Bella Coola residents received a flyer from the Hagensborg Water District last week on district letterhead encouraging them to join “corporate giant” DubLi Inc. and engage in online shopping.
DubLi’s website describes it as a “shopping and entertainment portal.” According to the site, Dubli receives commissions for purchases members make from merchants in DubLi’s shopping malls. The company claims it then pasess this commission back to its members in the form of “Cashback.”
The flyer claims that the HWD’s partnership with DubLi under the “Angel Program” will provide the district with a “unique source of long-term funding” that will reduce the need to increase taxes and takes advantage of the emerging “E-commerce industry.” The flyer details how to join and encourages residents to sign up family and friends.
HWD Trustee Donald Mikkelson told CMNews that Rosemary Smart had visited the Valley in late September to deliver a presentation on the Angel Program through DubLi Inc.
Smart, who previously held the chief administrator officer position, was recently re-hired in October.
Mikkelson said the board decided to endorse the program before Smart was re-hired.
“I am always looking at different sources of funding and this program costs the HWD nothing,” said Smart. “I presented it to the board and they liked it. The feedback I’ve had about the program has been amazing.”
Under the Angel Program, the HWD offers an “online shopping portal.” Once a customer signs up, a percentage of the purchase value is given to the HWD in the form of a commission. In addition, the person who signed up the HWD also receives a percentage of the customer’s purchases as commission.
Smart said that she is not a member of DubLi, but confirmed in a phone interview that her husband, Jim Smart, is the person who signed up the HWD under DubLi’s Angel Program and therefore will receive a commission each time an individual makes a purchase through the Hagensborg Shopping & Travel Portal.
That percentage is dependent on the purchase the person makes, their membership level and the store, as online stores offer differing rates of cash back.
When questioned on the possible perception of conflict of interest arising from HWD participation in a program that would directly financially benefit the CAO’s husband, Mikkelson stated he did not think it was a conflict because taxpayer dollars are not involved.
“We need to find funding that does not raise taxes,” said Mikkelson. “If it’s not costing the people we are trying to serve, then I don’t see it as a problem.”
Smart also did not see a problem with her husband receiving commissions, comparing it to the same commission he would receive when selling real estate.
“Yes, Jim gets a commission. Why shouldn’t he? He set it up for them and did all the work,” she said. “This program costs the HWD nothing. The shopping portal is not funded with tax dollars. How can you lose?”
June Vosburgh, HWD user and former president of the Bella Coola Fall Fair Association, disagrees.
“Having been president of a few organizations you become familiar with these things,” said Vosburgh. “Yes, I do think this is conflict of interest.”
Bella Coola resident Kevin Booth also believes there is a conflict of interest, saying, “Any time a party acting on behalf of a government engages in activity which directly benefits themselves, family, friends or other associates, they have engaged in a conflict of interest. This seems to be exactly what happened here.”
Although there is no specific legislation dealing with conflict of interest for improvement district trustees and employees, the provincial Community Charter provides rules for local government elected officials that should be considered as a guideline for trustees.
The Improvement District Manual states: “It is important to note that even the appearance of a conflict of interest may cause as many problems as an actual conflict.”
Mikkelson also said the board was not advocating that people don’t shop locally, but rather was trying to appeal to those already buying online.
“This is not taking away from shopping locally,” Smart said. “People have been shopping out of the Valley forever – almost everybody shops out of the Valley and online.”
However, the promotion has riled many local business owners, particularly as the importance of keeping money in the local economy has been recently highlighted.
“The Coast Mountain News last week did an excellent 'buy local' feature,” said business owner John Morton. “For the HWD to follow this up just a day later with a 'buy online’ promotion is amazingly ironic – not to mention a slap in the face to local businesses, of which many owners are ratepayers to the HWD.”
The remaining trustees of the HWD did not respond to CMNews requests for comment. At present, there are four trustees: Chair Ken Dunsworth, Chris Matthews, Donald Mikkelson, and Charles Bryfogle. The fifth, Steven Hodgson had resigned as of Dec. 10.