Conflict of Interest

The following is what I submitted to Gordon Mason along with the attachments mentioned below.   Couple of errors got by me but the message remains the same.  NOTE:  also sent to Tara Faganello Gov’t of BC, Peter Johnson legal counsel for the Union Bay Improvement District, Scott Fraser our MLA and Bruce Jolliffe Area A Director CVRD.

Mr. Gordon Mason
Chief Administrative Officer
Union Bay Improvement District

RE: UBID Trustee Loxam and Trustee Jacques have a conflict of interest with Kensington Island Properties (“KIP”) and should recuse themselves from discussions and votes concerning KIP

Hello Mr. Mason,

According to bylaw 1-B-04 regarding Conflict of Interest, a written complaint must be made to the Administrator and brought to the attention of the Board at the earliest opportunity. Therefore, I’m submitting this letter to you since I believe UBID Trustees Loxam and Jacques have a conflict of interest with Kensington Island Properties (“KIP”) and should recuse themselves from any discussion or votes concerning KIP as long as they are Board members.

First, I’d like to follow up on my question from the May 18, 2017 monthly meeting of the Union Bay Improvement District – which will be part of the minutes of that meeting – where I ask the Chair during the Q & A period as follows:

“A landowner had asked you [Chair Jacques] about a conflict of interest where you and Trustee Loxam met with Brian McMahon [of KIP] June 7, 2016, [see attachment titled “June 7, 2016 letter from kip”] and she was using Trustee Loxam’s letter [see attachment titled “Dec. 16 minutes revised draft 5.jpg”]  to trustee Elliott about why he felt he wasn’t in a conflict. You responded to her stating: ‘A check of the minutes of the meeting held on June 6, 2016 have failed, as you have pointed out, to come up with any supporting documentation for this letter you refer to.’ [See attachment titled “Jacques response to no evidence”]  Given that [UBID Administrator] Kevin takes wonderful minutes there was nothing you couldn’t find anything in the minutes of that meeting authorizing you and Trustee Loxam to meet with Brian McMahon and negotiate with him. Given that, and that’s an obvious conflict of interest, will you and Trustee Loxam recuse yourselves from having anything to do where Kensington Island Properties is involved?”

Chair Jacques admits there is no evidence supporting the claim that he and Loxam had the authority to negotiate with VP Brian McMahon of KIP in June 2016 – nothing. When asked for proof the Chair responds as follows:

“The proof you have is my testimony and his and we’re not lying okay?”

Shortly afterwards, Trustee Kaljur advises she received correspondence from previous chair Carol Molstad indicating there was no authorization by the Board for Loxam and Jacques to meet with the Developer and negotiate. (See attachment titled “loxam letter to be posted past chair disputes claims.png”).

Please note that Trustees Loxam and Jacques met with McMahon one day after Mr. Mattison, the Facilitator appointed by the Provincial Government, and Kevin Douville, the then Administrator of the Union Bay Improvement District along with KIP VP Brian McMahon reached a Memorandum of Understanding on June 6, 2016. (See attachment titled “16June06 draft bid – KIP MOU”.)   These two Trustees negotiated a preliminary agreement with the V.P. of KIP Brian McMahon without the authority to do so. Brian McMahon/KIP ends his letter to the attention of Loxam and Jacques with the following statement:

“Obviously, there needs to be further discussions but this will serve as the basis of the agreement for which most of it we have discussed for many months.”

As of June 7, 2016, Loxam and Jacques had been trustees for almost 8 weeks so obviously, this matter was being discussed with the Developer prior to June 7, 2016 “for many months” by these two trustees without the remainder of the Board being aware of such meetings.

As a result of the actions taken by Loxam and Jacques of meeting with Mr. McMahon/KIP on their own and Mr. McMahon’s sudden and presumably unexpected decision to pull out of the negotiated Memorandum of Understanding, the remaining three Trustees resigned in July 2016. One of the resigning Trustees Anne Alcock (see attachment titled “Anne Alcock letter of Resignation”) stated in her resignation letter as follows:

“…The community has recently elected two new Trustees to the Board. I feel that these Trustees are acting in the best interests of a developer, and acting apart from the Board, and are therefore in a conflict of interest…”

The discussion regarding my question during the Q & A portion of the May 18, 2017 UBID Meeting lasted over 12 minutes — it was a noteworthy exchange of comments which I trust will be recorded accurately once the Meeting minutes are available. Those comments included the reasoning behind the Chair’s response to my conflict of interest question. Chair Jacques’ explanation of why Trustee Loxam and himself had no conflict of interest with Kensington was because there was no monetary gain. (Emphasis was added by me) Please see attachment titled “January-11-2013-islands-trust” https://islandstrust.files.wordpress.com/2013/01/january-11-2013-islands-trust-news-release.pdf  which is the judges decision on appeal on a similar conflict of interest involving a lawsuit on Salt Spring Island. This judgment outlines the problems when there are “two masters”.

