Jan 19/05 Report
1:35 pm - 2:16 pm

Members:
McHattie (Chairing), DiIanni, Mitchell, Bruckler, Braden, Whitehead (in late 1:48 )

Non-Members:
Ferguson , Bratina

Staff:
Peace (City Manager), Rinaldo and Tollis (Finance), Coveyduck (Planning), Kay (Emergency Services)

Press: None

Future Fund Board Members:
Paul Shewfelt, Tom Atterly, Brian Henley, and Greg Hoath

Agenda:
http://www.city.hamilton.on.ca/clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2005/Jan19/Agenda.pdf

Presentations:

7.1 Hamilton Future Fund Board of Governors
(Referral of report by City Council at it's meeting held on December 15, 2004) http://www.city.hamilton.on.ca/clerk/agendas-minutes-reports/
council/2004/Dec15/Item%205.5.pdf

Presentation:

Greg Hoath : (tape begins in mid-sentence) ".obviously functioning as a Board of Governors. I won't go through them all but they're all listed there (referring to a list in the report of Council-approved recommendations since 2002 that have affected the Future Fund), there's approximately twelve. Some are substantial, and others, as I say, are not so substantial, but for us they were done without any role of the Board of Governors. We certainly understand that Council has the ultimate responsibility; we've never lost sight of that. And we certainly understand that we're a recommending body, but we were established, and we do have a function. We want to express our concerns, not only the .money that's been allocated, but also the timing and manner in which it's been allocated and certainly approved along the way. Again, there was a specific example provided in our report as well which was concerning the solid waste management plan. Now for us certainly that's something that I don't think anyone would argue would be a legacy for the City of Hamilton , and it certainly was a huge project. But there was some confusion when it came to the Board of Governors for consideration, and then certainly a communication back to Council through staff, and then ultimately Council's decision with regards to that project.. And that's really what brings us here, because communication seems to be - for us it's been an issue. The Board is certainly committed to.creating a permanent legacy for future generations of Hamiltonians, and we believe we can achieve this with open and transparent dialogue with Council and staff. And certainly with you receiving the recommendations, and us receiving the necessary information in quarterly reports we can achieve that. Just as a final comment - you have before you the recommendations and we certainly are respectfully requesting that you adopt those recommendations - and we want to also emphasize the need to communicate achievements , certainly the achievements the City of Hamilton's made with regards to the strategic allocations of the Fund money, whether we're talking about waterfront trail, or even the most recent announcement, certainly with the biotech plant - the Camco site. That $5 million as you recall was an allocation that Council made that was recommended by the Board of Governors.. We think we need to continue to communicate what we're doing with that money, and we need to start the communication obviously between the Board of Governors and yourselves. And again, we believe that those accomplishments wouldn't have been possible without keeping in mind the mission statement and the principles, and that's certainly guided us in our decisions and helped to guide Council, I'm sure, in their decisions. And so, we ask that you consider these recommendations and thank you for your time.."

Discussion:

Ferguson (who is one of three councillor representatives on the FF Board) : ".At the risk of putting words in your mouth.did the Board, at the last meeting - a couple of days ago - do you think that members come away from that feeling better in terms of communication.?" Hoath: "Yah, absolutely. I think the report that came to us from staff certainly addressed some of the concerns that we've had. It we felt that's exactly what we were looking for - is the beginning of that communication so that we have an opportunity to make some recommendations to Council. Certainly the budget deliberations are.and obviously this money is part of the budget deliberations, so. Yah, we're encouraged by what we see and that's what we want to continue". Ferguson : ".Joe (Rinaldo) is committed to that, right?" . Rinaldo: "What we've attempted to do, quite frankly, is clarify that. What I did this year, is even before I submitted the recommend - the presentation that Glen (Peace) and I did to Council in terms of the proposals on the capital financing options, I did advise the uh, I sent an email to all members of the Board of Governors advising them those are options that are in there for their consideration. So we are committed to better communication. Unfortunately there was a bit of confusion at the end of the process last year. (Recording not clear).I read it if they were endorsing it, and.unfortunate, I made it - I forgot about the additional report. You may recall during the month of March.Council - and April - asked us for a lot of additional reports for you to deliberate on your budget, and the capital budget staff, quite frankly, were swamped with that. But we've undertaken that we will do that - we will provide the reports on a quarterly basis. Last -in fairness, in the past the Board of Governors did not meet on a quarterly basis so we provided reports whenever they met. But, with, and I, and I def - in having them in advance is obviously one of the things we're committed to do. So, hopefully we've started on the right foot this year and we'll continue, and uh, we're going to make it clear, though, that we want from the Board recommendations so that they can. - whatever recommendations - that Council will consider before you deliberate on any of the capital budget options that you're dealing - deliberating on for the 2005 capital budget process". Ferguson : "Well Mr. Chairman, I think that the Trustee of the Board is absolutely aware that it's Council's discretion. They just want to have input into it, and I think that as a Council we want their independent, third party appraisal.."

