April 7/04 Report
9:30 am - 1:20 pm

Present: Ferguson, Pearson, Bruckler, Powers, Collins (absent - Braden)

Also Present (for periods of time):   Mitchell, DiIanni, Horvath, Whitehead, Jackson

No changes to the agenda

Minutes approved  

Powers had submitted a page of questions for staff re item 8.8 - Connect Hamilton - Create Community Project (CHCC) Vendor Selection and was told that answers would be ready by 1:00 p.m..

Delegations Request:  All approved

Lorne Lieberman's Presentation
Speaking on behalf of the Creative Arts Incorporated (Festival of Friends), he was requesting an interest-free loan of $ 500,000 payable in 10 years from the City of Hamilton to be used toward the acquisition and preservation of the Tivoli theatre.  He explained that they are in the process of attempting to purchase the building from the Snidermans, who have reduced the price considerably because of structural problems, and the deal could close on April 16.  The next phase will be renovation and restoration work which will keep the theatre viable.  All roofs, heating and cooling systems need repair, and while they have some corporate and foundation support, it is not enough.  They are in a position to request money from provincial and federal funders such as Trillium and Can Arts, however this can be a 6 - 18 month process, and they can't wait this long to make repairs.  He stated that the Tivoli has helped business on James North, has been an important player in downtown revitalization and a cultural enhancer.  They have shown movies, plays and musicals, have had hundreds of thousands of patrons and been featured in Time and Variety magazines.  Councillors were shown blueprints of inside restoration drawn up by the people who did the Pantages Theatre in Toronto.

Collins:  What are the timelines? 

Lieberman:  We can't make it through another winter.

Collins:  I'm sympathetic..it's a majestic building..recommended that staff come back with a report..Could Future Fund money be used?.. cannot come out of capital funds.

Bruckler:   (to staff) Have we provided similar loans to other organizations? 

Rinaldo:  Tivoli got heritage grant a few years ago

Bruckler:  Are those loans secured?

Rinaldo:  Most weren't.

Bruckler:  Wouldn't it be eligible for $$ rom downtown renewal?

Lieberman:  We're already tax exempt.

Horwath: not in BIA, so facade programme not available

DiIanni:  complicated issue..deserving of staff coming back with options

Powers:   Is staff hearing about this for the first time?..seems to be a sense of urgency about it..What's a reasonable turnaround for the report?

Horwath:  need to look at this..a heritage value property..if we're moving in a cultural direction, this is a key player.."We need to support and grow creative projects in the city."

Moved by Collins and seconded by DiIanni that staff prepare a report.  All in favour.  Rinaldo said that it would take a month or two, and Lieberman replied that they would go ahead and close the deal.

Consent Items 5.1 (2004 Monthly Payments to the Royal Botanical Gardens) and 5.2 (Monthly Status Report of Tenders and Requests for Proposals for February 2004):  approved with no discussion           

Public Delegations: (6.1)

Mr. David Braley, president and owner of Orlick Industries, made a "short and sweet" (his words) presentation to the committee proposing that they consider his offer to operate HECFI in a private/public partnership with the City.  He outlined his track record as a successful businessman, owner of the B.C. Lions and past owner of  the Hamilton Tiger-Cats, chairman of the 2003 Cycling Championships and former chair of HECFI, and stated as his motivation a) his desire to give back to the community b) his belief that there is a significant opportunity to increase HECFI'S assets c) that this would be a catalyst for downtown renewal with benefits that would flow down to the community and d) it could establish Hamilton as the regional centre of the arts.  His plan would see  the City being responsible for capital costs and committing to annual funding levels.  Profits would be split 50/50 or according to a definitive proposal.  As next steps in this process he would need to review the financial situation and employee contracts, and the City would be asked to set up a task force to discuss the terms of agreement.  He also said that he would be submitting an RFP to operate the city's water and wastewater system, and that he would be interested in taking over  or buying municipal golf courses if the city decided to privatize them. 