A lesson should be learned by the Salt Spring Island lawsuit. An elected official cannot have “two masters”. Any elected official such as an Improvement District Trustee, should serve and protect the community he/she represents and should never favour another person or company over the community. In the case of the community of Union Bay, it’s essential for a Trustee to serve the community’s interests and not the best interests of any developer.

Further important information is brought forth on Page 18 in the Judgment of the Salt Spring Island case as follows:

“Pecuniary Interest
[49] In several ways in the course of these reasons, I have endeavoured to make the point that so long as the “matter” involves the expenditure of public funds and the respondents have “an interest” in the matter which a well-informed elector would conclude conflicts with their duty as councillors, it makes no difference that they put no money into their own pockets.”

Thus, Trustee Jacques was wrong in his statement that because there was no monetary gain, there was no conflict of interest.

In the spring of 2015, Brian McMahon VP KIP, David Godfrey (KIP’s spokesperson) Glenn Loxam and Peter Jacques spearheaded a petition demanding KIP be given an extension by the Union Bay Improvement District and presented the petition on June 17, 2015, (threatening legal action against each of the then Trustees will legal action if their petition was ignored) a full 6 months after the Agreement had expired. See –https://youtu.be/Xgtpzr66_Fk –The Union Bay Improvement District and the Comox Valley Regional District had publicized the fact the 2011 WIA expired Dec. 31, 2014. The demand for an extension based on the force majeure clause was initiated by Brian McMahon/KIP and followed through by Loxam and Jacques once they became trustees in April 2016.

Trustees Loxam and Jacques campaigned for the April 2016 election by assuring the electorate that if elected they would give KIP an extension to the expired 2011 Water Infrastructure Agreement (“WIA”). Trustees Loxam and Jacques’ promise to the landowners was that KIP would pay for the cost of the temporary water treatment facility located on KIP land leased by UBID.

The views that Loxam/Jacques have expressed have not changed since becoming trustees. Loxam/Jacques seem determined to strike a deal beneficial to KIP as evidenced by their continued support of locating Union Bay’s permanent water treatment facility on KIP’s land with the promise of a deed once the land is subdivided. Loxam/Jacques believe KIP who claims to have offered land to UBID over the years when it is a known fact there has never been any land identified within the KIP development area suitable for our water system as the elevation would be the same as exists now which is lacking pressure. Trustees Loxam and Jacques believe the pressure problem can be solved by using tanks and pumps. (See attachment titled “union bay today part 1”) posted July 18, 2016 which consists of a question to Jacques who responds with the tanks and pumps solution.

Furthermore, Trustee Loxam has shown his bias towards Kensington by publishing a letter in the local papers claiming KIP would pay for infrastructure related to Langley Lake in spite of the fact the Agreement specifically excluded infrastructure. (See attachment titled “loxam guest column”.) Trustee Loxam goes on to state as follows:

“Before I was elected trustee, I followed the discussions and decisions of the former UBID board for 5 years…”

If Loxam had followed the discussions and decisions of the Board for five years he would realize that KIP disappeared and only resurfaced in the fall of 2014 asking for an extension to the Water Infrastructure Agreement. The minutes of the meetings posted on the UBID website confirm the lack of communication on the part of KIP and confirm trustee Loxam repeats the same story line put forth by Brian McMahon VP of Kensington Island Properties. (See audio attachment titled “kips version of June 23 2015 meeting with cvrd”.)

Trustee Loxam attempts to justify his actions in the email sent to Trustee Kaljur believing he understood the intent of the negotiators of the expired 2011 Water Infrastructure Agreement while ignoring the written terms of the expired Agreement. (See attachment titled “Dec-14-minutes revised draft 4.jpg”.) Loxam ends his communication with “I will not reply to anymore requests to this matter.” as though that is a satisfactory response.

