Al­der­men de­mand an­swers on En­max

FIRE­WORKS EX­PECTED MON­DAY OVER SEVERANCE FOR EX-CEO, ETHICS

Calgary Herald - - FRONT PAGE - SARAH MCGIN­NIS SMCGINNIS@CAL­GARY­HER­ALD.COM

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

Cal­gary Her­ald Ar­chive

For­mer En­max CEO Gary Holden could be in line for a $5-mil­lion severance pack­age.

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