August 11, 2004 Report – Part 4
9:30 am (9:37 am)

(Continued from Part 3 that ended at Item 8.12 "My Speedway Festival")

9. REPORTS BY ADVISORY/SUB-COMMITTEES

9.1 Review of Specialized Transit Policies, Practices and Procedures Impacting Upon the Quality of Services for Persons with Disabilities ( CL04010) (City Wide)
(http://www.hamilton.ca/Clerk/
agendas-minutes-reports/
committee-of-the- whole/2004/Aug11/
CL04010_%20Review%20of%20Specialized
%20Transit%20Policies%20Practices
%20%20Procedures.pdf)
(Whitehead / Bruckler - Motion to refer to staff for review and comment - CARRIED)

Braden : "Thank you, Madam Chair. Just one, I marked. Under 'Hours of Service'" (See Recommendation (a) subsection (i) "That an extension of the hours during which service is available be considered, with pick-ups as late as 12:30 a.m. on Friday and Saturday evenings, for a trial period of no less than six (6) months;") "I think we're talking about extending it for a trial period. I understand that in things like this, we need to be brave enough to look at things. But, we also have, I thought, another principle which was, we're not increasing any services. So, I just raised this in that we need to know if we really are going to consider increasing standards anywhere. And, I would suggest that this is probably the first place. But, I thought we were at a place where we weren't going to extend services at all. So, if we don't have a, sort of a philosophy that says, you know, we can't afford new services, then I would wonder how we were sort of contravening that here. Because, I did think we had an attitude that we'd agreed with which is we're not going to extend services beyond what we have now."

McCarthy (as Deputy Mayor and Acting Chair) : "May I suggest, may I suggest, Councillor Whitehead that we refer this report for Staff comment and Review during the 2005 Budget deliberation process? That would be Councillor Whitehead who moved it. You okay with that Councillor Whitehead? Seconded by Councillor Bruckler. All in favour of that Motion? That Item is carried."

10. HAMILTON UTILITIES CORPORATION - SHAREHOLDERS MEETING
10.1 Resolutions of Shareholder - Hamilton Utilities Corporation
(Morelli / Ferguson - CARRIED)
(http://www.hamilton.ca/Clerk/agendas-minutes-reports/
committee-of-the-whole/2004/Aug11/Item%2010.1%20-%20HUC.pdf)

McCarthy (as Deputy Mayor and Acting Chair) : "Now we move on to the Hamilton Utilities Corporation. Councillor Merulla."

Merulla : "Just on this issue, Madam Chair. I recall back during the Budgetary Period that before a Motion, for full disclosure of salaries, wages, bonuses of the Hamilton Utilities Corporation, what's the status of that particular Motion now?"

McCarthy (as Deputy Mayor and Acting Chair) : "The man of the day is going to answer you right now. I'm just going to go through what the presentation will entail today. Art, maybe you'd like to answer that first."

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "Perhaps, before I begin, Madam Chair, we had looked at the agenda anticipated being here until 5 or 6 o'clock. So, I've got to compliment you and Committee on being so efficient. This is marvelous. And, speaking to the new, efficient Committee, how long do you want this presentation?"

McCarthy (as Deputy Mayor and Acting Chair) : "I understand from the earlier meetings we had this week, that you had 40 slides. We asked you to reduce that, just because - "

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "So - "

McCarthy (as Deputy Mayor and Acting Chair) : "Do what you feel is necessary to get your message across, Art."

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "Okay, I got the message. Thank you, Madam Chair."

McCarthy (as Deputy Mayor and Acting Chair) : "Thank you. Art, Councillor Merulla had a question for you, as well."

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "Sorry, Councillor"

Merulla : "No problem. Just through you, Madam Chair. Just with respect to a Motion I brought forward back during the Budgetary Period, specifically related to salaries, bonuses of your employees. What's the status of that particular direction . . ."

Art Leitch - President & CEO - Hamilton Utilities Corporation) : (microphone not on, so hear some of answer from another open microphone.) "That particular issue, actually, is before the province right now to discuss their proposed legislation, Bill 100 . . . notwithstanding that legislation, we are going to bring that disclosure at our Board meeting on August the 23 rd . And, that information will be made available to the Mayor as well as Council."

Merulla : "So, it's coming forward in September."

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "Yes."

Merulla : "Okay. Thank you."

Art Leitch - President & CEO - Hamilton Utilities Corporation) : (jokingly) "It's in the mail."

Merulla : "Okay." (giggles from Council)

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC))

(Chuck Hantho gave a presentation of HUC's 2003 annual report. Mr. Hantho, a tallish man, did not speak directly into the microphone, so presentation not on tape. However, he gave a power point presentation and followed the information fairly closely to the presentation, which will be noted below. However, please see a PDF copy of HUC's 2003 Annual report at:
http://www.hamiltonucorp.com/assets/
annual_reports/huc_ar_2003.pdf)

Hamilton Utilities Corporation (HUC) 2003 Annual Report power point presentation. Below was copied from the hand-out of the presentation. Mr. Hantho didn't use all of the slides in his presentation, but all of the slides on the hand-out are "reproduced" as best as possible below in text form:

• Corporate Vision - "We are recognized as the leader in the delivery of municipal utility services and our customers say they are receiving best value"
• Corporate Strategic Planning Vision 2020 - Social/Health; Economic; Environmental
• Corporate Governance -
  • Council
  • HUC Board of Directors (Pres/CEO - 7 independent Directors - Mayor)
  • Hamilton Utilities Corporation (HOLDCO)
    

    	l
    Hamilton Hydro Inc. (Wiresco)	Hamilton Hydro Services Inc. (Servco)	Hamilton Hydro Energy Inc. (Energyco)

    
    
• Responsibilities of the Board of Directors - Strategic Planning; Risk Assessment; Succession Planning and Management Performance; Communications Policy; Internal controls and Management Information Systems
• Board Committees - Audit and Risk Management Committee; human Resources and Governance Committee; Nominating Committee
• Report of Nominating Committee - Independent Directors: Robert Dolan (2 year term), Gary Graham (1year term), Charles Hantho (1 year term), Joan Prior (3 year term), Peter Routliff (2 year term), Owen Schewfelt (1 year term), Marnie Spears (1 year term), Mayor and CEO (ex-officio)
• Rates, Revenues, ROE and Dividends -

Dividend Policy -

• Target 50% of annual earnings subject to prudence of payment with regard for: Sustainability and reliability of infrastructure;
  • Maintenance and growth of approved businesses;
  • Meeting the terms of financing arrangements and the sustained financial health of HUC
• $750, 000 quarterly payments under same prudence considerations
• all dividend payments approved by Board

Investing in our People - HUC Leadership Team

• Formalized Succession Plan for CEO and CMT
• All Non-union Staff Measured against Leadership Competencies
• Workplace communicator Program
  • People Performance Productivity
• HUC Performance Management Balanced Scorecard Metrics
• Financial Results
• Customer Satisfaction Results
• Learning & Growth (People)
• Internal Operations (Processes)
• Health & Wellness
  • Health & Safety
• Innovative 'Leading Indicator' Safety Program
• 2003 (EUSA) 'President's Safety Award'
• NQI - Quality Standard Approach to a Healthy Workplace

Demand Side Management - PowerWISE (An Initiative of Hamilton Utilities Corporation)

