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Update: Jan 29 Council, Jan 30 Committees

This week was a full one for City Council. To learn about what was on our agenda for Monday night’s Council meeting, click here. To learn about what was on the Tuesday committee agendas, click here. In addition to the topics I wrote about earlier, we also discussed Aquatera at Council.

Following are updates to our conversations. As always, any opinions or mistakes belong to me and me alone.

 

City Council

To see the City’s recap of Monday night’s Council meeting, click here. To see recap that gets at the truly important moments, click here.

We passed the proposed Land Use Bylaw amendments, Parks Improvement Grants, and Extended Producer Responsibility resolution.

An item from the Infrastructure and Protective Services Committee got added to our agenda. It had to do with Aquatera. I provide details below. But the short version:

Wembley has asked to be become an Aquatera shareholder and have the corporation take over its water and waste management. To do this, Aquatera needs to have its Unanimous Shareholders’ Agreement (USA) amended. While the USA is being amended to accommodate Wembley, Aquatera asked for some other amendments to be made as well. We had debate about one which would allow it to undertake activity in new geographies without unanimous shareholder consent. In the end, Council voted to approve adding Wembley to Aquatera and agreeing to all proposed amendments to the USA.

 

Background to Aquatera Conversation

Aquatera is owned by the City of Grande Prairie, the County of Grande Prairie, and the Town of Sexsmith. Wembley has asked to be brought in as a shareholder so that Aquatera can take over its sewer and water operations. This requires financing to extend infrastructure. It also means tweaking how the corporation is structured.

Aquatera is governed by a Unanimous Shareholders Agreement (USA). The USA outlines such details as how shares are allocated and how dividends get determined. It also has a list of decisions the corporation is not able to make without all its original shareholders agreeing.

To add Wembley (and potentially other municipalities in the future), this agreement had to be amended. The proposed amendments will allow other municipalities to become shareholders. As shareholders, they will not only receive service will also be able to invest (ie: contribute infrastructure) to the corporation and receive dividends based on their investments. However, any new shareholders would NOT be one of the parties that have to give their unanimous consent for some decisions.

Since we are updating the USA to add Wembley anyway, Aquatera asked us to approve a number of other amendments. Most of these are minor or housekeeping in nature (eg.: updating definitions).

There is a shareholders’ meeting coming up. Our decision on Monday night was whether or not to authorize Mayor Given to vote “yes” to updating the USA and to allowing Wembley to become a new shareholder.

 

The Debated Amendment

No Councillor expressed any concern about allowing Wembley to become a shareholder. Most amendments were also easily accepted by all. However, there was one amendment which created debate. 

The debated amendment will remove the requirement of unanimous consent amongst original shareholders for Aquatera to expand its business and operations into new geographic areas or municipalities.

Aquatera expands its operations for two primary reasons:

  1. Sometimes a community faces challenges that Aquatera can address. In these cases, helping is the right thing to do.

  2. Sometimes Aquatera pursues opportunities for profit to return to the City of Grande Prairie and other shareholders.

When Aquatera’s board and management want to expand to new areas, Unanimous Consent puts up roadblocks. Getting all shareholders in a room and ready to vote takes months and a lot of administrative work. Removing the requirement to get all original shareholders’ permission to expand will help the corporation be more nimble.


Where I Stand

I was the one who stirred conversation up. In the end, I was not persuasive enough and I joined the 8-1 club: Monday was the first time I voted against the rest of Council.

I enthusiastically support allowing Wembley to become a shareholder. They are our neighbour, and this will be a significant help to them. Ensuring Wembley’s residents have easy access to safe water is the right thing to do. Additionally, I am a firm believer that we are better off when our entire region thrives- helping Wembley work more efficiently will have indirect positive spin offs for us. 

I also supported almost all of the amendments proposed in the USA. However, the one described above gave me pause.

