For several years, Robert Renger, a citizen-watchdog,  has been raising concerns about  the City of Vancouver's  accounting for the value of the Property Endowment Fund.

It's an issue of monumental importance to the citizens, who are constantly assured that the city's finances are secure, thanks to this $2.5-billion asset.

This evaluation mollifies credit-rating agencies, which influence how much interest the taxpayers must pay on  any city  borrowing.

This has become an even  bigger concern this month after the  B.C. legislature  amended the Vancouver Charter to give the city authority to borrow an unlimited amount of money to complete the billion-dollar Olympic  Village.

Renger has  claimed that the city has "systematically overstated" the value of the  Property Endowment Fund for many years by overvaluing leased lands. He believes that an independent evaluation would reveal this.  

On January 18, Renger wrote another letter to the mayor and council on this topic, copying the city manager, Penny Ballem. Renger urged the city to act "proactively, without delay".

He received a notification from the city that the information has been passed to the mayor and councillors. So far, no member of council has introduced a motion calling for an independent analysis of the value of the Property Endowment Fund.

Renger also tried raising this issue during the recent civic election race, but the two leading mayoral contenders, Gregor Robertson and Peter Ladner, didn't want to touch it.

And Renger still hasn't received a response from Ken Bayne, the general manager of business planning and services, even though Renger raised this issue in correspondence with Bayne last November.

Renger's e-mail to the mayor, council, and the city manager:

From: ROBERT RENGER
Date: Sunday, January 18, 2009 11:01 pm
Subject: Property Endowment Fund overvaluation
To: mayorandcouncil@vancouver.ca,penny.ballem@vancouver.ca
 
To the City Manager, Mayor and Council,  

I want to thank you for becoming transparent and forthright with the public (and especially the City's taxpayers) regarding Olympic Village issues.

Hopefully you will now follow this same approach with respect to the value of the City’s Property Endowment Fund. I am certain that an independent evaluation would find that it is worth significantly less than the $2.7 billion claimed in the City’s Financial Statements.

It seems clear to me that the value of the PEF has been systematically overstated for many years, by the way in which overvalued leased lands (including lands that the City has leased out for long prepaid terms) are included as PEF assets. There are details and examples in the attached documents which I wrote several years ago (and to which I received no substantive responses).  

On November 11, 2008, I sent this same material to Ken Bayne, your General Manager of Business Planning and Services, after I heard him on the radio saying “Vancouver's Property Endowment Fund is still worth two or two and a half billion dollars in real estate”. In my email I asked him the following question:

"Can you tell me how much of the Fund’s $2.5 billion in land assets is land for which the City has sold prepaid leases, and whether or not you think that land’s value as a City asset has been overstated?"

He hasn't answered or even acknowledged my email.

I expect that at some point (even if City Hall tries to ignore the issue) it is going to become publicly evident that:

(1) the City has been greatly overstating the value of PEF land assets, and that

(2) its actual assets are mostly not very liquid.

In the meantime, I am concerned that bad information leads to bad decisions. So I hope you will address this issue proactively, without delay.

I would appreciate being informed of your intentions.

sincerely,
Robert Renger