Powers:  Is there a process that would allow us to respond to this?

Ferguson:  already in discussion with Mr. Rodier re Copps Coliseum and with others over the golf courses..need a clearing house and task force

Pearson:  great to see people with the passion to see us succeed..staff needs to set guidelines for us

Collins:  an RFP or EOI?..what would staff prefer?

Rinaldo:  several options are possible

Collins:  what are the timelines?..1 or 2 cycles? ( didn't pick up answer from Rinaldo)

Ferguson:  should go to Strategic Planning and Budgets for all these initiatives

Whitehead:  agree that there are a number of interests..we need a place for all of them to come together, to see the general direction we're going...what is the required process?

Bruckler:  great to see interest and passion of Braley..support moving this forward

Kelly:  we have the opportunity and responsibility to explore a number of possible scenarios to help us out of "the red ink we're swimming in right now"..might have to set up a special committee apart from the SPand B..will anticipate a staff report with pros and cons..how do we exchange information..we're doing it with Rodier, should we do this with Braley?

Braley:  would like to start to do due diligence regarding finances and this would be confidential..Rodier has discussed his ideas..whatevere you decide is O.K. with me..you've got to get the enthusiasm going

Ferguson:  the players are all here..KPMG, David Adames (Tourism Hamilton), Mr. Rodier, the HECFI people

DiIanni:  we need to move this to discussion with staff, and committee you echo and support discussion and getting back to Braley?

Collins:  move that staff immediately prepares report for Strategic Planning and Budget committee that looks at private/public ownership  (Bruckler seconded and all were in favour)

7.1.1 KPMG Final Report on HECFI

Paula Bund from KPMG spoke acknowledging Braley and his visions, and remarked that the Operation and Governance Review and Implementation Strategy undertaken by KPMG has been a great project.  She advised the committee to stop and think a little bit further about the mandate and governance structure of HECFI, to clarify what their options are, and decide how best to go forward.  There is a very detailed report included in the agenda, but some of the key points stated in the review summary are as follows:

a) The City of Hamilton is at a crossroads regarding the operations and governance functions of HECFI.

b) The status quo may not be sustainable.

c) Operationally, the facilities appear to be well managed and maintained, however looming issues need to be addressed.

d) An assessment needs to be done on the impact of continued deferral of capital expenditures on both HECFI'S competitiveness and the state of good repair of its assets.

e) A method for full cost accounting of HECFI needs to be developed and implemented.

f) Booking priorities don't exist.  Events need to be prioritized and policies need to be established consistent with HECFI's mandate.

g) Methods for measuring the community return on the city's investment in HECFI need to be honed and evaluated on a regular basis.

h) Lack of focus on strategic directions is due to the poorly defined roles and responsibilities of the board and between board members and staff, and the limited focus of the city's approach to board selection.

i) There are a lack of processes for monitoring performance against key goals.

The consensus was that HECFI's mandate is to focus on economic benefits but not at the expense of community benefits.  An independent board with clear accountability and responsibilities is recommended.  The board should be reduced to the mayor (or his designate), the chair of the economic development standing committee and six citizens-at-large.  Council would appoint the standing committee chair and the mayor's designate.  A new HECFI board would be appointed.  In its first term an interim nominating committee representing the shareholder and the key stakeholders should select citizen members.  A professional executive search firm should facilitate the process.  The review also suggested the development of a skills matrix to select board members.

Collins:  the bigger issue in the community is the deficit..what benefits re operating costs, budgets do we get through your recommendations?

Bund:  you need to understand mandate and governance..new board would look at those options with you (capital expenditures and savings)..if you come to a good understanding, parameters will be much more effective

Collins:  hearing that we need a change of the board..does it mean they don't have the skill sets? (Answer - they haven't had a clear mandate to go forward)

Collins:  what is cost of process going forward, hiring a headhunter etc.?..what will HECFI pay?...what will city pay?