Trustee Loxam’s statements from the May 18, 2017 UBID meeting — see https://youtu.be/Sb2Nntir2Ik — are strikingly similar to the statements by VP of KIP Brian McMahon who claims UBID was stonewalling his attempt to meet the Dec. 31, 2014 deadline for the 2011 WIA. In his rambling version of events from June 6, 2016, Loxam claims KIP was advised by UBID to deal only through UBID’s lawyer and that Loxam asked the then Chair Molstad if this was the way to negotiate. This is another example of just repeating the same words used previously by Brian McMahon who has made the very same claim publicly. (See attachment titled “Dec 2015 confidential timeline”.)

On Page 4 of the confidential timeline dated Dec. 2015 written by previous Administrator Douville, it clearly states the following:

“….June 23, 2015: UBID Board Chair and Administrator met with the Developer and his representative, former UBID Trustee David Godfrey, at the Comox Valley Regional District (CVRD) offices with Rural Area “A” Director Bruce Joliffe and GM of Public Affairs Leigh Carter in attendance. Although both UBID and the CVRD reaffirmed their positions the former Water Infrastructure Agreement between the Developer and UBID was expired, the Developer was adamant he did not want a new agreement but rather an extension of the WIA. Given this impasse, the Developer indicated that all future meetings between him and UBID should be with respective legal counsels present.” (Emphasis added by me.)

Trustee Loxam’s statements prove he believes only what the VP of KIP has told him and ignores the documents available to him at the Union Bay Improvement District office from the previous boards. Another example is from the June 2016 UBID Board meeting minutes (see attachment titled “16June15 Board Meeting Minutes”) http://www.union-bay.ca/pdf/16Jun15%20Board%20Meeting%20Minutes%20Package%20%20-%20Signed_opt.pdf when both Loxam and Jacques voted against Bylaw #264, Development and Subdivision Regulation & Standards Bylaw 2016 and voiced their concerns over UBID’s Platinum Edition specifications and the bonding provisions outlined in section 10 indicating a 125% surety to demonstrate that a developer has the financial resources to complete the works or improvements they are applying to undertake. Trustee Loxam insisted Crown Isle didn’t require 125% surety. Their concern was how difficult it would be for a developer; rather than trying to protect Union Bay Improvement District from unfinished projects.

It should be noted the June 15, 2016 meeting took place one week after Loxam and Jacques met with KIP. At the June 15, 2016 UBID meeting, I asked the question (which appears in the minutes on page 5) as follows:

“With respect to the reported offer of land by Kensington Island Properties to UBID raised by Trustee Jacques at last month’s Board meeting, does he see his role on the Board as that of being an agent for the developer?” Answer: “Trustee Jacques referred the question back to the Chair who stated although she could not directly answer the question, UBID continues to work with the provincially appointed facilitator in an effort to reach an agreement on a path forward. However, the Board is not in a position to confirm, deny or report on any potential progress, correspondence, etc. in this regard.”

The most offending action taken by Loxam and Jacques was at the Nov. 13, 2016 Board meeting (see attachment titled “16Nov13 Board Meeting minutes”) http://www.union-bay.ca/pdf/16Nov13%20Board%20Meeting%20Minutes%20Package%20-%20Signed_opt.pdf  where Loxam added a late item to the agenda which was a motion enabling the force majeure clause of the 2011 Water Infrastructure Agreement that expired Dec. 31, 2014. When Trustee Loxam made the motion, the other Trustees were not even provided with a copy of the Agreement which was up for discussion. Trustee Elliott voiced his concerns over bringing such a motion forward and insisted on reading the Agreement to ensure all the Trustees knew what they were voting on. Trustee Elliott asked Trustee Loxam numerous times to amend his motion to ask for legal advice rather than going ahead with a vote and was refused each time. Trustee Elliott also advised that the community could be put in financial jeopardy by approving an Agreement which breached our water license by granting 500 water hookups to KIP when our license allows for a total of 1045 and we presently used 670. This was just one of the flaws in the expired 2011 WIA.

Here is a condensed version of the November 13, 2016 discussion after Trustee Loxam brings forth the motion to enact the force majeure clause in the expired 2011 WIA — see https://youtu.be/hpjHrskUgKo — with Trustees Loxam, Bitten and Jacques claiming the force majeure clause allows KIP to proceed. Trustee Bitten was elected and sworn in at the Committee of the Whole Oct. 27, 2016 and voted to enact the force majeure on Nov. 13, 2016 with exactly 16 days of experience claiming the force majeure clause was in effect. It should be noted none of the five Trustees had any orientation of their UBID position as of Nov. 13, 2016.