• Web-Based Conservation Program initiated in 2003
• 5-year Staged Program Plan Targeted to Specific Audiences
• Aligned to HUC Corporate Social Responsibility Policy

Multi-utility Business

Hamilton Hydro Inc. (HHI)
HHI Strategic Goals - Operational Excellence

• to focus on the delivery of exceptional Customer services to be the 'best-in-class' asset manager
• Growth through Consolidation
• Lead by example by increasing scale through mergers and acquisitions

Operational Excellence - Regulated key Performance Indicators :

Currently Evaluating a Merger Opportunity

• St. Catharines Hydro - 51, 000 customers
• Hamilton Hydro - 176, 000 customers
• Will create the 3 rd largest municipal electric utility in Ontario
• Business case to be presented to City Council for approval
  • Substantial customer benefits
  • Increased financial stability

FIBREWIRED
Hamilton's Telecom Utility

• Neutral Carrier - Open Access to all carriers and service providers
• Affordable - Cost Effective Access; Pay for use
• Essential Public Service - Internet as a tool; Critical infrastructure management
• Enhancing the Customer Experience - Self management; proactive information; customer choice

• IP Services to support next generation applications: voice over IP; Critical Infrastructure Security; storage and Disaster Recovery
• FibreWired High Capacity access to Toronto: OC 192 (10, 000 Mbps); Can carry over 150,000 simultaneous Voice calls; Capacity to deliver over 1000 simultaneous TV Channels; Brings competitive Toronto prices to Hamilton

• Deliver e-Government Services (e.g. MyHamilton.ca)
• Energy Management System: Load Management and Control
• Real time Monitoring and Security: Power, Water, Sewer in infrastructure
• Future: Mobile Workforce Computing: EMS, Public Health etc.

Ensuring Affordability and Value (Expanded Access Alternatives)

• More than just Fibre. . . .: Premium Fibre Optic Access; Fixed Wireless - WiFi - WiMax (examples Ivor Wynne Stadium / TiCats, Hamilton Convention Centre & Jackson Square Court Yard); Power Line Carrier --2004 Trial; Digital Subscriber Line

Hamilton Community Energy (a Hamilton Utilities Company)

Benefits of District Heating

• Environmental
• Community Economic Development
• Cost Efficiencies
• Risk Mitigation
• Safety

ECPT Certified

• Environmental Choice Program Certified District Heating

HCE Strategic Goals

Enablers for Future Growth

• Demonstrated commitment from all three levels of Government
• Regulations for M.U.S.H. sector to connect to district energy
• City support for district energy concept

Hamilton Utilities Corporation - Financial Review 2003

Summary of 2003 Events

• net income $0.8 MM lover than budget ($0.2MM higher than budget before Stelco)
• Stelco loss a significant impact on 2003 year-end and 2004 results
• Operating cash flow remains strong and stable
• Retained highest sector S&P credit rating in North America: A(stable)
• Cost efficiencies have offset ongoing freeze in electricity distribution rates under Bill 210

Selected Financial Results

• Full OMERS pension costs and ongoing LDC rate freeze resulting in lower income '03/'04
• Significant adverse impact re: Stelco loss
• Increase in operating expenses reflects growth in HCE FibreWired operations - HHI stable
• HHI Capex stable at ~$20MM; difference related to FibreWired and HCE growth

Financial Outlook

• LDCs able to earn fair rate of return for shareholder by 2005
• FibreWired earnings trend on track to generate commercial investment returns
• HCE expansion in 2004 expected to improve returns on base project
• HUC to review dividend payment at August 2004 Board meeting - $2.25MM paid in 2003
• HUC remains a valuable asset for City

• 99% of loss represents revenue of provincial utilities and agencies
• HUC is vigorous pursuing recovery of loss and fair regulation for credit risk

DBRS Report on City of Hamilton

• In its recent report downgrading the long-term rating on the City of Hamilton from AA(high) to AA, DBRS: " . . . the City's financial profile is still expected to remain fairly solid, supported by . . . ownership of an attractive asset - Hamilton Utilities Corporation"

Standard & Poor's Reports on HUC
General Comments:

• "low risk business profile . . . strong financial position"
• "is expected to maintain the strongest financial profile in the entire Canadian utility universe"

Stelco Loss

• "Although the unpaid bill is a negative event, the effect is credit neutral due to HUC's conservative financial policy and strong balance sheet."

• Develop new sources of revenue
• Economies of Scale - Utility Consolidation
• Economies of Scope - Utility Convergence

Future Hydro Utility Consolidation? (PowerPoint presentation had a map of Southern Ontario)

Future Multi-Utility Convergence"

• Multi-utility back office services - billing, IT, Demand Side Management
• Multi-utility convergence: Water and wastewater; Renewable Energy; Green EFW

(Mr. Hantho concludes his presentation.)

McCarthy (as Deputy Mayor and Acting Chair) : "Okay. Thank you very much. Okay. Thank you very much. And following the conclusion of these presentations, we'll have to go to Item 10.1 in your agenda and deliberate on the resolution of the shareholders." (Art Leitch speaks, but microphone is not on) "Art, will you hold on just a second, please."

Whitehead : "Madam Chair, I'm just wondering if it would be prudent for us to, we've just had a presentation of . . . " (didn't hear word used) "by the Chair and whether or not we can ask questions directly to his presentation, before we go on to the next stage."

McCarthy : "I think that's probably advisable because we've got a few speakers on that presentation, Art, so you just hold off for a second? Okay. Councillor Whitehead go ahead."

Whitehead : "You had up the slide, the Board of Directors and the question I have is specific to process. How do you solicit, how do you go about finding board members?

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC)) : "Well, we first create a nominating committee and to do that, we go through a process where the Mayor is asked to consider, and to check with others, whether or not the Chair that is in place will be nominated for re-election in the following year by both consulting inside the Board and externally. And, once that decision is made, the Chairman - i.e. now in the case, me - forms a nominating committee within the Board, with approval of the Board of Directors. And then, we do a review of all our Board members from the standpoint of their backgrounds, their skills and we look them fresh, each year, and what are the challenges that Hamilton Utilities is going to be facing? Have we got the requisite skills in place; and the requisite experience? And, we develop a profile of what the ideal Board would be. Then we, with that profile in mind, we go out and do an external search through, we ask various people; we ask the Mayor for suggestions; we talk to various people outside. It just so happens that one of our members, Robert Dolan, is in a search HR consultancy and he has access to a lot of information on people and we've, at very low cost - like no cost - have come up with a widened view of potential candidates. And, we screen these down in committee based on the skill base we're looking for 'til the point where the committee agrees on the list of one, two, three, if you like. And then, we go to the whole Board with the one, two, three and get their, their support and discussion of that prior to coming down with our final list. We, actually, in the process, interview two or three, in this case, we've interviewed four or five external candidates, before we've settled in on Joan Prior.

Whitehead : "I guess the question I'm trying to get at, is it doesn't appear that the search is too broad. I mean, you don't solicit to the broader community through advertising, do you?

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC)) : "No, we don't advertise for it. We rather believe in shooting with a rifle than with a shot gun."

