Aldermen demand answers on Enmax
FIREWORKS EXPECTED MONDAY OVER SEVERANCE FOR EX-CEO, ETHICS
Calgary aldermen will be demanding answers Monday after the latest scandal that led Enmax CEO Gary Holden to resign his post Friday.
Most on council are zeroing in on ethics policies and oversight issues at the cityowned energy utility.
But one outside critic argues it is time for the city to consider divesting itself of the publicly owned utility altogether.
Holden announced his resignation on Friday in the wake of several controversies — the latest being reports of accepting a trip to the Monaco Grand Prix in 2008 funded by a firm providing Enmax’s billing software.
“The issue between Enmax and city council will unquestionably be dealt with on Monday,” said Ald. Gord Lowe, who sits on the Enmax board of directors along with Ald. Brian Pincott.
“I’m not going to speculate on what the discussion is going to centre on and what the outcome is going to be,” Lowe added.
Enmax chairman Cliff Fryers and the board of directors asked Holden to resign after holding two emergency meetings, one Friday morning and an earlier one Thursday night called by Mayor Naheed Nenshi.
Holden said in a brief statement he was leaving so he wouldn’t be a distraction for the company.
He isn’t the first Enmax CEO to leave suddenly.
In 2004, Bob Nicolay was terminated following public missteps including charging unauthorized fees on bills and attempts to collect back charges from rural municipalities.
Ald. Dale Hodges witnessed both Holden and Nicolay’s departures and says before Enmax prepares to “roll the dice again,” several governance issues must be addressed.
“This isn’t their own private little fiefdom. They’re accountable to the shareholders, which is the city and city council,” said Hodges.
Nicolay left his position with a roughly $2-million buyout and speculation is Holden, if entitled, could receive $5 million or more.
Hodges said council should know the fine print of any severance package for Holden.
Ald. Druh Farrell is eager to understand Enmax’s corporate policies when it comes to the type of trip Holden is alleged to have accepted, and clarify who was aware of the sojourn. She agrees it is important to distinguish between what may be acceptable at a private company and the higher expectations for a public one. But she also warns council shouldn’t overstep its authority.
“We’re not their bosses, but we do appoint the board and we should be ensuring good governance is in place. I thought we had,” Farrell said.
Other aldermen are questioning their continued role on the Enmax board of directors.
“I don’t believe we should have any council members on the board,” said Ald. Jim Stevenson. “If it’s being run as a separate arm’s-length corporation, I don’t feel we need to have or should have board members on there.”
Ald. Shane Keating said he prefers to have a council presence on the board to act as an information conduit between the utility and city, offering aldermen a greater understanding of the thinking behind major decisions.
But Ald. Andre Chabot said there can be challenges to this type of communication.
When Chabot joined the Calgary Economic Development board of directors about two years ago, he said he was asked to sign an agreement clarifying that his role on the board was to represent the best interests of the organization alone. It’s an agreement Chabot said is similar to one at Enmax.
“I don’t think members of city council should be obligated to sign those sorts of agreements because essentially they are representatives of the city, and duly elected . . . which should take precedence,” said Chabot.
This isn’t an issue confined to Enmax board members alone, said Lowe.
Regardless of what type of board an alderman is asked to sit on, they have a fiduciary duty and duty of care to that organization, he said.
On any board, sometimes conflicts arise with an alderman’s obligations to the city, said Lowe.
As council debates the future of Enmax, at least one outsider is saying they should evaluate whether the utility should remain publicly owned at all.
“I think it’s time for the city to do a review of its assets — namely Enmax,” said Canadian Taxpayers Federation spokesman Scott Hennig.
“It seemed to want to operate like a private company. . . . Why not look at it and see if there are any buyers and get information on whether or not it would be better to operate as a private company,” he said.
CUPE Local 38 president Peter Marsden — who represents about 500 Enmax employees — said polling during the last municipal election shows the majority of Calgarians want to keep Enmax city-owned and its profits going to city coffers.
“Calgarians are pretty clear that it makes economic sense to keep the utility. If not, they will be paying higher (energy) rates,” Marsden said.
THIS ISN’T THEIR OWN PRIVATE LITTLE FIEFDOM. THEY’RE ACCOUNTABLE TO . . . THE CITY AND CITY COUNCIL
DALE HODGES
Former Enmax CEO Gary Holden could be in line for a $5-million severance package.