One of Aquatera’s mandates is to grow its business to return dividends to shareholders. Many people in our community do not agree with this mandate. Personally, I am ok with it in its current implementation. The City is the majority shareholder of Aquatera, and regional municipalities are the only other owners. Our citizens benefit from Aquatera profits that come from other areas of operation.

I do not currently have concerns with Aquatera’s current approach to expanding its business.

However, I worry about this being an area of concern for future Councils. They may decide that they do not want to see continued growth of the business- that they instead want to see it completely focused on serving our region. This may become especially relevant if Aquatera expands to the point where our region is a small area of its operating geography.

I am ok with Aquatera’s current expansion and do not want to hamper it. But I can see a Council having a different view in 20 or 30 years. I’m leery of us losing our direct veto power to expansion. I think we need to be very, very careful whenever we give up any of our already limited control over Aquatera.

The rest of Council disagreed with me. I do not want to speak on their behalf. But the main argument I heard: while my concern has some validity, we still have veto power over the board. If future Council’s aren’t comfortable with the corporation’s direction, they can refuse to appoint directors who support it. And making Aquatera less nimble now is worth giving up this small measure of control.

I see where the rest of Council is coming from. A conversation we are going to be having repeatedly on a very wide range of topics is “how much control do we hold onto?” Control by our Council is necessary to some extent. But it takes resources to exert and introduces rigidity into processes. In most cases, I support de-centralization and passing down of authority. But in this particular case I just couldn’t quite get there.

I don’t want us to get in the way of Aquatera’s current business plan. However, I feel that there are ways to offer it the necessary freedom to act while still preserving the rights of future City Councils. For example, I would’ve been very supportive of allowing it to expand anywhere in North-Western Alberta without unanimous consent, but requiring it to get that consent to expand further.

I went back and forth on how to vote throughout the weekend. I went into the Council meeting thinking I would vote “no,” but with an open mind. I came very close to being convinced to vote “yes.” So even though I disagree with my colleagues, it isn’t a strong opposition. This change (assuming it is also approved by the County and Sexsmith) will bring benefit, and the risk to future Councils is very minimal. So this was a vote I didn’t mind losing.

That being said, I was also glad to generate debate. Aquatera is something we need to give very careful consideration to. I know there are a lot of frustrations with it in the community. A lot of these are caused by misunderstanding how it is organised, how it works, or how it compares to other waste service providers. But some frustrations are caused by its fundamental structure. Council needs to put a lot of thought into how it interacts with Aquatera. I also think we need to have caution whenever our rights are diluted. Overall, I am thankful for Aquatera and think it contributes both good service and good value. At the same time, it is something that I would like to see worked on. I didn’t want us to authorize any changes to it without having some sort of public conversation and deliberate debate.

This was the first time our Council touched anything to do with Aquatera. I believe I have become as knowledgeable as I could possibly become about it. At the same time, this week I became aware of how much more I need to learn. I already have three coffees and a reading list setup to educate myself further- I’m excited to dig in. As I do, I'd love to hear from you. What is your take on Aquatera's mandate to grow its business and return dividends to shareholders (remember: the City is the majority shareholder and all other shareholders are regional municipalities)?

Bonus link: you may be interested to read this post I created about Aquatera during the campaign.

 

 

Committee Discussions

There are two committee discussions worth updating you about:

Housing Development Corporation

Our discussions about potentially founding a Housing Development Corporation certainly generated a lot of discussion around the community.

We had cursory discussions about this in December. A recent media story caused this to be brought up in a lunch Council had with the Chamber of Commerce Board. The same story also caused many of us Councillors to receive phone calls from the business community. Their very understandable concern was “is the City going to build something to compete with us?”

It isn’t my right or responsibility to speak for Council. That being said, I would be shocked if anyone suggested we do something that would compete with private enterprise. Certainly no one has expressed that desire to me. If we started a Housing Development Corporation, it would very likely exist to stimulate social or affordable housing. Its role would probably be to support private or non-profit groups doing important work, or to take on needed projects other groups don’t want to touch.