DiIanni: (commenting on statement by Fred Deys, chair of HECFI, about seeing a surplus (not sure of $$) in the last 8 months) great turnaround..some interesting comments in report..(to Paula) you heard Braley..any advice?

Bund:  decide first on mandate and governance

DiIanni:  decide on this, then other pieces fall into place..glad you made a point of not criticizing the present board..going into selection, you have to be more strategic about who's invited, you have to know what you're looking for

Bund:  that and they're clear what their mandate is

DiIanni:   Hamilton Utilities goes through this process

Bruckler:  glad to see that HECFI is a good operation, but we need to bring more clarity to its mandate..and independent corporation would allow more flexibility

Bund:  report gives framework to consider all options, and people on board will look at all of these

Bruckler:  you're recommending an independent operation? (Answer- think that's the best option)

Whitehead:  sounds like we'll create an exclusive club of board members (my concern is we're going down the wrong road like Hydro)..if we're suggesting current model doesn't work, what are the skill sets we're looking for?..we have to be very sensitive as we go down this road..if we move the other way, it could become more business-like..I will not support exclusive programme for process..when were you authorized to do this report? (through clerk)

Rinaldo:  Paula contacted us regarding the extra work, but wouldn't proceed until after authorization

Whitehead: Was the Implementation work completed before the authorization report?..When were you contacted? when completed? when did voucher come forth? 

KPMG spokeswoman (not sure of name):  got ready before purchase order approved, but couldn't work on it until purchase order complete

Whitehead:  I was told otherwise..I'm going to pursue this (he continued to speak at length to the KPMG group out in the hall later)

Collins:  I have concerns about how the Hydro Board was selected..uncomfortable with process that looks for headhunters to fill board..proof will be in the pudding..exclusive rather than good mix of men and women, large and small business, union, social services etc. ..should have drive and passion..we're shareholders of Hydro, but no input to who's on board..I haven't heard about money we're going to save

(At this point David Adames, Tourism Hamilton, explained their selection process)

Bruckler moved that this report be received and referred to the Strategic Planning and Budget committee as part of their deliberation on implementation strategy.  Missed who seconded it.  All approved.

7.1.3  Overview of KPMG's Experience with Public/Private Partnerships

Will Lipson began his presentation, but at this point Powers was out of the room, and Ferguson had relinquished the chair to Bruckler.  They had lost quorum.  At this point Mitchell was rather perturbed and commented, "This is an important issue.  Could we take a break until we get more councillors back?  This is somewhat embarrassing!"  Once the two missing committee members returned, Powers stated..this is a problem..we might create a new governance model, but we've given direction to explore other options, whereupon Whitehead replied, "I thought we covered this off."

Mr. Lipson continued with his presentation (which can be viewed in detail in the agenda).  It was moved by Collins and seconded by Pearson that the report be accepted.  All in favour.

CATCH reporter was unable to cover items 8.1 (Year-End Receivable Write-Offs), 8.2 (2003 Benefit Surplus)., 8.3 (2004 Conservation Authority Apportionment Formula and Approval Dates), 8.4 ( Establishment of a Stabilization Reserve for Ontario Works Caseload Fluctuations and Prior Year Subsidy Adjustments),  8.5 (Provincial Consultation on Ontarians with Disabilities Act) and 8.8 (Connect Hamilton - Create Community Project - Vendor Selection).

8.6 (Award of Desktop and Notebook Computer Supply RFP) was approved.

8.7 (Print Rationalization and Implementation) was approved.

Motions: Powers moved and Pearson seconded that $ 2,000.00 be given to fund the 60th anniversary of D-Day.  All in favour.

Item 10.1 (Succession Planning - Acting General Managers) became a motion rather than a notice of motion (Collins, Pearson).  Collins:  It's hard to determine, especially during the summer months, who exactly is the acting G.M...can staff come back with a schedule to show who's in charge when there are absences?..I don't think that the current system works at all times of the year

Peace:  not needed as a motion..We'll take it as staff direction and we'll bring back a report

Powers:  we need a template

This was all that the CATCH reporter could cover.