Whitehead : "Okay. I just have concerns about that. We are the major shareholder and it belongs to the broader community and I guess my concern is that I believe, you know, you can use the analogy of a rifle versus a shot gun. But, it's not an analogy I would use. The reality is that I'd prefer an open process where anyone interested - as far as everything else you've explained, I have no problem with that in regards to criteria, the nomination committee, etc. But, I believe that the search is too narrow and that good people who might want to and can contribute and meet the criteria of your Board, or your nomination committee, are being left out of this process through the approach that you're taking. So, I guess, if I have a suggestion, I would suggest that the Board reconsider the approach and open up to the broader community through application and you can certainly set some tight criteria on those postings. But, I still would prefer the broader community have the ability to apply. So, that's the first point."

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC)) : "Absolutely no objection to that. I think that we would consider any application. I think it would be important to lay out, for us, to lay out the profile that we're looking for. But, within that, I think we would be open to invitations coming from anywhere. If you have suggestions of an effective way of posting that - the fact that we are considering new directors, that would be welcomed."

Whitehead : "Great, now the last questions I have - and I don't know if this is the appropriate time to ask it - but it's relative to the whole issue around, you did talk about dividends and dollars and my concern is there's still this challenge, the CCAA with the Stelco and we know that we've heard recently that they've made significant profits in the last quarter. I guess the question is: where does that put you as a creditor relative to the ongoing issues with Stelco?"

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC)) : "John, you might want to reply to that."

John Basilio (Senior Vice-President CFO - Hamilton Utilities Corporation (HUC)) : "Where an unsecured creditor largely is the construct of regulation, we've had a very difficult time to secure ourselves through things like deposits and letters of credit. But, we're an unsecured creditor and stand-in-line - probably one of the largest unsecured creditors Stelco has, but stand-in-line with them subject to whatever restructuring agreement they settle with their creditors. We're not anticipating very much. This is typical from whenever restructuring happens when they get the merge from insolvency."

Whitehead : "Well, it's my understanding that the, that's being challenged. It's being challenged the whole usage of the tool of CCAA," ( I think he is referring to the Companies' Creditors Arrangement Act, a federal law - see website: http://laws.justice.gc.ca/en/C-36/35512.html#rid-35518) "in regards to the Stelco's current situation. I believe it's going in the courts. Do you have any update on that?"

John Basilio (Senior Vice-President CFO - Hamilton Utilities Corporation (HUC)) : "Yes, I think our view - and again this is based on what you read and listen; analyst reports and whatnot. But, our view is that won't likely be successful. We, of course, have as much of a look at Stelco results as are made available publicly. And the short term spike in steel prices is not going to solve Stelco's woes. And, with that in mind, they remain a going concern problem. And, I guess it's our view that those that are challenging the insolvency won't be successful and Stelco will have a stay under CCAA until they can resolve their past issues."

Whitehead : "That's all the questions I have . . ."

McCarthy (as Deputy Mayor and Acting Chair) : "Thank you very much."

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC)) : "Just a point to add, letting you know that we are looking at other avenues through the regulatory process . . . because, clearly, the way in which we're carrying the credit - or Ontario Hydro and Hydro One as well, itself - totally unfair and it has to change. And, we're working hard to make sure that it is changed and we hopefully we will recover sometime soon."

McCarthy (as Deputy Mayor and Acting Chair) : "Thank you very much, Charles. Going on to Councillor Collins and then onto Councillor Merulla and then we're going to have Art Zudema's (?) presentation after that. So, hang in there. Or, sorry, Art Leitch."

Collins : "Madam Chairman the, I thought the original legislation from when Hydro was, the new Hydro Board was put in place required that the audited financial statements be submitted to the Municipality. Is this what we're considering the audited financial statements?"

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC)) : "The audited financial statements are in the Annual Report."

Collins : "Would the Board have received a report from the Auditors separate from this package here?"

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC)) : "We had a, in January or February, a very long session with the auditors going through all of the contracts, reports. . . " (couldn't hear what he said) "so we had a . . ." (couldn't hear word used) "opinion through the auditors through the audit committee and recommended to the Board, and the Board had another look . . ." (couldn't hear the rest of Mr. Hantho's comment)

Collins : " So, we would have letters of recommendation from the auditors and other issues that wouldn't be included in the Annual Report, but are part of the audit?"

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC)) : "The Management letter from the auditors to Management saying, 'now, in the course of the audit here are some suggestions what we found - none of which is material and would influence our clean opinion on the audit.'"

Collins : "So, are those financial statements then submitted to the Municipality as per the legislation?"

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC)) : "Yes."

Collins : "And, we would have a copy of that Financial Statement?"

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC)) : "Just to -"

John Basilio (Senior Vice-President CFO - Hamilton Utilities Corporation (HUC)) : "We would have, which I presented to Joe Rinaldo, copies of all of the audited financial statements related to the HUC corporate group. So, they would be audited statements, probably not unlike the City statements. I think what you're asking for, is what you would get for the Municipality, which is a list of Auditor recommendations, findings, observations, as a result of, you know, in the due course of the audit. Those things are not submitted to the municipality - weren't required pursuant to the Act - I mean, I think what we are required to provide are the statements, but I mean, I don't know. I think as Charles mentioned, there was a very short list and nothing that would keep you awake, that's for sure."

Collins : "But, if we wanted to get those statements, they could be forwarded to the -"

John Basilio (Senior Vice-President CFO - Hamilton Utilities Corporation (HUC)) : "I think so, sure."

Collins : "to our Treasurer for review?"

John Basilio (Senior Vice-President CFO - Hamilton Utilities Corporation (HUC)) : "We'll forward them to Joe."

Collins : "Okay. Second to that was the issue of the Auditors themselves. And, I'm curious to know why we would have a separate auditor for HUC and the City. Have we had the discussion or the debate, have you had the debate at the Board, possibly looking at purchasing the services of the City's auditor, you know since you are a subsidiary of the Shareholders?"

Joe Rinaldo - General Manager, Finance and Corporate Services : "Perhaps I can help, through you, Madam Chair, when the City did a review of their audit proposal, as you know, that was right at the beginning of the amalgamation, and at that time, given the complexity of the issues of the amalgamation, we decided - we had a brief discussion with HUC as to whether or not we should have the same auditors and we made a decision at that time, given the complexity, not to, but when -"

Collins : "What reasons would have prevented us from doing that?"

Joe Rinaldo - General Manager, Finance and Corporate Services : "There was nothing to prevent us. I was going to suggest when we do the review again - because that's a 5-year cycle for us - that we would look at that again. And, if Council gives us that direction, we would actually, we could go in that direction as well."

Collins : "When does the 5-year period expire. Is that next year?"

Joe Rinaldo - General Manager, Finance and Corporate Services : "Yes, next year."

Collins : "They're asking for approval today, through you, Madam Chair. Joe, they're asking for approval to secure the same auditors. Is there flexibility, then, in changing?"

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC)) : "Well, I think the Motion's looking for this fiscal year to adopt, to have those same auditors. And, you could be working through this year in considering what you want to do next year, with respect to appointment of auditors. That would be my recommendation."

Collins : "Well then, I would ask that our staff, through you, Madam Chair, work with HUC staff to look at an opportunity to merge our auditors next year for calendar year, 2005. I don't know how that happens internally, but I would ask that you report back on that issue, if possible, and the time lines and costs associated with undertaking that exercise."

McCarthy (as Deputy Mayor and Acting Chair) : "Okay?"

Collins : "That's all the questions I have."