I also want to highlight the “if” above. Council is not currently moving forward with this. Right now, Council isn’t even discussing it- just a subcommittee (the Community Living Committee) is discussing it. The committee is not making any steps to found a Development Corporation. Instead, it is gathering information about what one might look like.

A reasonable next step in studying this idea is to have a business case built. On Tuesday, committee discussed whether or not to finance this. We ended up voting to authorize up to $80,000 for a business case. We also directed administration to bring back more information about the Request for Proposal (RFP) before it is opened up for consultants to bid on the work.

I still do not know where I stand on this. I want to have more conversations with our community and with the rest of Council before moving forward. That being said, we estimate that about 600 people in our community have core housing needs and I expect this number to go up as the economy accelerates. Everything in government takes time (and often a frustrating amount of it) and I feel a sense of urgency for addressing low income housing in our community. I don’t want to hold up the process while we discuss.

Administration assured committee that preparing an RFP does not require too much work and is well within the capacity of current resources to do. I voted in support of authorizing spending so that the RFP process can get started and we can have it ready to put out if we decide to move forward. At the same time, I also made it quite clear that my mind is not made up and I may vote against actually opening the RFP to bidding. In other words: I am supportive of us generating more information about what a potential business case may look like, but I am not yet comfortable with us actually paying for one to be made.

Since this is an ongoing discussion, I’d love to hear from you about your thoughts.

Bonus writing: at the bottom of this post, I am including a comment I made on the GP Round Table Facebook group about why spending money on consultants and studies is sometimes worthwhile.

 

Eastlink Centre

I’ve had a few people in the community come up to me and say “your Council is doing a great job with the Eastlink Centre.” My response has been “we haven’t touched it- we just got lucky in that the City made some great hires a few weeks before you hired us.”

At the end of last year, the Eastlink Centre received new senior management. Changes were quickly made, most of them revolving around customer service and membership recruitment/retention. Committee received a report from Jim Weller, the new General Manager. If you have spent time at the Eastlink Centre lately, he is probably a familiar face- I love that he is constantly walking around, seeing what is happening, smiling, and talking to people.

If you haven’t been to the Eastlink Centre lately, this article from 2dayfm outlines some changes that Jim Weller and his team have made. I’m seeing the results they are having: the parking lots are often full, users of the facility seem to be smiling more, and people in the community have stopped me to say they like the direction the Eastlink Centre is going. Additionally, Jim reported to committee some of his plans to find operating efficiency.

Two numbers stood out to me throughout our committee meetings:

  1. The Eastlink Centre is back up to 6102 members

  2. In the Corporate Services Committee, it was reported that the Eastlink Centre was about $1,000,000 over budget as of November 30th. This is a big number that is disappointing. However, in June that number was closer to $1,500,000. Additionally, in November new management had only been in place for a few weeks and many of the changes had not yet been made. We were also told that January looks like it will have record breaking revenue numbers. So the numbers indicate that this facility is on the right track.

If you haven’t been in lately, I’d encourage you to checkout the Eastlink Centre. Until February 15th, you can even get a free membership (it now includes use of the Flowrider and Playcare- leave your kids behind and go for a surf!). Details are here. Just be careful- it looks like a lot of two week members are converting into paying members. But that isn’t too much to be scared of since you can now pay monthly rather than needing a huge lump sum.

 

Financial Update

The Corporate Services committee received a financial update about the state of the City budget as of Nov 30, 2017. It was largely good news with a projected surplus of $2.6 million.

Across the corporation, departments are looking for efficiency. We had a few efforts highlighted for us. A standout was the fire department which is projecting a surplus of $715,000. One way they did this was by bringing training in-house rather than sending their people away for training: this saves approximately $238,000 over the year. Over the past year, the City corporate structure has experienced a number of significant changes. I know our staff are working hard to be efficient, and I am excited to see some of the changes they make.

