Where is the money?
It’s a question members of the Mack Laing Heritage Society are asking the Town of Comox, regarding the trust fund.
According to independent, third-party calculations, the trust fund bequeathed to the Town by the late Mack Laing is at least $120,000 short of where it should be, and possibly as much as $325,000 shy of where it should be, under proper management.
In the last will of Harold Mack Laing, dated May 6, 1981, the Town of Comox was bequeathed the majority of the belongings within the Laing homestead – Shakesides – including nature drawings and photographs, to be used “… in the natural history museum on my former home property…”
(The package of waterfront land and the homestead known as Shakesides had been gifted to the Town, by Laing, in a separate deal, a few years earlier.)
The Town was also bequeathed a total of $45,000, with specific instructions: “twenty-five (25%) per cent of the cash realized to be used for capital improvements to the dwelling house, and the remaining seventy-five (75%) per cent to be invested by the Town, the income earned thereupon to be applied towards the annual operating expenses of a natural history museum.”
According to figures released by the Town of Comox, the trust fund – containing 100 per cent of the bequeathed money – has matured by nearly 63 per cent in the past 15 years, from $48,047.05 on Dec. 31, 2000, to $76,672.49 at the end of 2015.
The trust is in a Municipal Finance Authority of BC Bond Fund.
Considering the repressed market and consistently low interest rates since the turn of the century, a 63 per cent return on investment during that time is explainable.
What the MLHS wants explained is how the trust fund managed to increase by only $3,047.05 in the 18 years previous.
From 1982 to 2000, the Bank of Canada rate ranged anywhere between 13.96 per cent (April 1982) and 3.52 per cent (April, 1997).
Based strictly on the Bank of Canada rate for the years in question, and applying compounded interest only to the 75 per cent of the fund that was specified for the operating expenses of a museum that was never built, the trust fund should have been sitting at $144,000 by the turn of the century.
That would make the trust fund worth $233,000 today. And that’s just from the portion of the trust fund that should have never been used, considering the stipulations.
Add to that the $118,250 earned by the Town in rental fees from 1982 to 2013, compounded, and that number escalates to $414, 429.
According to Town of Comox documents, the entire bequeathed amount was put into a trust fund.
However, also, according to the Town’s own documentation, the trust fund stayed stagnant at an even $47,000 from 1993 to 1999.
The Bank of Canada rate during those years hovered between 3.52 per cent and 7.31 per cent – with only three of those years being below the five per cent mark (again, based on stats for the month of April every year).
It is impossible for an interest-bearing fund of any sort to remain completely stagnant for seven years in any active market.
(Scroll to bottom of article to view all documentation referred to herein, including Mack Laing’s will.)
Old friend taking a stance
Gordon Olsen, a former director with the Mack Laing Heritage Society, hired an outside accounting firm (Moeller Matthews of Campbell River) to provide calculations on where the trust fund should be, financially speaking.
Olsen, whom Mack Laing befriended as a youngster, said he owes it to his old friend to investigate the management of the trust fund.
“When the February 15, 2015 council decision to tear both buildings down (Shakesides and Baybrook) came across, it prompted me to decide to step aside from MLHS and enter into this legal situation,” he said. “The driving force was, if I did nothing, and the place went down, I couldn’t live with that. I’d live with that dissatisfaction of my inaction for the rest of my life. So I chose to do something, and I am fully aware of the financial risk, but at least I am trying.”
Comox Mayor Paul Ives does not dispute the lack of growth in the fund in its early stages, but could not speak on behalf of the council in charge, two decades ago.
“What happened in the ’90s – why they didn’t do anything with that; I don’t think it was ever separately invested into any kind of portfolio or fund, or anything – I don’t know. That was then, and this is now,” he said.
The question becomes whether the current government of the day is responsible for the fiscal mismanagement (real, or perceived) of funds incurred by a previous government.
Ives, as a lawyer, answered the question hypothetically.
“Hypothetical? I suppose anyone who wants to advance that claim is certainly free to advance it. If that was to happen, I suppose what would happen is council would have to make a decision that this matter is being contested… and they would probably direct staff to pay that money into court and let the courts figure it out.
“As far as liability is concerned, to be honest with you, I have not researched it – I am not the Town’s lawyer – but if we need legal advice at that point, we would get legal advice from our lawyers out of Vancouver.”
While Ives acknowledged the court route is an available option for the MLHS, he pointed out that it wouldn’t take long for the entire trust fund to be dissipated in legal fees.
“Some people might think there should be a lot more money there, and I say, ‘well, that’s nice that you think that should be the case, but that’s not the case.’ We don’t have a spare $700,000 to apply towards that. We put every penny of our taxpayers’ money into infrastructure, etc. So if you want to fight about that issue, by all means go right ahead, but at the end of the day, it will likely just diminish whatever is left. I’d rather, personally, see that money go towards something that can be applied within the wishes of the will, hopefully towards an additional recognition of Mack Laing.”
Ives says the Town has done its best to respect Laing’s legacy and he takes exception to some of the tactics used by Mack Laing Heritage Society members.
“We have the park we have maintained for a number of years, but (the MLHS) is making allegations that we have somehow neglected things and I don’t agree with that. But it’s unfortunate, because we have put a lot of time and effort with other organizations, like the Brooklyn Streamkeepers, into managing and enhancing the Brooklyn Creek, the Mack Laing Park, essentially trying to maintain its natural splendour…. We have done nothing but try to enhance that park and add to it, and to restore Brooklyn Creek to its previous condition, as a salmon-bearing stream. And for people to kind of rake us over the coals for either neglecting this house, or that house, I guess that’s fair comment on their part, but really, what point does it serve?
“Really what are we trying to do here? Are we trying to save some old houses, albeit with some heritage value I suppose… Mack Laing, as one of the leading environmentalists at the time, it would be interesting to hear what he would have to say. I imagine he would probably prefer us putting money into parks and the surrounding parks, rather than putting it into old structures.”