McCarthy (as Deputy Mayor and Acting Chair) : "Thank you, Councillor Collins. Councillor Merulla, you're next. And then, we're going on to review Art Leitch's presentation."

Merulla : "Thank you, Madam Chair. Through you, Madam Chair, to whoever can answer this, during the budgetary period, we had anticipated a dividend cheque, Now, my understanding is that there will be a meeting at the end of August to discuss the potential allocation of that dividend to the City. What was the actual delay in providing those monies to the City for 2003 fiscal year?"

Chuck Hantho (Chairman, Board of Directors - Hamilton Utilities Corporation (HUC)) : "Well, as I was pointing out, we were current on the 1 st quarter, 2 nd quarter, 3 rd quarter at the $750, 000 level. In January, when we looked at the full year, to make our decision on quarter 4's dividend, that's when we deferred the decision. We didn't decide not to send the dividend, we decided to defer the decision on the dividend. And, there was obviously reasons for it vis a vis prudence it also - to be quite frank about it - the notion of declaring a dividend while looking for the Government to accelerate a response to the unfairness of the credit risk that we had assumed, just didn't seem consistent. So, that was deferred. And, the 1 st quarter" [of 2004?] "was likewise, deferred. So, on August 23, we're going to go back and look at both the quarter 4, 1 st quarter and what we do about the 2 nd quarter and prospectively for the balance of the year. And, you'll be hearing from Hamilton Utilities soon after the 23 rd board meeting."

Merulla : "Okay. All right. Thank you."

McCarthy (as Deputy Mayor and Acting Chair) : "Thank you, Councillor. And, Art, we'll ask you to go forward, please, thank you."

Art Leitch - President & CEO - Hamilton Utilities Corporation) : (Mr. Leitch uses some of the slides from the slide presentation, printed in text form when HUC was introduced to present) "Thank you, Madam Chair. Just following up on those comments. Hamilton Utilities Corporation had a very successful year in 2003, but for the Stelco loss, which basically would wipe out the whole bottom line of the company on a normal year. And, we're vigorously pursuing recovery of that loss, because we believe it's a fundamental flaw in the design of the electricity market in Ontario, that imposes this credit risk on the rate-payers of Hamilton Hydro. This is a credit risk that pertains to other market participants and our CFO will go through in a later slide, the anatomy of that loss. The other issue affecting Hamilton Utilities Corporation and Hamilton Hydro financially this year, is we're in the third year, the third year of a revenue-freeze - a rate freeze for this utility. Our rates have not gone up for 3 years, notwithstanding those two fundamental financial challenges: productivity improvements at Hamilton Hydro have so contributed to the bottom line, that we think we're in a position to go to the Board on August the 23 rd and have reconsideration of the dividend deferment that has been in effect for those prudent reasons. As Chuck said, as part of the responsibilities of the Board of Directors is to ensure that there's a succession plan for the CEO for this company. And, I can assure you, and I'm pleased to report this, that on our corporate management team we have a number of people who will be presidents and CEOs of some company in the future - whether it's Hamilton Utilities Corporation, or some other company. We have a very good team at our Corporate Management Team. The structure of this business - Hamilton Hydro being the largest company focus on the delivery of service, as well as the low rates. Operational excellence. We are regulated by the Ontario Energy Board and must meet these standards and your slide, there, indicates our exceeding performance standards. We're evaluating a merger opportunity with St. Catharines Hydro. This is all in view of an effort to pursue economies of scale; to find every opportunity we can, to further reduce costs for our rate-payers. Fibrewired continues to be a very compelling success story in the telecommunications business. It is generating revenues each year beyond our expectations and we believe it is emerging into Hamilton's telecommunications utility, providing what is evolving to be an essential service. The internet is more and more becoming a tool of business and residence. Hamilton Community Energy, probably the best example of the issues that Chuck talked about - the triple bottom line, not only returning financial results, but contributing to the community social and health benefits, as well as financial. At this point, I'll ask our CFO" (Chief Financial Officer) "John Basilio, to come forward and briefly go through some of the slides on the financial report."

John Basilio (Senior Vice-President CFO - Hamilton Utilities Corporation (HUC)) : "Thanks. Thank you. Just to echo Chuck's and Art's remarks, from an operational perspective, 2003 was a very successful year, financially - despite the rate freeze; despite the Stelco loss. And, as they've mentioned, this really stems from some excellent performance in cost containment for Hamilton Hydro, as well as some very good results from Fibrewired - specifically Fibrewired revenue growth and profitability growth has been very good. Unfortunately, Stelco puts a crimp on this in 2003 and those impacts will carry over into 2004. But, despite the Stelco loss, I think what's important for this community and our shareholder is that Hamilton Utilities remains, its financial position remains strong and supportive of our infrastructure program of sustainability in our investment in this community and supportive of your share value and dividend prospects. This slide really just summarizes some of the key metrics: Net Income; Operating Expenses; and Capital Expenses. And, as you can see in 2003, we were performing better than in 2002, again, despite a rate cap and prior to the Stelco loss. And, what we're showing you in 2004 on an after-tax basis, the brunt of that Stelco loss is going to be felt in 2004 and that's going to have a significant impact on our profitability projections for this year. Operating expenses have grown. Generally, that's a bad thing. But, in this instance it's actually a good thing because it heralds revenue growth in two new businesses: Fibrewired and Community Energy and which nets out to net income growth and will hopefully translate into dividends. Our capital program, as you can see, is largely consistent through these years. For Hamilton Hydro, it represents a sustainable, predictable reinvestment in the infrastructure in this community and for Hamilton Community Energy, it represents growth and a new business and the same for Fibrewired. Despite the challenges in 2003 and 2004, there's and up tick on our outlook. Local distribution companies will be able to earn a fair rate, we hope, in 2005. The Bill 210 rate cap that's persisted for the last 3 years is expected to be lifted in '05 and allow local distribution companies to really start generating returns that will support infrastructure investment on a sustainable basis and at the same time, provide more consistent and reliable dividends to municipal shareholders. Fibrewired continues to be a financial success story for HUC - strong revenue and profit growth. And, as mentioned before, Hamilton Community Energy really in a start-up position. We expect returns to improve, given some growth we expect in 2004/2005. As Charles mentioned, we'll be making a dividend recommendation to our Board in a couple of weeks, I guess. But, overall, I think what I want to close with, here, is that we believe HUC remains a very valuable asset for this city with tremendous potential to deliver economic benefits. I'll talk a little about those in a second. Just a quick refresher on the Stelco loss, which has been before Council, before. Our total pre-tax loss, after some recoveries really holding back cash from Stelco, is about $6.3 million. And, the very small number there, in Hamilton Hydro Inc. revenue is the amount of our share of that $6.3 million loss. The rest represents revenue of the Provinces wholly owned utilities and that is simply grossly unfair and a material flaw in the construct of the electricity regulation. We're vigorously pursuing recovery of this and we're now at a point - our efforts thus far haven't been particularly fruitful. And, where we go from here, is we're exploring legal action against the Province's utility agencies - particularly the independent market operator on the basis that they've acted outside of the objects of the regulation that governs them. So, we're turning the heat up. Until the government makes some changes along those lines, credit risk remains one of the top risks for our organization. I made an assertion about HUC being a valuable asset for this community. And, you can turn to your own rating report for this city for some corroboration of that. DBRS extols HUC as being an attractive asset, supporting your own rating and despite your recent down grade and we've presented this city with many opportunities over the last couple of years for you to further leverage the value of this investment - some of those things you've been supportive of thus far, such as our expansion in Fibrewired and Community Energy and other opportunities we continue to work on with you, such as a water and waste-water corporation and energy from waste, we look forward to our ongoing discussions and hopefully, together, we can come up with some good business opportunities, there. This is Standard and Poor's and you've seen these comments on us before. And, this is really some corroboration of why we believe we can deliver that value. We have some expertise in managing utility businesses, which is reflected in Standard and Poor's comments. And, despite Stelco, we retain the highest S & P sector rating in North America. So, overall, this is a very strong asset this city has. Thank you."

