City of Powell River councillors will consider its legal responsibilities for a dormant corporation it is maintaining for future possible use.
At the December 13 committee of the whole meeting, Scott Randolph, city director of properties, development and communications, outlined the annual shareholders consent resolution for Powell River Power Development Corporation. He said the corporation was established by the city to act as a 50 per cent shareholder in the Freda Creek community hydro partnership with Tla’amin Nation for a run-of-river hydro generation project.
“Since pre-feasibility work was done on the project in 2012, there has been little to no activity in this corporation; it is basically a shelf corporation and is dormant at this time,” said Randolph. “To comply with the requirements of the Business Corporations Act, the shareholder must appoint directors in accordance with the articles of incorporation, approve the audited financial statements of the previous year and establish an annual reference date. This can be accomplished by approving the consent resolution I’ve included in your package.”
Randolph said when approving the 2021 shareholder consent resolution, council at the time questioned whether it was worthwhile to continue to maintain the corporation. Council decided to keep the corporation for one more year and consider whether to dissolve it in late 2022, when the annual consent resolution came forward.
Randolph said there has been a change in the board of directors recommended. Former chief administrative officer (CAO) Russell Brewer is no longer with the city, so it was recommended that interim CAO Chris Jackson replace him on the board. Also on the board is city director of infrastructure services Tor Birtig and Powell River RCMP staff sergeant Rod Wiebe.
“At this point, there are no plans to use the corporation for any particular purpose,” said Randolph. “You’ll note the audited financial statements cost the city $2,362. Legal costs amounted to $99.
“If you decide to dissolve it, we can do that after the consent resolutions are done, and wrap it up as quickly as possible.”
Councillor and committee chair George Doubt asked if council needed to set up a corporation to do something like create a housing corporation, could this corporation be used to do that.
Randolph said the terms of reference of the corporation could be changed, with the corporation being renamed.
Councillor Cindy Elliott asked what it costs to create a corporation such as the one being debated, versus the cost of maintaining the existing one.
Randolph said he hasn’t costed out the creation of a corporation but it would be a matter of a few thousand dollars.
Mayor Ron Woznow said his thought is to maintain the corporation but skip the annual audit.
“There are no assets,” said Woznow. “The only money coming in is what the city puts in to pay the audit.”
Councillor Earl Almeida asked about the legalities regarding not conducting an annual audit of the corporation.
Randolph said he believes council made a decision that it wanted audited financial statements on an annual basis for all corporations owned by the city.
“You could conceivably change the shareholder consent resolution to only require a review engagement on an annual basis, considering there are only two financial transactions a year,” said Randolph. “If there was an expected increase in activity in the corporation, you could change that requirement to a financial audit on an annual basis.”
Councillor Rob Southcott said in the past, council came under public criticism for not auditing Powell River Waterfront Development Corporation.
“I just wanted to bring that up because there was public attention,” said Southcott. “The decision was not to audit to save money. If we move in that direction now, I certainly do not want to see $2,000-plus of public money spent for what seems to be nothing, but there was criticism in the past.”
He said he is in favour of keeping the corporation because there is more than one possibility for its use in the future.
The committee provided unanimous consent to send the consent resolution to city council for approval in January.
