The Trust is fulfilling its purpose
Columbia Basin Trust responds to the needs of residents of the Columbia Basin
Pared down to its basics, the purpose of Columbia Basin Trust is to do good for the inhabitants of the Columbia Basin. And at the heart of Johnny Strilaeff’s satisfaction with his job as president and CEO of the Trust is the fact that the organization is, in fact, doing a lot of good.
Strilaeff is also the acting president and CEO of Columbia Power Corporation (Columbia Power), the organization that is the Trust’s partner in the recent $991-million purchase of Fortis Inc.’s share of the Waneta Dam expansion facility. The Trust previously owned 16.5 per cent of the facility and Columbia Power owned 32.5 per cent, and on closure of the deal in mid- to late April this year, each will own half of the asset.
“The Trust is responsible for a loan of about $650 million,” Strilaeff said, “and Columbia Power for about $340 million.”
The idea of loans of that size is a little dizzying, but Strilaeff likened it to buying a rental house as an investment. You make sure that your rental income will at least come close to matching your mortgage payments, and once the debt is repaid you own a very nice cash-generating asset.
Strilaeff said that pre-agreement financial analysis showed that the additional annual revenue will more than meet the loan payments. The Trust will immediately realize about $2 million per year more than the debt service costs, and that amount will increase gradually over the 32-year life of the loan to $9 million extra per year. The funds will be used to support projects in the region.
“Once the loan is repaid, though,” Strilaeff said, “our revenue from this investment jumps to about $55 million a year in additional resources to benefit the region. This investment is about our kids and future generations. That matches very well with the mandate of the Trust.”
The Trust and the Treaty
The Trust has no role in the Columbia River Treaty renegotiation. However, the Trust was created as a result of the adverse impacts of the Treaty, and, while it’s not a compensation agency, it benefits the people and areas most affected by the Treaty.
Because it is possible that the renegotiation may result in some changes to how the water flows are managed in the Canadian portion of the system, the Trust has investigated potential financial impacts.
“A couple of years ago,” Strilaeff said, “we brought in engineering experts and hydrologists to determine what the total impact could be to the Trust and Columbia Power if the system were managed to accommodate only the interests of the U.S. That’s the most conservative view, and it’s very difficult to see that happening.
“It’s a complex exercise, and what we found was that the maximum loss (in that case) would be about $4 million per year, shared equally by the Trust and Columbia Power. That’s a lot of money, but it would not fundamentally change how we work with communities to deliver on our mandate. We’ll watch the renegotiations with great interest because of the other significant areas that will be affected—especially the ecosystems.”
Updating the Plan
Written into the law that created Columbia Basin Trust is the requirement for the Trust to develop and follow a Columbia Basin Management Plan. The existing plan will expire in 2020, and Strilaeff is excited about beginning a new series of community engagements to gather information from the people who live in the Columbia Basin.
“We go out to the communities and ask the residents what their priorities are and where they want to see the Trust focus its human and financial resources,” Strilaeff said. “I find that process really inspiring and enjoyable.”
Time to celebrate
The Trust will present its once-in-three-years symposium in 2020. “In 2017 our keynote speaker was Colonel Chris Hadfield, and having set the bar that high, we have a tough act to follow,” Strilaeff said. “We want our 2020 symposium to be an equally inspirational gathering.”
In 2020, Columbia Basin Trust will celebrate its 25th anniversary. Strilaeff revealed that the Trust has commissioned a commemorative book to be written, and the first draft is almost complete. The book will showcase the people who were integral to the creation of the organization, as well as the regional accomplishments that were supported by the Trust since it was founded in 1995.
“I say this tongue-in-cheek,” Strilaeff said with a smile, “but in some respects our board has the easiest job in the world. We don’t have to decide what this organization does—our mandate is set by the people of the Columbia Basin, and it’s our job to execute on it.”