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "And, just to finish up, Madam Chair, with a look to the future of Hamilton Utilities Corporation, as successful year in 2003, notwithstanding the Stelco loss and the rate freezes, but the lesson there is that we must, as a company, develop new sources of revenue. We cannot be relying on revenues coming from a one utility or a multi-utility strategy and a utility consolidation strategy still remain the future focus of this company. And, you've seen these slides every year, when I've come and made a presentation. This is the strategy for Hamilton Utilities Corporation, and were keeping true to that strategy. You saw this slide last year. We believe that there is going to be inevitable consolidation of the 94 local distribution companies" (LDC) "in this province that the fragmentation of LDCs in this province is inefficient and were' pursuing a business case right now looking at a potential merger with St. Catharines Hydro and we're starting to see some positive results coming from that business case. So, we will look for opportunities in utility consolidation to leverage potential economies of scale. Utility convergence of being a multi-utility has been our strategy from the beginning - to not look to one utility as a source of revenue. And, as John said, we're working with City staff for opportunities that will allow the City to leverage this asset, this valuable asset that they have in Hamilton Utilities Corporation. Madam Chair, I hope we've all filled your requirements to move -"

McCarthy (as Deputy Mayor and Acting Chair) : "Thank you very much, Art. And, members of committee, we're almost there, we're at Item 10.1 and we're going to have to be deliberating 3 recommendations under that report at the moment if there's any questions to our presenters, please make yourselves know. Councillor Ferguson is first."

Ferguson : "Thank you, Madam Chair, through you, to Art or John, what - 3 years hence, what do you project dividends will be given the St. Cath - first of all the St. Catharines merger, is that a potential merger or is that a going to happen merger?"

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "The St. Catharines, the situation with St. Catharines is we're doing a business case right now to see if there is a business case for a merger. That's - fundamental to that business case will be a requirement that we'll be able to demonstrate to you, as the shareholder, that a merger would create value, for you as a shareholder; create value for rate-payers and for example some of the issues that we will look at in a business case to see if there is a business case for a merger is the potential for improving the prospects of dividend payments from a merged company, as opposed to a stand-alone company. So, they are issues that we look at. So, on a go forward basis, 3 years from now, what will this company look like. That's the question. Will it just be Hamilton Hydro, subject to diminishing returns on productivity improvements. Or, can we take advantage of the economies of scale and have Hamilton Hydro be a leader in what we see as the inevitable need to consolidate and rationalize local distribution companies in this province."

Ferguson : "Okay, little bit, through you Madam Chair, do a little crystal ball gazing. Three years hence, assuming the acquisition takes place; assuming the Stelco issue is resolved; and assuming the rate freeze is lifted - any idea of what the annual dividends would be? What I'm really asking is when are we going to see a $100 million like EPCOR" (see website: http://www.epcor.ca/default.htm ) "get as dividends every year?"

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "Well, there is a lofty ambition. As you know, EPCOR, a 100% owned by the City of Edmonton, has been for 10 years, involved in water and electricity and paid a dividend to the City of Edmonton of over $100 million dollars, which represented 10% of their budget. I think that should be your ambition for Hamilton Utilities Corporation."

Ferguson : "Okay, what year is that going to happen, here?" (Laughter from Art Leitch, Council and galleries)

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "I think that seriously, should be part of our 5-year strategic plan."

Ferguson : "Okay, could we write that - make a note of that?"

McCarthy (as Deputy Mayor and Acting Chair) : "There we go."

Ferguson : "The Stelco number - is it $9.3; is it $6.5 or is it $4 million - what's the number?"

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "It's - the amount that Stelco didn't pay us was $9.5 million. We recovered approximately $3 million dollars of that money through a rebate that was otherwise out to them, but related to the period prior to when they went bankrupt. So, it netted out on a pre-tax basis. I think I showed a number of $6.3 million. That's pre-tax. That loss is deductible from our income tax liability. So on an after tax basis, we recover some tax, it's $4 million and change."

Ferguson : "Okay. Are they current, now?"

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "They are current. They're paying us weekly, in advance and we're in a very good situation right now from a security perspect - we've very much limited our exposure to -

Ferguson : "Well, that leads into my next question: has the Board put in place a policy, would, you know, can it handle this situation, should it happen again, with another large customer?"

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "As John says, we've put Stelco on weekly payments, as opposed to monthly payments, which are the norm for large commercial and industrial accounts. The real problem, through you Madam Chair, is in the regulations and legislation that severely limit the steps that utilities can take to protect themselves from this credit loss. Fundamentally, LDCs, like Hamilton Hydro, which deliver electricity, should not have any exposure to the commodity part of the bill. We're not in the electricity business. And, why we are taking that risk and exposure, it the fundamental question that we're putting before the province and suggesting that the market design is flawed, that the risk or the commodity should be borne by the people that make money selling electricity, not by the local distribution company, owned by the ratepayers of Hamilton Hydro that pay for the wires that deliver electricity.

Ferguson : "Is there any other low-paying fruit after St. Catharines, you're looking at - without divulging it any?"

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "Yes, my slide with the future consolidation shows the utilities in this graphically contiguous area that we would look at that range from the borders of Toronto around the Golden Horse Shoe and into the Niagara Peninsula."

Ferguson : "Just to be clear, '03 you paid us dividends of $100 and a half for three quarters and we haven't received any in 04."

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "In 2003, you received three quarterly dividend payments totaling $2. 25 million. Now, we deferred the dividend on Q-4 and in 2004 on dividends Q-1 and Q-2 and those dividends will be discussed at the August 23 rd Board meeting."

Ferguson : "Okay. Just for a second, Joe do we put that in our Budget - those dividends?"

Joe Rinaldo - General Manager, Finance and Corporate Services : "Absolutely. We have $3 million dollars as you know for us to do that. I've assumed, for the purposes of variance support, we will receive them. And, I have confidence that we will. But, it'll be up to the Board."

Ferguson : "Thank you very much."

McCarthy (as Deputy Mayor and Acting Chair) : "Thank you, Councillor Ferguson. Councillor Whitehead and then Councillor Mitchell and hopefully, we can wrap this up. Go ahead."