A few people have asked me: “why does the City always run surpluses- shouldn’t it just always budget the right amount?” The reason: under provincial legislation, municipalities cannot have deficits. And an annual budget for something of the City’s size and complexity will never be 100% accurate. If we were being as accurate as possible with budgets, we would have some years where we come in over budget and some years where we came in under (but would theoretically average out to a 0% surplus/deficit). However, years where we were running a deficit would cause significant problems: in the final part of the year we would need to scramble to cut services and programs to finish in the black. This isn’t a healthy way to run a City. To avoid this problem, budgets have conservative revenue projections built into them. Municipal governments typically budget their spending as accurately as possible while building some safety into their revenue estimates.


Those were the discussions I thought worth highlighting this week. But if there was another topic you wish I had unpacked, just let me know. I welcome any thoughts, feedback, or questions.

Thanks for being engaged!

-Dylan


Bonus Facebook Comment

On the GP Round Table we had a discussion about hiring consultants to build a business case for a Housing Development Corporation. I thought I would share this comment about why we sometimes pay for this type of work:

“Governments at all level undoubtedly waste huge amounts of money on studies and consultations. This is unacceptable. That being said, I think the waste comes out of poorly defined and un-needed studies or from ones which get ignored. It doesn't mean that every instance is waste. In fact, NOT doing them can be very penny-wise/pound-foolish if it leads to ill-informed decisions. Bad decisions can cost exponentially more money than planning while leading to poor outcomes.

If I ever have a house built, I have all sorts of ideas about what I want included from being in other homes. But there is no way I should general contract it. I don't have the time, experience, or necessary connections with trades...

...if Council finds a model it wants to copy, there will be tonnes of questions that need to get answered. Some of a much larger list: is it legal given current legislative framework? How much will it cost? What are some funding methods beyond drawing from our general tax revenue? Is it fulfilling an actual need in our community? Is it fulfilling that need in an efficient manner? Is it competing with other local initiatives in a detrimental manner? Is it something people in our community actually support? What is a realistic timeline for implementation? For municipalities that are currently doing it: is it successful, why is it successful, how could it be better, what do they wish they had done differently? Are there municipalities that tried it and ended up cancelling or dramatically changing it, and if so what pitfalls did they hit? Fully answering these questions (an dozens more important ones) takes a lot of time, a lot of resources, and expertise from multiple disciplines.

Those are all questions that I am sure we have people in the corporation capable of answering. That being said, there are two limitations to using City employees:

1) They likely have zero experience and few existing contacts to draw from. When you hire out, part of what you are paying for is knowledge that has been cultivated outside of our corporate structure. It is all fine and dandy to have our people research what is helping elsewhere and to make cold calls to ask about it. But there is also an important place at the table for people who have actually worked on what we are looking to do and who already have cultivated relationships.

2) [Theoretically and hopefully] City staff time is already completely consumed by other important tasks. We aren't big enough to be doing enough studies to have full-time employees dedicated to them. In fact, I'd actually be concerned if administration came to us and said "we have staff who can pivot right now to undertake a months long assignment that will consumer a huge amount of their time." My question would be "ok, so then it sounds like they aren't doing anything too important right now, so why are we funding their position?"

As for hiring out-of-town firms: we have no choice in that. Legally speaking, we can't take location of a firm into account when awarding contracts- that is a great way for the City to get sued and waste large amounts of money on a legal battle and penalty. We don't control this framework that we need to work under. That being said, it also protects Grande Prairie firms if they bid on work in other jurisdictions.

I don't want to rush into commissioning third party studies. I want to make sure they are answering pertinent and focused lines of questioning. I want to make sure Council is ready to act on their recommendations. And I want to make sure that they are undertaking work we truly don't have current corporate capacity to do ourselves. But I do think that there are times where they are crucially needed.”