In this installment, which we hope might be the last, of the “Hydro Files” we will take a look at the Ontario Ombudsman’s investigations in Grimsby, not once but twice, into some “secret meetings” involving hydro matters held by the Town and the secret hydro empire it controls.

As we had discussed in our last post (link here), the Town likes to try and keep secret all it can about Grimsby’s hydro assets.  They have had secret meetings in the past and as we illustrated in our last post, continue to do so… in what we believe to be a contravention of Provincial statutes.

Ombudsman Investigation #1 – Council Meeting – May 2, 2016

At the previous Council meeting of April 18, 2016, Alderman Kadwell brought forth a notice of motion (which was deferred to this May 2, 2016 meeting).  It stated:

“Be it resolved that the Council of the Town of Grimsby hire a chartered business evaluator with experience in the energy sector to establish a business valuation of Niagara Power Inc. and its subsidiaries.”

As far back as April 2016, Alderman Kadwell wanted a proper financial assessment of the Town’s hydro assets, and if you watched the video clips in our previous post, he still has not received one.

This motion was taken up at the May 2, 2016 meeting and Council decided to go “in-camera” (closed session) to discuss the matter, citing that the matter constituted an issue involving:

“security of the property of the municipality, personal matters about an identifiable individual, and litigation or potential litigation”

During the meeting, Alderman Kadwell eventually withdrew his motion… but unfortunately the issue did not end there.  As a result of the meeting, a citizen complaint to the Ombudsman’s Office resulted in an investigation of the meeting.

Ombudsman’s Findings – May 2, 2016 Meeting

The Ombudsman found that none of the cited exceptions applied to the meeting and ruled that the meeting occurred in contravention of the Municipal Act:

“Council for the Town of Grimsby contravened the Municipal Act, 2001 and the municipality’s procedure by-law when it discussed a matter in camera on May 2, 2016 that did not fall within any of the Act’s permitted exceptions.”

As a result several key recommendations were made by the Ombudsman and to be instituted by the Town.  Among them:

  • Members of Council should adhere to their obligations to ensure the municipality adheres to it’s responsibilities under the Municipal Act.
  • That matters discussed in closed session, are in fact, items that should be discussed behind closed doors.
  • The Town should implement audio and video recordings of both open and closed meetings (we are still waiting on this).
  • Closed session minutes be reviewed by Council.
  • The Town should update it’s procedural By-Laws to ensure it’s in compliance with the closed meeting exceptions of the Municipal Act.

The Town was allowed to view a draft of the report and rather than pledge transparency, seemingly gave the Ombudsman a one-finger salute when it comes to the direct issue of discussion of hydro matters in a public forum:

“Through the Mayor and the Town Manager, council submitted that it believes that the town’s obligations under the open meeting rules are, in this instance, incompatible with its obligations with respect to confidentiality as a shareholder of Niagara Power Inc. As noted above, there is currently no exception in the Municipal Act for discussions about confidential or sensitive business information.”

You can read the full Ombudsman report on this investigation here:  Town of Grimsby – May 2, 2016

Ombudsman Investigation #2 – NPI & Council Meetings – November 11 & December 5, 2016

The Ombudsman office received two complaints in regards to the above noted meetings and once again headed back down the QEW to investigate.  The Town failed to provide public notice of these meetings, any motion to close the meetings and failed to make minutes of the meetings available to the public.

Niagara Power – November 11, 2016

An Annual General Meeting (AGM) was held at the office’s of Niagara Power Inc. on the above date, with 8 of 9 members of Council attending (constituting a quorum and thus a meeting of Council), the private Board of Director members and an auditor.

No notice of a public meeting was published, as would be required since this meeting now constituted a meeting of Council.  The Ombudsman further notes that “substantive matters” were discussed and voted on, again without the view of the public.

The Ombudsman found that:

“The individuals who attended the meeting did so in their capacity as members of council. Any business transacted by council as the shareholder of Niagara Power Inc. is the business of the Town of Grimsby. As such, Niagara Power shareholders’ meetings attended by a quorum of Grimsby council are meetings of council that are subject to the open meeting requirements.“

Thus the decisions made were those of Council and should have been held in an open meeting, open to members of the public.  But NPI, the Board and Council saw fit that no public eyes be upon them as they advanced the business of the Town.