Whitehead : "If I can, I'll just save my comments 'til the end because it's not directed to the report, but it's dealing with a responsibility. (Deputy Mayor, suggests Whitehead continues his comments.) Okay, well, at Council, in the past, I know it was in the paper about these subtrain transformers being raised onto easements, onto, you know, onto people's properties and it became a park area, and it became a very hot button in that area within my ward and I had raised the question at council when this particular presentation take place that an opportunity for Hydro to, Hamilton Hydro make representations relative to that issue. In fact, that's not happening, and I don't have a problem with that because I have been in direct discussion with Art and he's been very responsive, they've - I just want to update the Council that - or my colleagues, here, that . . . holding a moratorium; we're having community meeting and we're going to sit down with the community and talk about what's taken place. . . . It's unfortunate that it didn't take place after these actions but in fact, were going to sit down with the community and talk about the rational way it's taken and what kind of things can be done to potentially mitigate it. I haven't taken a position on it . . . "

(tape stopped)

Mitchell : (didn't get beginning of Councillor Mitchell's comments) " . . . Art, we've spoken many times about energy from waste and I know that it is a potential revenue source for you, or for Hamilton Utilities Corp - for our tax-payers. Any updates or feelings on that issue? I know you know we're working with Niagara now and you've showed an interest in the past - just any updates with regards to that revenue source?"

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "Through you, Madam Chair, nothing specific to update, as was indicated by John, it's a, an opportunity that we look for as a potential source of revenue and it has become more important. As you've read, this Province is facing a crisis in electricity supply and are looking, and are going to have to look, at alternative sources of electricity generation. And it's possible that green energy from waste projects will become one of those opportunities that the province will support as means of replacing the coal-fired generation plants and having energy that's distributed throughout the Province, rather than relying on central distribution plants and the potential risk that they, that puts the Province to. So it's a ? that we're keeping an open watch on."

McCarthy (as Deputy Mayor and Acting Chair) : "Right, thank you Councillor Mitchell. Councillor Whitehead and then I'm going to Councillor Merulla. Sorry, McHattie - I keep doing that - and I'm going to Councillor Merulla then for a motion on the report, to move the report. Sorry, it's been a long day. There you go, switched your name on you." (a few giggles from Council).

McHattie : Thanks, Madam Chair. Sorry Art to miss your presentation. I've been here since 9:30 this morning, so I had to sneak out and get a couple of things done."

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "I'll give you a personal presentation -

McCarthy (as Deputy Mayor and Acting Chair) : "No, don't do that again." (giggles coming from Council)

McHattie : "We've had some presentations before - it's great stuff. I just want to ask a question about a land use issue that's going on right now that you're involved with Hamilton Utilities Corporation. Just understanding process and what our roll is as the primary shareholder and the sole shareholder in the organization? As you know, you're looking at selling some lands in upper Stoney Creek, some Hydro lands and our staff have commented that it doesn't meet the Stoney Creek or I guess the Hamilton - Wentworth official plan and the Niagara Escarpment Commission," (NEC) "which I sit on, on behalf of the City, denied the application, as well. I'm just trying - and you're, I understand, are considering or have already appealed the NEC decision, which costs money, I guess for the share-holder, I guess, or for the Corporation. So, I'm just trying to understand that kind of situation where the sole share-holder is expressing concern - the Niagara Escarpment Commission is kind of separate I guess, that way. I'm just trying to understand the process on that and how, what role Council has as the shareholder in that situation?"

Art Leitch - President & CEO - Hamilton Utilities Corporation) : "Very good questions. I was surprised when I read the news papers today and found out that I was in a fight with the City and that came as a surprise. Lee Ann" (Coveyduck, General Manager - Planning and Development) "and I have talked about this and she assured me that she is going to go easy on me. We are selling some surplus land that had been purchased by Stoney Creek for a hydro transmission line that never went into place and the norm is we offer that land to the abutting shareholders on either side - or land owners on either side. As, Lee Ann commiserated with us, we're not involved in what happen to those lands. But, it's our understanding that one of the landowners wants to put a residential building on some of that land. My thought on this is that, this is not something that Hamilton Hydro should be involved in - and certainly not involved in an opposition with the City as shareholder. So, I'm - and I haven't thought this through - I'm thinking out loud and even haven't had a chance to talk to our Chairman, yet. But, one of the options we could pursue is a dividend of that land in kind to the City and the City could do with that land what it wishes to do. But, as I said, that's just an idea and that may not be the best approach. I can assure you the one thing that will not happen, because we - Hamilton Hydro - will not be fighting the City on this at all."

McHattie : "That's good to hear, Art. It's, and I guess there was a concern, when I saw it at the Niagara Escarpment Commission and heard that it may be appealed, kind of thing and the City's role and the fact that we're the sole share holder, we want to work together on things. So, good to hear that we can try and work it out - I know you're going to be talking about Lee Ann about, your know, finding a solution of some sort that would be beneficial to both sides - really one side, we're working together on this. So, that's great to hear. Thanks."

McCarthy (as Deputy Mayor and Acting Chair) : "Thank you Councillor McHattie. Councillor" - (Morelli speaks off phone) "You're going to Move the Motion? Moved by Councillor Morelli, seconded by Councillor Ferguson. All in favour of the Motion on Item 10.1? Carried. Thank you. Thank you very much to our presenters. Thank you for coming in. I appreciate the brevity and the efficiency with which you did it."

7.3 Niagara-Hamilton WastePlan - Environmental Assessment Terms of Reference
Note: Due to bulk, the appendices are available for perusal in the Office of the Clerk
(Whitehead / Morelli - CARRIED - (as amended by Councillor Collins' Motion))
( http://www.hamilton.ca/Clerk/agendas-minutes-reports/committee-of-the-whole/2004/Aug11/Item%207.3%20-%20NIagara-Hamilton%20WastePlan.pdf )

McCarthy (as Deputy Mayor and Acting Chair) : "Councillor Collins, we're going back to your motion, now, which is 7.3. And, it's the Niagara-Hamilton WastePlan Environmental Assessment, which you've been working on in conjunction with the staff and I believe you've got a motion to present to us for approval. Thank you."

Collins : "Madam Chair, I guess one of the problems that we've run into is that there is an issue that we're sort of at odds over. And so, I'll place my Motion. The first part, we've revised some of the wording that I had and this is supported by staff: 'that the selection of the technology for a new facility or facilities, will only consider the need to manage residual waste from the current communities of the City of Hamilton and the Region of Niagara.' That's part 1 of the motion. Part 2 of the Motion is: 'it is understood that new facility will only accept residual waste from the current communities of the City of Hamilton and the Region of Niagara.'

And, the 3 rd part is: 'that each municipality would be responsible for managing their own share of any process residues from a new facility.'

McCarthy (as Deputy Mayor and Acting Chair) : "And - "

Collins : "And the part we're at odds is the second part of my motion that stipulates the facility will only accept residual waste from the current communities of the City of Hamilton and the Regions of Niagara. And, maybe Scott can elaborate on staff's position on that."

McCarthy (as Deputy Mayor and Acting Chair) : "Go ahead, Scott."

Scott Stewart - Director (Capital Planning & Implementation) CPI, Public Works : "Thank you. Through you, Madam Deputy Mayor. Really, as we're following the process. And, the working committees of both Niagara and Hamilton, we've moved this along to a point where it's left open enough so that if there's a future business case, and so then we've left it open for a future opportunity, if some other municipality - be it Halton, be it Toronto - wanted to come back to us in the future and said: 'You have surplus capacity' or 'we would like to add our tonnage' and there's business case, will you look at it, the way it's written today, the report in front of you today, allows that opportunity to happen. Of course, that would be subject to both Hamilton and Niagara bringing it back to our respective councils for that decision. Somewhere in the next 12 to 18 months, we'd see that decision if it really is out there. And, that seems to be the dilemma facing the Councillor, today."