Bruckler: "Not having benefited from being closer to your group as perhaps other councillors, but I certainly concur with all the recommendations.. What we have here is a failure to communicate, so any improvement that we can gain is bound to be beneficial. Just with respect to recommendation (d), so that - I think that Joe's said that he has made you aware of the kinds of options that are.within the 2005 budget, recognizing that, you know, we talk a lot as we move through that budget process, and all of a sudden.we want to make recommendations and approve the budgets. What kind of a timeline do you require.from the time Council approves.and passes along to your Board?" Hoath: "I think to some degree what the staff is certainly trying to do.. Certainly the Board is aware of some of the pressures where money is required. We believe that a lot of these issues, if they came in a report to us we could make a recommendation that you could consider when you deliberate. So we see that, you know, there's probably nothing that would be a big surprise. And staff is certainly committed to providing us those details, so we can consider and make recommendation before you".

Mitchell: ".Communications is a key as is our many differences that we come to the table with in this new amalgamated city. And I'd strongly support the Board of Governors in managing this money in this fashion so that it doesn't accidentally disappear.protecting the funds that are there and getting the community more involved. On the outstanding business items list.item E. says 'The use of the Future Fund in the event of a Departmental crisis. Referred to Committee by Council'. What does that stand for and has that been talked about.and can we take if off this list?" McHattie: "Mr. Rinaldo, can you help us?" Rinaldo: "I was hoping Mary (Gallagher, Clerk) was going to take it, but she's obviously looking at me. What we have to do is go back in the records and find out what that issue is. Again, in that example, if there's a staff report that's coming forward, before it comes to you we would prefer to.to the Board of Governors and ask for their input and make a recommendation on that matter, if in fact it goes before Council. So, I don't remember the specific item but we'll chase it up and again uh, uh, at one of the quarterly meetings we'll bring that forward to them first and come back to Council with not only the staff recommendation, but also what the Board of Governors recommendation is on the matter. So that would be the process we would follow".

Mitchell: "Ok, thank you for that answer. And then under 'Guiding Principles' I support all of them, but I have a question on the last one: 'Fund Management should be transparent and include community consultation'. I'm assuming something so I'll ask the question. I.believe that Board of Governors has a constitution - as how they elect people, when they transfer on and off the Board, how you keep more people involved on it, is that the term of Council, how you apply to be on it, all these good questions of transparency because if this is going public like this I'm sure somebody's going to be asking and we don't need any more - Hamilton doesn't need anymore - perceived problems than they've already got perceived. So I'm just trying to protect everybody here and maybe. So there's my question.how is that changed, and when, and how do they apply, and through whom, and so on and so forth? Has that been discussed? I hope there's a constitution for the Board of Governors". Hoath: "Let me answer as best I can. The Board of Governors was established - it was the original Trustee Panel that dealt with the spending of the funds and split model. And then with the new current Council, it's my understanding that you approved the same 13 members as the Board of Governors, and then Council elected or appointed the representatives from Council.. As far as a constitution, no, I don't believe that there's a constitution per se. And my understanding is that it was for a three-year term and unless somebody knows differently from me, (laughs) that term is up in 2005". Mitchell: "In light of that, there probably needs to be more clarification and some more important work done on some kind of two page document that says this is who the members are, this where they come from, this is how they apply, we want to transfer and bring on say, three out of twelve new ones every term of Council, or something, to create some kind of new blood - there's all these good things defined in some simple document - not a legal thing that takes 25 pages, two or three would be appropriate, I think, and get together and deal with that at one of your future agendas would I think be quite.. Hopefully that can get done. And I'm sure a lot of the members are aware that it ought to be done, so it's just a matter of putting it on paper so that there's transparency and everybody understands.." Hoath: "And as I say, there was a process.with the original.Council .the continuation or extension of the Board.but I understand you asking". Mitchell: "I know that Greg. And that was the simplest way for that point in time. And before the next term of Council we'll iron these things out.."

