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HRM’s secret arena contract 

The city of Halifax refuses to publicly release details of its agreement with Nustadia, Inc.

Halifax Regional Municipality has a "black budget"---a secret, off-the-public-books budget, completely off-limits to the citizenry. A black budget is the absolute antithesis to democracy, because without public knowledge of government expenditures there can be no accountability, and without accountability there can be no democracy.

At issue is the new four-pad arena on Hammonds Plains Road. The arena is costing taxpayers $38 million to build, but of course after it opens this fall, there will be ongoing operational costs. At a secret meeting on May 12, 2009, Halifax council approved a secret contract with Nustadia Recreation, Inc., a private company based in Hamilton, Ontario, to operate the new facility.

You now know everything I know about the deal. The terms of the contract? Secret. The dollar amount of the contract? Secret. The length of the contract? Secret.

I've asked for a copy of the HRM-Nustadia contract, but city officials have refused to turn it over. Why? Because, I'm told, a clause in the contract says the contract cannot be made public unless both parties agree to making it public. That clause itself is secret, so you'll have to take City Hall's word for it.

Now starts the interminable Freedom of Information battle. I've filed the official paperwork, paid the required fee and will wait two months for my request to be rejected, at which time I will appeal it, and then the provincial Freedom of Information office will review the request, taking about two years to assess it, I'll line up pro bono lawyers, the city attorney's office will hire some costly consultant...and maybe by the secret expiration date of the secret contract, we might know something.

This matters, hugely. I admit up front that I started this quest for information on the Nustadia contract because I wanted to complain about the city's end-run around the public employee union---clearly, the motivating factor for hiring a private firm rather than using city workers in the arena was that a private firm doesn't have to pay union scale; the city theoretically "saves money" because another couple of hundred workers get paid shit wages. But I'll save that editorial for another day; agree with me or not on the public employee union, but the secret contract raises public policy issues that should concern everyone.

Whatever the secret dollar amount of the Nustadia contract, it's no doubt very large, and runs for a very long time. Figure a 20- or 30-year contract (Nustadia has entered into 30-year contracts with other cities) at, say, anywhere from a half a million to $4 million a year (could be more, could be less, who knows?)---in any event, the contract is likely in the ballpark of a few tens to hundreds of millions of dollars.

A contract of this size gives plenty of opportunity for bribes, kickbacks and other forms of graft that are much easier to prevent when more than a handful of City Hall staffers are looking at them. The entire point of public access and Freedom of Information laws is to establish transparency, legitimacy and confidence in governmental contracting and purchasing---it's therefore in councillors' and staff's own interests to make this information public.

Even if we assume City Hall officials made the wisest choice for city tax dollars---but why should we assume such a thing if we can't see the numbers?---Nustadia has a worrisome track record: the City of Guelph had to come up with $3 million after Nustadia defaulted on a city-guaranteed $10 million loan for Guelph's Sleeman Centre arena complex. Is HRM any better protected with its Nustadia contract? It's not for us to know, evidently. City Hall's response to that question is, basically, "trust us."

We've seen this before: a super-secret contract, details kept from the public, for a significant public facility. The failure of that facility last January left us covered with 100 million litres of raw sewage every day.

The Nustadia contract smells just as bad.

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