McCarthy (as Deputy Mayor and Acting Chair) : "Okay, thank you. And, Councillor Collins, your Motion has been Moved and seconded by - "

Collins : " - Seconded by Councillor McHattie and if I could speak to my motion, I read it out and I didn't get a chance to speak to it - "

McCarthy (as Deputy Mayor and Acting Chair) : "Sure, absolutely."

Collins : "I guess my concern is just that, Madam Chair, and that is the issue that we may entertain at some point in time, accepting waste from another municipality and I would prefer, if we are partnering with Niagara, to do just that - partner with Niagara; look at the needs for both communities in regards to waste, and accommodate those needs within the framework that has been suggested. To then talk about or suggest or even contemplate building a facility that might accommodate waste from another community, whether it's Halton, Toronto or anyone across Canada or the United States I think is a dangerous precedent for this municipality to set and I would prefer to travel along the road that we have so far and that is between the two communities. And so, I think it's quite clear, the Motion is that we would just deal with the two communities' waste and that's the Motion."

McCarthy (as Deputy Mayor and Acting Chair) : "Thank you Councillor Collins. Your Motion is clear and your intent is clear. Councillor Ferguson. Councillor Bruckler after that and - "

Ferguson : "I've been at a few of these meetings of - I don't disagree with the intent of the Motion. I just wonder if it is premature. In terms of the process, through you, to Scott, will this handcuff the process - like Halton's been at every meeting so far, I think?

Scott Stewart - Director (Capital Planning & Implementation) CPI, Public Works : "Through you, Madam Deputy Mayor, as I understand it, Halton has been at every meeting. From our perspective - from staff's perspective only - this would handcuff any future potential that may be out there, i.e. if Halton says: 'We would like to participate at some point,' it handcuffs that opportunity. Of course today, if you followed the Motion that Councillor Collins has presented, we would not entertain that at any point as a go forward from today."

Ferguson : "I don't have any problem with this Motion, like you say 12 or 18 months hence, but to impose that now it's, it's - I would like to see this Tabled for 12 months, this Motion."

McCarthy (as Deputy Mayor and Acting Chair) : ". . . Councillor Bruckler."

Bruckler : "I think it's a valid concern. But, I think we have to consider that there are various degrees to which other municipalities might be able to participate within such a facility in the future. Again, I'm not the technologist in this particular process, but the kind of understanding that I'm getting is that there may be opportunities when the plant, which is built for a certain capacity, may not even reach those capacities. So, from an efficiency of operation perspective, it may be strategic for us to bring in waste, perhaps, from other municipalities at some point in time in the process. I mean, that's limited use and I think that might have some efficiencies for what we're doing. I think that it's a long process that we're going through and I wouldn't want to see us handcuff ourselves at this point in time, with the Terms of Reference for the E of A" (Environmental Assessment) "because, when we look at the process, that E of A process is a long one, it's an arduous one and I think that any changes that we would want to make in the future to that E of A would be very complex and would take a much, again would take a long period of time. So, by keeping those alternatives open to us, I think is sound at this point in time. The ultimate decision, of whether we want to advance - or whether we want to consider other communities' waste, I think still rests with this Council and with our joint management committee. It's just giving us that window of opportunity and we're the ultimate decision makers. Like I said, the Environmental of Assessment process really scares me. To have to reopen that, if there are some future opportunities - and again, I think we might also be turning aside any opportunities for us from a negotiating point of view. So, we're looking at the MRF" (Material Recycling Facility) "We're looking at other kinds of opportunities. So, we could be hand-cuffing ourselves as well."

McCarthy (as Deputy Mayor and Acting Chair) : "And, Councillor Mitchell, you're next. Thank you."

Mitchell : "Well, as I said this morning, Madam Deputy Mayor, I think it's a little premature at this time, when the working group consisting of five City of Hamilton Councillors - and Councillor Braden being the Co-Chair - that this be put forward at this time. The process of the EA process, is very slow to begin with. And, we're a long ways away from getting that completed and I don't want to slow that down. So, if this is a Notice of Motion, or I would support Councillor Ferguson's Tabling for a year. We are aware of it. We do need one more new member on that working committee. If one of this two councillors want to sit on that, they'd find out how everybody cares and how well it's working and I'd hate to tie our hands at this point in time because all of the new technology has not been studied or brought forward, yet. And, I don't want to tie our hands, yet."

McCarthy (as Councillor) : "If I could relinquish the Chair just for a second, to Councillor Whitehead, I'd like to drop my oar in here. I think that the intent of, what I believe to be is an Amendment to the Main Motion - I'm I correct, Councillor Collins or are you creating a new Motion? But, I think the intent is what, is the direction that I would like to see. I think we do not want to be seen as a potential dumping ground for everybody's, everybody's garbage, litter, whatever and I think that the negotiations that are taking place are consistent what Councillor Collins has suggested and it's the negotiations that are taking place right now with Niagara that we're primarily interested in and I think that that voice has to be heard out in the community. I think we have to make the intent known and I think it's achieved by that Motion or Amendment and with that, I'll continue on. Thank you, Councillor Whitehead." (Takes back the Chair) "We're over to Councillor McHattie now."

McHattie : "Thanks, Madam Chair. I think the essence of this is that, the actual choice of technology may actually be based on the potential for the number of communities - or the volume of solid waste that may be actually used in the facility. So, there is the temptation to over-size it or at least size the technology or choose a specific technology that may be able to handle additional communities' waste. So, I think what we're talking about is quite fundamental. The question is - and I think it's not too early to talk about this - the Terms of Reference for any initiative is very important and provides the very strong guidance for the, how the process moves forward. So, at this point, I think really what we're talking about, Councillor Collins and myself is: do we want, as a community, to accept other communities' waste? We're already into a joint arrangement so we'll be potentially accepting a percentage of Niagara's waste and they'll be accepting part of our waste, as well. Fair enough. We've made that commitment to work together in the two communities. And, I can understand there may be some economies of scale between those two communities. But, we don't want to get into a situation where we're accepting Toronto's waste, or perhaps waste from the U.S. or other locations. So, I think it's very important at this point that we make it clear that it's strictly Niagara and Hamilton that we're dealing with. And, I firmly believe that this is not just a minor point, at this point in time. I think the choice of technology and the size of the technology, the volume of the facility, will be influenced by the Terms of Reference. So, I would ask Committee, Council, to think seriously about that and the implications. It's not unlike what we did at the Hamilton Harbour Remedial Action Plan, where we talked about changing the out-flow of the sewage treatment plant to put it into Lake Ontario instead of Hamilton Harbour. Lake Ontario has a virtually unlimited carrying capacity in terms of accepting sewage - at least compared to Hamilton Harbour. So, that would open the doors for all kinds of additional sewage to be put through the plant, maybe from outside the watershed, outside the City. The treatment could be, could be left at a very low rate, because we're putting it out to this large receiving body. So, it's a point of principle that we're talking about at this point in time. And, I hope Committee of the Whole considers that. Thanks."

McCarthy (as Deputy Mayor and Acting Chair) : "Thank you Councillor McHattie. We have Councillor Pearson and then back to Councillor Whitehead for a moment and then Councillor Braden and Councillor Ferguson and we've got a lot still to go through, so let's get through this as best we can."