DiIanni: ".I just want to make a couple points, rather than ask questions, for the members consideration, and to maybe address some issues.. We started by talking about communications, and always where there's an issue or there's some concerns, communications fits into it somewhere along the line, and we did not do a good job communicating both to the Board - the citizen members of the Board - and the members of Council that came on when the last term ended. And so we had some frustration. And I'll confess publicly that some of the Board members were not only frustrated, but somewhat disillusioned as well. About the level of communication, what their role might be, what their mandate might be going forward. And the reason for this report being here is to alert all members of Council about the existence of this Board, remind all members of Council about the mandate Council had given the Board, and wanted some direction as well in terms of continuation of that mandate. So, I think that after many, many meetings, as Councillor Ferguson indicated, there's some level of understanding with the Board that what they're being asked to do, if approved by Council, is what they're going to do. So there isn't a constitution per se, but there's certainly some terms of reference that Council put together that guide the Board. I believe - we call them terms of reference in fact, and I'm looking for some nodding (Henley and Shewfelt nod).. The committee hasn't talked about - that's a good question that was raised, in terms of succession planning and.. And it should be talked about because that's part of good governance to talk about that. But frankly we've been so mired in some confusion about what we were doing currently we really haven't looked at the future, and if we can straighten this out - what's happening now - I'm sure we'll put on the agenda the questions that have been raised.

Just for the sake - because a number of people are new Councillors.not to bore people.. We received $137million as a result of re-capitalization of the Hydro assets. .And the previous Mayor and Council felt that rather than take just take that into revenue stream maybe we should try to set up some kind of permanent legacy for the community, and see this fund grow, hopefully over time, and be used for legacy type projects. And the decision was, by the last Council, that we establish a community panel to sort of guide Council - provide Council with some advice on which projects might form this legacy. And that's what happened. And the first term was most exciting because we had $137 million, and the decision was to bank $100 million and use $37 million towards some projects, and allow the $100 million to actually grow, so we'd always have $100 million, hopefully $137 million, to work with going forward. And there'd always be some money to do some really innovative things that our usual budget may not allow us to do because they might be perceived to be beyond affordability and so on. And it was kind of exciting because there was tremendous involvement 'a' of the community, and then 'b' through the Trustees. But the community at large came forward with projects on how to spend some of the $37 million - we had Conservation Authority, The Art Gallery, and the list goes on. And Council at the end of the day decided on a number of proposals that would see the $37 million used. And it was really exciting cause we actually had some money to spend and there were projects to carry forward and we actually made up- and that's before you - we actually came forward with a list that had significant buy in. Camco is a good example, the YWCA, I think YMCA as well, there were a number of projects that will impact the community in fact for many, many years to come.

And then of course we ran into some budget problems ourselves. And this is where, as Joe (Rinaldo) indicated, we sawed off some of the interest from the community fund as a way to help out some of our budget woes. And we were in such a rush to fix our budget problems that we didn't communicate well with the Trustee Panel. And that was wrong. It was not intentional, and I think the Trustee Panel understands that. In fact there was some miscommunication even during the process because we thought our report would go back - anyway, it was nobody's fault, it was everybody's fault. And the Trustee Panel was actually very hard on themselves, asking the question 'should we have done more, should we have asked more, should we have done things differently to make sure the communication wasn't improved' - there was some internal communication as well that needed to be fixed. I say that just as a way of background, in terms of why suddenly there are issues that need to be addressed that have not been addressed because we were in that state of flux.

Through it all, no one resigned from the community representation. Some people attend better than others, and I would say that most people attend very, very well, some better than others. But nobody resigned. And everybody was interested in working through the issue to make sure that there was a continuing contribution by the community Board. And Councillor Ferguson was great as a representative of Council in connecting and trying to help out the communication was very, very good. Tom Weisz is the Chair and was very good - he understood the financial issues and helped us. And we - and staff was very good as well. We did get some professional advice from money managers and I think we retained somebody to help with banking the money, making sure the interest would flow..