On this meeting, the Ombudsman concluded that:

“This meeting of council for the Town of Grimsby was closed to the public contrary to the open meeting rules in the Municipal Act.”


Council Meeting – December 5, 2016

A regular scheduled meeting of Council that evening included a discussion related to Niagara Power Inc. regarding confidential information.  Council did not provide advance notice, nor record minutes or pass a resolution to go into closed session.

Due to the circumstances and subject matter of the meeting, the Ombudsman ruled that this meeting  was not a meeting of the shareholders of NPI nor did it contravene the open meeting requirements of the Municipal Act.  The Ombudsman however did note that:

“this discussion could easily have crossed the line into a discussion about council business, including with respect to council’s role as shareholder.”

Ombudsman Investigation #2 – Recommendations

Following the Ombudsman’s investigation and report, five recommendations were put forward.  Some of them might look very familiar, suggesting that the Town has not actioned them out of the first report.

  • Members of Council should adhere to their obligations to ensure the municipality adheres to it’s responsibilities under the Municipal Act.
  • The Town should ensure compliance with open meeting rules, including when it is meeting in it’s capacity as a shareholder of a municipally controlled corporation.
  • That matters discussed in closed session, are in fact, items that should be discussed behind closed doors.
  • The Town should ensure it provides advance notice of meetings, passes a resolution to go into a closed meeting and records minutes therein during all meetings of Council, including that as a shareholder.
  • The Town amend its procedural By-Law to provide for notice to the public of special meetings.

Once again, the Town had an opportunity to comment on the draft review of the report and their comments are noted by the Ombudsman:

“69 The town noted that it does not want to incur the expense of obtaining an external legal opinion, or spend staff time researching how other municipalities meet their obligations under both the Municipal Act and the Business Corporations Act. The town informed us that it is considering a change to its procedure by-law to limit attendance at shareholders’ meetings to those members of council who are appointed to the corporation’s board.

70 My Office cannot provide the town with legal advice. However, in the report above, we explain that the obligations under the Municipal Act are not incompatible with the obligations of a shareholder under the Business Corporations Act. We also provide three specific examples of other municipalities that have processes in place to meet their obligations under both statutes.”

You can read the full report from the Ombudsman on these series of meetings at this link here.

Rather than take the advice of the Ombudsman to make these meetings and hydro more transparent, the Town once again disregarding the advice of the Ombudsman.

The takeaway from paragraphs 69 and 70 is that the Town wanted to ensure that the public eye (and the rest of Council) would not be able to peer into the details of the hydro companies.  What is interesting is that whomever at the Town suggested limiting the attendance only to those members of Council who sit on the Boards, clearly does not understand how corporate governance, conflict and Board meetings work.

Conclusion

Needless to say, as we mentioned in our previous post… rather than follow a course of openness and transparency, the Ombudsman reports made the Town (namely the Mayor and Aldermen who sit on the Boards) circle their wagons even more…. draping the companies in an even greater “veil of secrecy”.

The recent news that the “appointment” of a shareholder’s representative (to close off information to most of Council and the public) without a resolution of Council is in our opinion, a contravention of at least the Business Corporations Act and perhaps other Provincial statutes.  Even with the Mayor retiring, it appears if that ship sinks he may taking many more down with him.

While we hope this is the last in our “Hydro Files” series, if people do not vote in “fresh blood” pledging to bring some clarity into our hydro assets, history suggests that the incumbents who sit on these hydro boards (Aldermen Berry, Mullins and Seaborn) will continue to operate these entities with little public (or other members of Council’s) visibility and scrutiny.

It is time that light is cast upon this leviathan of hydro companies and the members of Council sworn to protect their secrets.  This may sound all hokey, but ask yourself before casting your ballot, what have these incumbents done to make hydro more transparent?  Rather than be forthcoming with information, all we get are further attempts to suppress it and excuses.

As such, we hope that you “excuse” these incumbents from serving another term at Town Hall when you cast your ballot.