Pearson : "Quickly, Madam Chair, I feel that I concur with some of my other Council colleagues that we are tying the hands of Committee and staff right now on the process. I think it's going down the right path. And I'm sure, as what I've heard Mr. Stewart say that we are, you know, the safeguards are in place to deal with this in the future and it will come back to, it has to come back to Council, has to come back to Niagara Council - certainly for any amendments, any changes, any increases. And, I think we're pretty well protected there and I feel that it is premature. We can deal with this in the future when we have more thinks set down on, on agreements. So, I will not be supporting the Motion."

McCarthy (as Deputy Mayor and Acting Chair) : "Okay. Thank you, Councillor Pearson. Councillor Whitehead."

Whitehead : "Well, I hate to do this, but I'm going to call the question."

McCarthy (as Deputy Mayor and Acting Chair) : "That's fine. We'll entertain the question on the Motion. It has been Moved by Councillor Collins; seconded by Councillor - " (hear comment off microphone from someone that there needs to be a vote on calling the question) "Okay, sorry, I'm going to call the vote. I've got Councillor Whitehead for the second time speaker and Councillor Braden for a first time speaker. Councillor Braden are you all right with calling the question on the Motion?" (couldn't hear what Braden said off microphone) "I'd like to call the question on the Motion. I think it's had ample debate. It's been, we're going to call the question on the 3-part motion" (some direction of assistance from Clerk Kevin Christenson off microphone) "Okay, I'm calling the question on eliminating debate and it's been moved by Councillor Whitehead ; seconded by Councillor Pearson . All in favour? Carried . That Motion's carried any opposed? No? Opposed Councillor Ferguson . Now, I'm calling the Motion" (I think she meant to say calling the question on the Motion) "on Councillor Collins' Motion which has been seconded by Councillor McHattie " (Clerk, Kevin Christenson wishes to explain something and McCarthy asks him to speak.) "Go ahead."

Kevin Christenson - City Clerk : "Through you, Madam Chair, I just want to ensure that what Council is voting on is that they are clear that they are amending the Terms of Reference is basically what Councillor Collins' Motion is doing."

McCarthy (as Deputy Mayor and Acting Chair) : "We are now . We're amending the Terms of Reference if we follow Councillor Collins' Motion . All in favour?" (Off microphone, I think it was Councillor Collins that suggested that as the Motion is in 3-parts, that the Deputy Mayor might want to read them out.) "Do you have the 3-part Motion? I don't have it with me. Councillor Collins, will you allow Councillor Ferguson to speak for a moment? Go ahead, Councillor Ferguson."

Collins : "You already called the question, now -"

McCarthy (as Deputy Mayor and Acting Chair) : "I'm calling the question. Is there -"

Collins : "I didn't support it, but -

Ferguson : "Just in process, if the Motion is defeated, can it then be Tabled, no it can't."

McCarthy (as Deputy Mayor and Acting Chair) : "No, if Councillor Collins' Motion fails, I think we go back to the main Motion. Then it's the will of Committee again. Go ahead Councillor." (McCarthy is asking Collins' to read his Motion - which, if passed, as noted above, if amending the Terms of Reference of the project.)

Part 1 of Collins' Motion

Collins : "First of all it's:

• that the selection of the technology for a new facility or facilities will only consider the need to manage residual waste from the current communities of the City of Hamilton and the Region of Niagara - That's Part 1.

McCarthy (as Deputy Mayor and Acting Chair) : "I'm going to ask for a standing recorded vote, just for - Councillor Ferguson go ahead, what clarification?"

Ferguson : "What's 'residual' mean? Residual to me is what's left over." (discussion off microphone by ?? regarding Councillor Ferguson's question.)

Scott Stewart - Director (Capital Planning & Implementation) CPI, Public Works : "Through you, Madam Deputy Mayor. It's the 35% that's left over after the diversion programs."

McCarthy (as Deputy Mayor and Acting Chair) : "Okay, can I ask for a standing recorded vote? All in favour of the 1 st Part of the Motion ?" (Deputy Clerk names off those in favour)

In favour : McCarthy, Collins, McHattie, Merulla, Morelli, and Whitehead

McCarthy (as Deputy Mayor and Acting Chair) : "And those opposed?" (Deputy Clerk names off those opposed)

Opposed : Braden, Bruckler, Ferguson, Mitchell and Pearson

McCarthy (as Deputy Mayor and Acting Chair) : "That's a tie. It loses on a tie? Mary?"

(some male person on an open microphone, not sure who): "6 to 5"

McCarthy (as Deputy Mayor and Acting Chair) : "So it's carried 6 to 5. Go ahead Councillor, your second part of the Motion."

Part 2 of Collins' Motion

Collins : "The 2nd Part of the Motion is:

• that understood that the facility will only accept residual waste from the current communities of the City of Hamilton and the Region of Niagara. "

McCarthy (as Deputy Mayor and Acting Chair) : "All in favour? Standing recorded vote." (hear off microphone someone ask if a motion to table this would take precedence) "No. We're -"

Collins : "We've already called the question."

McCarthy (as Deputy Mayor and Acting Chair) : "I've already called the question on this Motion." (to the Deputy Clerk) "And I'm down, 'in favour'" (Deputy Clerk reads off names in favour of Part 2 of Councillor Collins' Motion.)

In favour : McCarthy, Collins, McHattie, Merulla, Morelli, and Whitehead

McCarthy (as Deputy Mayor and Acting Chair) : "And, those opposed?"

Opposed : Braden, Bruckler, Ferguson, Mitchell and Pearson

McCarthy (as Deputy Mayor and Acting Chair) : "And, Councillor Collins, your 3 rd part of the Motion."

Part 3 of Collins' Motion

Collins :

• "That each municipality would be responsible for managing their own share of any process residues from a new facility that would be the ash created from it's incineration from that process."

McCarthy (as Deputy Mayor and Acting Chair) : "All in favour?" (to Deputy Clerk) "And that would be me, as well."

In favour : McCarthy, Bruckler, Collins, Ferguson, McHattie, Merulla, Morelli, Pearson and Whitehead

McCarthy (as Deputy Mayor and Acting Chair) : "And, those opposed. Those opposed? Those opposed to that? Councillor Braden and Councillor Mitchell"

Opposed : Braden and Mitchell

McCarthy (as Deputy Mayor and Acting Chair) : "And, thank you, Council. Now we're moving onto -" (glass clinks - I think it was Mitchell speaking off microphone - "You need one more member for that committee" asks for volunteer) "Can we deal with that after the agenda, or go to the Clerks Department for a follow-up on that?"

Kevin Christenson - City Clerk : "Well, the question, Madam Chair, the next thing really in order, here, is that you do have the main part of the Motion, here, to approve as amended. Councillor Collins' Motion, as I clarified, amends the body."

McCarthy (as Deputy Mayor and Acting Chair) : "So you want, you want, on the balance of the report?"

Kevin Christenson - City Clerk : "As amended."

McCarthy (as Deputy Mayor and Acting Chair) : "As amended. May I have somebody - okay, Councillor Whitehead, Councillor Morel - Merulla" (actually Morelli - and he corrects) "Morelli" (giggles from Council) "And, Moved and seconded. All in Favour on the balance of the report? Thank you. Carried."

Continue with Part 5, Item # 11 - "MOTIONS"