So where are we? We're simply at the stage right now where Council has to make some decisions. And I had a chance to talk to not only the Chair and to the group, when we met as a group, but also to some of the more vocal concerned citizen members - one of whom is holidaying in Cuba I think right now otherwise he'd be here (Bill Manson?) - who really asked the question of me.to convey to Council 'what do you really want us to do? If you want us to dissolve because you've got some other needs for the money, tell us now. If on the other hand, you see a role going forward along the lines of this mandate now's the time for you to tell us..' And he couldn't have said it - and you know who I'm talking about, members of the Board, I think. - but he couldn't have said it more eloquently in terms of wanting a role, but only if Council wants the citizens to have a role. The last thing that any of the community members want is to go through a process that really doesn't have meaning for them and might be a distraction, or meaningless for members of Council. They understand that Council makes the decision, but within that if they're given a role to play, then we really should mean it and should stick to the plan. And I think I've been capturing accurately the sentiment that was expressed. And so that's where we are, members of the Committee. This is a committee that will report to Council. .We've tabled a document. They do see a role for themselves. It's articulated in the mandate.but now is the really time to tell them differently if you want to.. I hope we stick to the plan. And I do see the long-term benefits to having a legacy fund. I mean some of us envisioned an Alberta type fund. - a heritage fund.- (but) financial pressures are what they are, and we need to be realistic about that and I think the Community Panel does as well. But I do see a role for this and hope that we can.but now is the time to speak.. Thanks Mr. Chairman, sorry to take so much time".

Whitehead: "The five minute rule still in order?" McHattie: "It is for you Councillor Whitehead". (General laughter and clapping) DiIanni: "I think there's a rule about phones that I broke as well". Whitehead: "I had actually the opportunity to attend a meeting of the Board of Governors, and actually it was at the time when this was sort of breaking in regards to what the role is relative to some of the issues that are coming back in Council. And my observation is we have some great representation on that committee, in spite of Murray Ferguson being there (laughter). It's a great committee, and very diverse. And I could see that there was some trepidation or anxiety in regards to what their mandate was.and I can't expand any further than what the Mayor has talked about. .I look at this recommendation in front of me and I'm 100% very supportive of what is being proposed. And I just ask those members to hang on as long as you can, because I think each of you bring something to the table that's unique in perspective. And I also understood the history in regards to these funds. I think it's more.our future.but that's another story. The reality is that I want to support the original mandate in respect to.. I .will not deviate from that responsibility, or at least that position. .If we can continue doing our operations and applying efficiencies and addressing the challenges of Council, that's a role that we have to play. And from my perspective I pretend that the money's not even there. .I don't want to erode any leverage that those dollars provide.. So I want to support the recommendation.."

McHattie: ".If I could ask Councillor Braden to take the Chair for a few moments, I have a few comments. I would share the comments from the Mayor and Councillor Whitehead and other councillors, so I won't go through those kind of comments again. I just have a question for Joe, if I could. .With the 2005 budget discussions that we're going through at the moment what -if you just outline, we know a little bit so far - but what use of the Future Fund are we suggesting? And what kind of communication have we had with the Board of Governors on the most recent use of - suggested use - of the Fund?" Rinaldo: ".What we did is two things - I did two things this year. One's before we made the presentation to Council on Dec. 8 th I provided a heads-up to the Board of Governors - I sent them all an email - advising that Council, under the capital financing there's two options, one with and one without the fund - and in our report there's no recommendation at this time, we're just putting it forward and showing the difference. The other thing we did is we sent out last week, and we had a Board meeting this week, and we walked them through - we made a presen, Joe Spiler and myself made a presentation to the Board of Governors explaining how we're - that we're proposing to utilize about $37 million - on a loan - borrow with payment of interest and .. They've asked us to give us - give them - some additional information on the pay - the option on that basis, looking at a couple of other options for them before making a decision on that. On February 11 th , which is their next meeting, the Board of Governors will give you the recommendation from them as to what they s.. - what, in fact, they would support, and that will be tabled at the same time that we deal with the capital budget, so you will know what their recommendation is. You will also know what staff's recommendation is in terms of those options. So we've made every effort to communicate - to ensure that they were advised well in advance in terms of what options are before Council on that. So in the resolutions that are before you will ensure that we do that for all matters, including the situation like if - the only dilemma we will have is at the very last minute if Council decides to want to use the uh, Future Fund, and I think we're making a commitment to this group that before you do that, you know, you may decide.to do something else over and above what staff recommend, so what you're making a commitment is that before you do that you will consult with the Board of Governors. In that case they would have to call a special meeting to deal with it. So, I think we tried to rectify the communication issues that we had last year, and uh, I hope then maybe from my impressions of the meeting, and Greg and the Board can tell you, I think that's the type of information they wanted.. And I think the Mayor was very helpful to explain to the Board of Governors that they can put it in a formal resolution as opposed to just on an ad hoc basis - it's clear, it's much uh - so Council knows what the position of the Board is". McHattie: "Well, thanks very much Joe. That's what I was hoping to hear, that you've gone through that process, and I think going forward that sounds like that might help a little bit. And I look forward to the frank response from the Board as to that request, and how it gets into the mandate that we've got in front of us here this afternoon and how that works.

