December 9, 1998

To:Economic Development Committee

From:Chief Administrative Officer

Commissioner of Economic Development, Culture and Tourism

Subject:Board Composition for Toronto Economic Development Corporation (TEDCO)

Purpose:

This report responds to a request by the Economic Development Committee for a status report on the review of the governance structure of TEDCO and recommends a process for filling the 3 vacancies on an interim basis.

Funding Sources, Financial Implications and Impact Statement:

There are no financial implications.

Recommendations:

It is recommended that:

(1)Council confirm the attached amendments to TEDCO's By-Law No. 1 and By-Law No. 3 as passed by the Board of Directors on April 14, 1998 to set the term of Council Members on the Board of Directors at 18 months as requested by the Council of the City of Toronto;

(2)the study of the role, mandate and composition of TEDCO's governance structure currently being undertaken through the Task Force on ABCs by the Chief Administrative Officer be coordinated with the study requested by the Economic Development Committee on TEDCO's future and potential future role in the City of Toronto's economic development strategy;

(3)in the interim, the seven incumbent board members continue to serve on the board and the three vacancies be filled by Councillor Brian Ashton as Chair of the Economic Development Committee and two citizens nominated by the Mayor;

(4)once these appointments have been made, the Board of Directors elect a Chair from among its voting members and the President of TEDCO would be a Director ex officio; and

(5)the appropriate officials be authorized to take the necessary steps to give effect thereto.

Council Reference/Background/History:

At its meeting of March 4, 5, and 6, 1998, Council approved a recommendation contained in Clause 8 of Report No.3 of the Special Committee to Review the Final Report of the Toronto Transition Team that the Task Force on Agencies, Boards and Commissions undertake a study of the future role, mandate and composition of TEDCO and subsequently report to Council through the appropriate Standing Committee. The Economic Development Committee was subsequently established and would be the appropriate standing committee in this case.

The Workplan for the Task Force on ABCs includes this study among its top seven priorities.

The Economic Development Committee at its meeting on November 16, 1998 requested that the Commissioner of Economic Development, Culture and Tourism conduct "an analysis of TEDCO's future and potential future role in the City of Toronto's economic development and strategy" and requested that:

"the Chief Administrative Officer, in consultation with the Commissioner of Economic Development, Culture and Tourism report to the next meeting of the Economic Development Committee on the status of the review of TEDCO's Board of Directors and on the issue of the new Board's composition".

This report responds to the latter request.

Comments and/or Discussion and/or Justification:

TEDCO is a corporation under the Ontario Business Corporations Act and the City of Toronto is the sole shareholder. As the shareholder, the City appoints the Board of Directors and approves its by-laws. TEDCO's By-Laws permit flexibility in the size of the Board and do not specify the precise composition of that membership. However, the former City of Toronto's most recent policy set the size of the board at ten members including three Councillors, the President of TEDCO, and six citizens. The citizens were nominated through a variety of methods.

TEDCO's By-Law Amendments:

There are currently seven active members on the Board of Directors including two City Councillors who were appointed by Council in January 1998. Although Council's policy was to appoint Council members for a term of 18 months, TEDCO's by-laws required a three year term for all directors. Council requested that TEDCO's by-law be changed to permit Councillors to be appointed for 18 months. At its meeting of April 14, 1998, the Board of Directors of TEDCO passed a revision to the by-laws to comply with this request. This by-law amendment must be confirmed by City Council. It is recommended that Council confirm the amendment as attached to this report.

Review of Governance Structure:

The review of TEDCO's mandate and governance structure is being undertaken by the CAO on behalf of the Task Force on ABCs. To date, basic information on the TEDCO's operation, budget, by-laws and structure has been gathered and is being reviewed. In addition, staff of the Chief Administrator's Office and the Economic Development Division have met three times to determine the current status and issues and have met with the President of TEDCO and the Corporate Secretary, Director of Special Projects to discuss the possible future composition of the Board of Directors.

The long term structure of the Board of Directors should be established with knowledge of its long term role and mandate, an assessment of its past performance and structures, its financial accountability to the City, and its role in and relationship to the City's economic development strategy. The Economic Development Committee has requested that the Commissioner of Economic Development, Culture and Tourism report on the latter as well as the environmental requirements for remediating the brownfield lands in the port area.

It is recommended that these studies be coordinated and that the long term structure of TEDCO's Board of Directors and its incubators be determined with full understanding of its role in the context of the City's economic development strategy.

Interim Board Appointments:

The more comprehensive study noted above will take some time to complete and the Board of Directors currently has three vacancies. It is recommended that the current members be continued until these studies are completed and a new structure established and interim appointments be made to fill the existing vacancies.

The composition under the former City of Toronto policy was three Members of Council including the Chair of the Economic Development Committee, the President of TEDCO, and six citizens. Citizens were nominated as follows:

2 citizens nominated by the Mayor;

2 business representatives nominated by the Nominating Committee;

1 citizen nominated by the Labour Council of Metropolitan Toronto and York Region; and

1 citizen nominated by the Toronto Building and Construction Trades Council.

TEDCO's current mandate is to facilitate business growth, job creation and economic development. The desired qualifications for Board members in the City's agency handbook states that a keen interest and knowledge of the real estate development industry and expertise in marketing, finance, legal or the environment would be preferred. The Mayor's citizen nominees are not currently on the Board of Directors. The Nominating Committee process could take several months and $23,000 to advertise and provide orientation. Since this would be an interim appointment and the former City of Toronto policy included two citizen nominees of the Mayor, it is recommended that the Mayor nominate two citizen members to serve on the Board of Directors on an interim basis. The longer term composition and nomination process will be reviewed within the context of the more comprehensive review of the mandate and structure of TEDCO.

Following the same logic of continuing the policy of the former City of Toronto on an interim basis, the Chair of the Economic Development Committee should be appointed to the Board of Directors to fill the vacant position historically filled by that position.

Once the vacancies have been filled on an interim basis, the full complement of board members should elect a new Chair from among its voting members. The President of TEDCO should be a member of the Board ex officio.

Conclusions:

This report provides an update on the status of the review of the governance structure for TEDCO and recommends a process for making interim appointments to fill existing vacancies until a more comprehensive review of TEDCO's mandate and role in the City's economic development strategy can be completed.

Contact Name:

Nancy Autton 397-0306 Chief Administrator's Office;

Christine Raissis 392-3385 Economic Development, Culture and Tourism

Michael R. GarrettJoe Halstead

Chief Administrative OfficerCommissioner of Economic Development, Culture and Tourism