Page 4 (Y), (iii) of the Expired Water Infrastructure Agreement — http://www.union-bay.ca/pdf/UBID-KIP%20Water%20Agreement%20Apr%202011.pdf — states “…but excludes any infrastructure related to Langley Lake including without limitation the dam infrastructure at Langley Lake;…” Also, Page 5, 2.3 “…which 1150 residences will include 650 (approximate) existing residences in Union Bay, plus up to 500 new residences within the Lands.”

Three Trustees voted to approve this expired WIA even after being made aware of the glaring violation of our water license which limits Union Bay Improvement District to a total of 1045. This type of recklessness puts landowners at financial risk in the same manner as landowners in Naramata when a developer sued for $5 million dollars because Naramata could not provide the water promised to a developer.

Three Trustees(Jacques/Loxam/Bitten) voted to resurrect the expired 2011 WIA in spite of the plea made by the then Administrator Kevin Douville Nov. 13, 2016 prior to the vote by the Trustees on the motion to enact the force majeure clause resurrecting the expired 2011 WIA on page 9  of the minutes from Nov. 13, 2016 which states:

“The Administrator requested to make a few comments / observations. He noted it was irregular for such a motion to come forward at this time and in this fashion given the Board has not yet had the opportunity to meet and discuss the multitude of moving parts involved with this issue. He further noted UBID had obtained previous legal opinions which indicated the WIA was in fact expired. He also cautioned that this new Board has yet to receive input from Island Health in this regard and that there continues to be a process in place with the provincially-appointed facilitator Jim Mattison which should be respected. Given furthermore the CVRD Board also recently directed on September 16th that a letter be issued to the developers solicitor concerning the draft Memorandum of Understanding between UBID and KIP and the Master Development Agreement between the CVRD and KIP, sufficient time should be provided for the Board to complete all necessary due diligence if a new agreement is desired with the developer.”

Item #10 Questions from the audience should also be noted in the Q & A portion of the Nov 13, 2016:

“Why is UBID enacting the force majeure clause as isn’t the responsibility of the developer to do so and why would the Board be championing of (sic) behalf of the developer?

Chair Jacques answered “the agreement allows for either party to do so.”

This statement by Chair Jacques is false (See attachment titled “16Dec08 UBID Immediate Public Notice”)  from UBID’s counsel P. Johnson which clearly states: “…. the force majeure clause cannot be unilaterally invoked by UBID nor has a claim of force majeure been established,….” and again is an indicator these Trustees were not seeking information from the then Administrator Kevin Douville or the documents and information available to them as Trustees. In my opinion, Mr. Douville resigned as a result of being treated as a clerk instead of the professional he was. Three Trustees refused to listen to his experience and guidance and chose instead to continue accommodating KIP to the detriment of the landowners of Union Bay.

Another example of Trustee Jacques unwavering belief in KIP’s story line is displayed at the 2017 Union Bay Improvement District Annual General Meeting when I asked why the Chair’s Report (see attachment titled “Chairs Report Page 1) stated as follows:

“An original agreement with UBID and Kensington Island Properties appeared to be in limbo at this time.”

When pressed why the Chair and Trustee Loxam believed the agreement to be in limbo when it had in fact expired 18 months previously (on Dec. 31, 2014) and where did they seek legal advice, Chair Jacques responded as follows:

“I didn’t get any legal advice. That was my opinion, okay?”

This opinion of Chair Jacques obviously did not change from April of 2016 through November 13, 2016 as the motion to resurrect the expired 2011 WIA was pushed forward. See — https://youtu.be/ULiMnNI4Rkw — which is a 4 minute video clip of my exchange with Chair Jacques.

It should also be noted the Chair’s Report lacked any mention of the June 7, 2016 negotiating meeting with KIP by Loxam and Jacques and also failed to mention the Nov. 13, 2016 motion to enact the expired 2011 WIA. Why were these omitted?

I believe I have laid out the reasons why Trustees Loxam and Jacques are in a conflict of interest involving VP Brian McMahon of Kensington Island Properties. Loxam’s and Jacques’ actions are evidence they believe the Developer and their opinions are based on the information provided by the Developer and not based on facts and information available to them as Trustees. Representatives’ ignorance is no excuse for their actions.

It is the duty of Trustees Loxam and Jacques as elected representatives to serve and protect the community of Union Bay first and foremost. However, these two Trustees appear to have a more important “master” — that of Kensington Island Properties rather than Union Bay landowners.

My conclusion is that Trustee Loxam and Trustee Jacques must recuse themselves immediately from any and all matters concerning Kensington Island Properties and the Union Bay Improvement District.

Please confirm receipt of this email including the attachments.

Thanking you in advance,

Mary Reynolds
Union Bay landowner.

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