Mitchell brings up the Niagara-Hamilton Waste Plan project as an example of a project that might qualify for FF monies. "My question then is, if we wanted to - if the (waste) system wanted to - borrow the money that makes that system sustainable, going into something that benefits the whole city - and the province and maybe the country, who knows - and that money can be repaid from revenues, to that Fund, is that a typical example, going into the future, of what we can do? .I'm looking at these guiding principles, and I'm thinking that is one overall great big project that we need, with revenue coming back.with the right proposal presented to the Board". . Rinaldo: "The uh, .that's exactly the type of project what we - that the Board wants to do is put it in advance before you consider it, so that if they - if it.stage, if we get that kind of information, that we would present it to the Board - present the business case to the Board showing how the flow of funds would come back with interest, and uh, they would entertain it and it will be up to them whether to make a recommendation on whether or not they support it, uh, to the, they would make a recommendation to Council whether or not they could support that initiative as one to use the legacy funds. So, that's uh, that's actually what we would do, uh, on that situation. As you know we're doin that on the Waste Management Master Plan. That's where we're directing the - we're borrowing the funds on a temporary basis.starting in 2008, 2009". Ferguson : "That's the intent, Councillor Mitchell, that's the intent - to keep the thing self-sustainable, regenerating". Mitchell: ".That's good news.."

Ferguson : "There's a couple of other things I'd like to relate to the committee. Of the 137 (million), right now, in the bank, today, there's still 144 (million). We've got 11 million dollars spent on projects, so, .that's still very much intact. Some of the things that the committee should be aware of .almost every meeting.delegations that have ideas - recent ones Farmer's Market, Giant's Rib. We're constantly receiving delegations. .Would it be any benefit to the committee today if I read out the names of the people that are on the Panel?" (Answer inaudible)

Motion on the recommendation moved by Bruckler and seconded by Mitchell , and it is CARRIED.

(Many people start to leave the room now, including staff, the Mayor, some councillors and the FF Board .)

General Information:

Bruckler wonders if the Trustee Panel's mandate would include taking a role in Hamilton 's upcoming review of the Ontario Elections Act, as was suggested that morning in a meeting of the Corporate Administration standing committee. Hoath says that they did something not unlike that when they were asked to comment on Councillor and Mayor's remuneration policy.

Mitchell announces that the District Health Council had been disbanded and requests Council forward correspondence to the staff and volunteers in appreciation for the work done by the Health Council and the role they have played within the community. The Clerk advised that a formal resolution to forward the correspondence will be made at City Council.

(By now only the Clerk, committee members McHattie, Bruckler, and Mitchell, and non member Bratina (and the CATCH reporter) are left in the Chambers.)

Mitchell : ".Under Item 'D' (on the Outstanding Business List at the end of the Agenda) it says 'Area Rating Tax Policies', and it suggests that 'Staff to explore phasing out of area rating'. At Council we come back with recommendations that say 'give us more ways to area rate. So I'm just wondering where we stand with this, because why should staff be given a whole lot of work on phasing out area rating, when the reality of the city is that it needs area rating, or there will be a massive rebellion or revolt. And we've never had that discussion, but to give staff direction to present stuff on one side and then from another committee have direction to present it another way, rather than have our staff do too much work maybe we should have a workshop or debate on it officially or something, because this is just an ongoing tug-of-war here that is got to be solved. I can't have that (area rating) lost, I don't think the city can, and more power to anybody who thinks it can be taken away. That debate needs to be had so we don't keep working our staff hard". McHattie: "Councillor Mitchell, we've lost our staff. I was wondering - certainly I was just going to mention that we don't have time lines on some of those issues. I was going to ask staff to place time lines on these issues, but perhaps we could go the next step but perhaps we could go to the next step and ask for a little update, whether by email, or perhaps put this on the agenda for the next meeting". . Bruckler notes that Item B on the outstanding business list is no longer relevant, and ( despite lack of quorum half plus one = 4 ) a motion is made to delete this item from the list. Moved by moved by Councillor Mitchell and seconded by Councillor Bruckler.

Meeting adjourned at 2:16 p.m.