Guest Column: The City of Medicine Hat’s ‘business’ is every resident’s business

By Medicine Hat News Opinon on September 18, 2019.

Re: “We have a right to clear answers from councillors, bureaucrats,” Sept. 7

I take Mark Oxamitny’s letter as a challenge to share what I learned from two terms on city council.

First, the Ernst and Young recommendation to sell Natural Gas & Petroleum Resources came prior to my first term on council. The billion plus that our city might have gained looks good in hindsight. I recognized even then the liabilities implicit in the oil and gas “business” tied to future abandonments.

The golden goose is dying if not dead. But oil depletion is not far behind.

Did I ask questions? The mayor can confirm that I was frequently the first to question in both open (public) and closed (confidential) meetings. Did I get answers? Well, maybe.

When the mayor was chair of the energy committee he strongly advocated for the city to “diversify” from natural gas interests into oil. He was, after all, an investment counsellor then. The COO sent our shallow natural gas specialists into the market and came back with a proposal to buy the Manyberries oilpatch.

Prior to a decision by council, I asked if an environmental assessment had been done. The response was yes and there were no problems. This at a time when the Canadian Wildlife Federation was challenging the federal government to enforce the protection of an endangered species, the sage grouse, and end development in the Manyberries area. Profits for Manyberries hinged on further exploration and development.

My question highlighted two important learnings for a newbie councillor. The first was that council’s decisions are only as good as the advice and information it receives. The COO had coyly reminded council, “No risk, no reward.” Nobody said, “Don’t speculate with city funds.”

The second learning was that the city owns actual business ventures. Members of council are the board of directors for real companies. And, most important, many “business” decisions are confidential. Violations of confidentiality may subject a councillor to a lawsuit.

Discussions about these “business” assets are largely held in closed meetings. Final financial decisions must be approved in open. Decisions, especially in oil and gas, are strategic and need shielding from competitors. Production stats, investment opportunities, market realities…all influence council’s “business” decisions. A budget for drilling needs open approval. But the decision where to drill and successes are confidential as are decisions about electric generation markets and land development and tax-break incentives.

This explains why public accountability is often blurred. The Municipal Government Act is clear on two points.

First, the business of the city is public service. These Medicine Hat “business” decisions go well beyond water and sewer or public transportation. Community Development and Public Service.

Second, the MGA dictates that city council’s proceedings must be transparent. In this regard, there is a clear conflict. It is the reason Edmonton and Calgary moved their utility “business” interests in Epcor and Enmax out of city government and into publicly traded, arm’s length, corporations. The decisions effectively shared their utilities’ profits, but also the liabilities and losses. Medicine Hat is the sole owner of all its utility assets.

The consequence is the public perception that much of city council’s work is completed behind closed doors. This perception is justified. Short open meetings, and often unanimous council decisions in open, reinforce the perception and damage public trust.

But here’s the point I share with Mr. Oxamitny. All council decisions are accountable to city residents, the shareholders in city “business.” Yes, we benefit from profits. But, ultimately, we also are liable for all losses. Long term, these could be substantial and influence our tax rate responsibilities. We have a right to know.

In a publicly traded corporation shareholders can attend AGMs where profits and losses are fully disclosed. CEOs are accountable. Corporate directions are approved. At the City of Medicine Hat this vital accountability can be masked by complex and dense quarterly reports that few residents – even councillors – take the time or make the effort to unravel.

The recent NGPR announcement may be the first of what may be many holes in the city’s cone of silence. It’s about time.

The writer is a two-term city councillor, serving from 2010-2017.

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