Monday, August 20, 2007

Second thoughts on CityWest?

CityWest the city owned telephone, cable and internet provider is finding that the process to incorporation is a rather slow and somewhat secretive one. The Daily news featured the latest developments from the Third avenue communications company as it misses a dividend payment, neglects to hold required annual meetings and raises the flag of interest of at least a few folks in town.

Considering one of the goals of the current city council was a more transparent form of governance, the current debate over the state of CityWest is proving to be a bit more of a challenge that residents might have hoped for when incorporation was first suggested a few years back.

One Prince Rupert councilor is concerned that the city is beginning to lose control over its telephone company. At last Monday’s city council meeting, Councillor Joy Thorkelson expressed her fears that the changes to the articles of incorporation are providing CityWest with too much power to be placed in the hands of its directors and reducing the city’s control over the telephone, cable and internet provider in the city.

CityWest has always been high on the radar of local citizens and now with its expansion to points east of Prince Rupert through its past purchase of Monarch Cablevision there are many in the city feeling that they are losing their grip on the long time Rupert institution.

With its expansion into the Cable world, Citywest borrowed 23 million dollars to purchase the Cable provider and skipped its annual 2 million dividend payment to the city of Prince Rupert for 2006. The city says that the company will be playing “catch up” on the payment over the next three years.

The Daily News provided an examination of the issue including the concerns of Councillor Thorkelson as the headline story in Friday’s paper.

Board of Directors given too much power for councilors comfort over the city’s long time cash cow
By Christian Webber
The Daily News
Friday, August 17, 2007
Pages one and three

City council is seeking a legal opinion on whether or not CityWest directors can make their own appointments to the board and get off council’s leash.

City council adopted new articles of incorporation for the city-owned telephone and Internet utility on Monday, but not with total comfort they would still retain control of the company.

“I think that the articles of incorporation give far too much power to the directors and take way power from the city,” said Coun. Joy Thorkelson.

“Mainly it has to do with replacement of directors and directors picking their own replacements and I disagree with that.”
The clause of concern is the article of incorporation states that if the shareholders, ie. The city, do not move to fill vacancies on the board of directors, the board of directors may move to fill those positions.

While Coun. Tony Briglio pointed out that the hammer still lies with Council – ultimately if council wants they can replace all the directors on a moment’s notice – city council agreed to get a legal opinion on the clause.”

“The directors have enough power to appoint themselves, and I think that the only people who should be able to appoint directors are the city,” said Thorkelson.

Maintaining control of the company that has long been the city’s cash cow was on of the top two concerns expressed by the public when the city first proposed incorporating CityWest in 2005. CityWest used to operate as a department of the city and the city receives a $2 million dividend from the company each year.

Since CityWest incorporated, and borrowed $23 million to buy Monarch Cable, city staff said it skipped the payment in 2006 and will be playing catch up on that payment over the next three years.

Despite concerns, council signed off on the articles as they stand because to interim appointees have been waiting six months to become full members of the board.

“What’s happened is we have directors that council has appointed but haven’t officially been able to act as directors because the articles of incorporation hadn’t been passed by council. If it didn’t happen last night it would have taken another six months,” said Thorkelson.

According to the articles of incorporation, of the seven members of the board, one must be a senior manager at the city and three must be residents.

“To ensure that everybody is comfortable, we are going to set up a time in the next few weeks with a lawyer and go through those concerns to make sure that the language properly addresses the concerns that were raised, and if necessary we’ll make changes,” said Prince Rupert Mayor Herb Pond.

Meanwhile, the CityWest board currently lacks a chair as former Bill Belsey is leaving town.

Pond said the new board chair is currently unknown, however the board is expected to make that selection soon.

“It’s up to CityWest to announce, it should be soon since they just passed the new Articles at the Council meeting,” said Pond.

The Daily News
Friday, August 17, 2007

Page three

Despite promising the taxpayers they could have input and information on CityWest through annual general meetings, neither the company’s board of directors, or its city council shareholders have called a meeting in two years.

The company was incorporated in the summer of 2005 and according to the articles of incorporation, needed to hold an annual general meeting 18 months after that date.

The city can defer the meeting under the business incorporation Act, however they are supposed to hold an annual general meeting once a year.

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