Board of Directors for New Toronto Hydro Corporation

The Strategic Policies and Priorities Committee recommends the adoption of the following report (December 14, 1998) from Mayor Lastman subject to amending Recommendation No. (2) by adding the words "and that the slate of qualified candidates be submitted to Council no later than March 2, 1999.":

Purpose:

To provide an update on actions taken to date and recommend a new structure for the Board of Directors of Toronto Hydro and a process for selecting directors.

Funding Sources, Financial Implications and Impact Statement:

There are no financial implications.

Recommendations:

My recommendations are that:

(1)the new Toronto Hydro Board of Directors be set at 11 members: 8 citizens which collectively represent a range of relevant expertise; 2 Councillors; and the Mayor or his designate; and

(2)the Mayor and the 3 Councillors currently on the Toronto Hydro-Electric Commission serve as a Steering Committee to work with the search consultant to recommend to Council a slate of qualified candidates nominated as the Board of Directors of the new Toronto Hydro Corporation.

Comments:

On October 28, 1998 Council referred the Toronto Hydro issue to me. This will update you on what has been done to date and recommend the next steps.

Bill 35 received Royal Assent on October 30, 1998 and requires us to incorporate the utility. The new company can begin operating on April 1 under the legislation. It is important that this City and the Hydro Board be ready.

Therefore, I have set in motion a number of specific initiatives:

(1)I have heard your views and I believe we are generally in agreement that we need a board where the majority of directors are citizens with a range of expertise and related experience. To start the wheels in motion, I instructed the CAO to retain a search consultant to recruit suitable candidates for our consideration.

To ensure that Council's interests are clearly represented, I am recommending that 2 Councillors and the Mayor or his designate and 8 citizens make up a Board totalling 11 members.

I am also recommending that a Steering Committee be established composed of the Mayor and the 3 Councillors currently on the Hydro Commission. The Steering Committee will recommend to Council a slate of candidates. With the advice of the search consultant, the citizens will be selected to represent expertise and experience in a range of disciplines such as the utility industry, finance, retail marketing, labour relations, law, safety, and the environment.

(2)I asked the CAO to set up briefings for Council to assist us in making decisions on the terms of a shareholder agreement. Many of you attended the first of these on November 27 and the CAO has distributed the materials from the briefing to all Councillors. There will be further briefings and discussions in the new year where we can air views and suggestions.

To assist the City in working through these complex issues, the CAO has retained independent legal counsel and financial advisors. These people will help the City outline the best options available to Council to protect the public interest and may assist in the briefings.

(3)I hope that a new Board can be brought before Council for approval by March. In the meantime, I have asked the CAO and Chief Financial Officer to attend Commission meetings and generally maintain a watching brief on Hydro operations.

Conclusions:

This is an exciting challenge for City Council and I urge you to take part in the briefing sessions and discussions so we can smoothly work through these changes to the benefit of the citizens of Toronto.