Call for public inquiry into Future Fund operations
August 7, 2006

The procedures of city council with respect to the Hamilton Future Fund have generated controvery before, but now Hamilton Artists Inc (HAI) is calling for "a public inquiry into the management of the Future Fund and its absence of communication and consultation with the public". The 30-year-old group is questioning the fairness of a Future Fund decision to provide Mohawk College with $2.15 million, and demanding that their own rejected request for $1.5 million be reconsidered.

HAI has asked to speak at council's Wednesday morning committee of the whole meeting, and is urging artists to attend. In a media release issued on Friday, the group reviewed some of the history and promises of the Future Fund, pointing to the assurance given in 2002 that $37 million would be spent on community legacy projects that foster the economic, social and cultural life of the city.

"Of the $37,000,000, all but $3,000,000 has been spent without any public application process or consultation," notes the media release. "The application process in the spring of 2006 was the first public application process."

The fund came into being as a result of the corporatization of Hamilton Hydro that created the Hamilton Utilities Corporation as a wholly-owned subsidiary of the city. The transformation included a requirement that the new company pay $137 million to the city for hydro's assets - much of which was borrowed and is now being repaid by hydro customers.

The monies were used to establish the Hamilton Future Fund, and a plan was adopted to spend $37 million over five years and set aside the remaining $100 million as a trust fund whose interest earnings would allow for ongoing grants for community projects. The city has subsequently arranged to borrow the $100 million for capital spending on waste management, the Red Hill Expressway and other projects. The loan is to be repaid to the fund with interest.

HAI's request for funding to purchase the building it currently rents was one of sixteen applications considered in mid-July by the Future Fund board. HAI says the grant would provide "increased gallery space, community meeting spaces, subsidized store front rentals for developing cultural activities and the city's first artist subsidized housing."

The board rejected the request and several others, but decided to support proposals worth $3.9 million, plus loans of $1.9 million despite being told by city council to limit its spending to $3 million. The largest recommended grant is the one to Mohawk for upgrades to its Stoney Creek campus.

HAI's media release suggests this decision is problematic, noting that "an article about the Mohawk College proposal has been on the City's website since late June 2006, a full six weeks before Council is to vote on it, raising doubts about the transparency of the proposal process."

Controversy about its operations is not new to the Future Fund. In the fall of 2004, its board members charged that city council borrowed $15 million from the fund without approval. Mayor Di Ianni, who also sits on the fund's board - along with Bill Kelly, Chad Collins and Murray Ferguson - acknowledged this, and noted that council had previously decided to use the fund's interest in a similar manner.

"We did that last year without even going through officially the board of governors", the mayor noted. "Unlike last year, we've actually engaged the board in discussion [about the $15 million loan]."

Then in February of 2005, board member Bill Mason charged that "the direction that council has . taken for use of the funds seriously compromises the original concept and challenges the spirit and position and principles recommended by the panel" that recommended the establishment of the fund.

With respect to loaning the city the $100 million, Mason suggested the board should consider folding up. "[T]here may be no necessity for the current board of governors because city council is ultimately the de facto board of governors, when all is said and done."

In the same meeting, Board chair Tom Weisz summarized the history of the Fund and admitted there were "some communication gaps in terms of what happened to the $37 million, in terms of how it was spent or whether things were added to it or not". One of those gaps was an apparent failure on the part of city staff to provide the Future Fund board with financial reports on the actual spending on approved projects.

Around that time, the board established a sub-committee to clarify the rules of operation - a subject of discussion that dominated the subsequent meeting where one of the fund members noted that "the community is starting to find out what the rules are", and another said that they had never seen an application form for the fund that was apparently being used by city staff.

CATCH reports on the February and March 2005 meetings of the Future Fund board can be found at http://www.hamiltoncatch.org/others/other_050211.htm and http://www.hamiltoncatch.org/others/other_050321.htm.

Hamilton Artists Inc is a non-profit charitable organization that was founded in 1975 as an artist's co-operative. It receives funding from the Canada Council, the Ontario Arts Council and the city and has a website at http://www.hamiltonartistsinc.on.ca/intro.shtml.

The Future Fund current funding recommendations can be viewed at http://www.myhamilton.ca/NR/rdonlyres/2059DE60-4C55-4A0D-AE24-
DE9A5A0E6165/0/Aug09FutureFundReport06003.pdf.