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Opening comments:  More at the end.

   
"Borealis is on a power trip", says Councillor Carolyn Parrish.

  Check out the,
The Carolyn Parrish Enersource Facts Sheet.


Mississauga News - September 26, 2008 - By  Joseph Chin, jchin@mississauga.net

City, Enersource clash over board salary


Ward 6 Councillor Carolyn Parrish is accusing Borealis of being on "a power trip"
when it comes to the Enersource board's refusal to accept an April 11 decision by City Council
to significantly reduce board members' salaries.
Borealis owns 10 per cent of Enersource with the City of Mississauga owning the rest.

The City of Mississauga and Enersource Corporation's board of directors appear headed for a heated showdown over board members' compensation that could ultimately result in the City buying out minority owner Borealis or divesting its 90 per cent share of the company.

The issue centres over the board's refusal to accept an April 11 decision by City Council to significantly reduce members' salary. Instead, at the first meeting of the new board on May 15, it voted to hire a consultant to conduct a survey of what directors are paid at comparable utility companies and bring back a recommendation.

At Wednesday's (Sept. 26) City Council meeting, the consultant, Hay Group, presented its report, recommending a salary of $45,000 for board chair (the City had pegged it at $40,000) and $17,500 for board members (up from $15,000).  Last year, the numbers were approximately $81,000 and $39,000 respectively, depending on meetings attended.  For City representatives (the mayor, Ward 7 Councillor Nando Iannicca and City Manager Janice Baker), the remuneration was on top of their regular salary - which critics of the practice call "double-dipping."

(Although, as mayor, McCallion is automatically a member of the board, she has since indicated she'll no longer accept a salary for the duties.)

Hay Group says it "has not received received direction from the Enersource board, nor from shareholders, as to what it believes to be the competitive market, or as what it believes should represent the competitive targets."

However, councillors were clearly annoyed the issue was before them again.  They also appeared confused on how to proceed.  McCallion, as chair, ruled a motion was required to reopen the "question."  Eventually the whole issue was deferred to the next council meeting, but not without some heated venting by councillors first.

Ward 6 Councillor Carolyn Parrish, who initiated the Enersource brouhaha shortly after she was elected, noted the pay cut was approved "almost unanimously" by Council.

"And we specifically said no hiring (of a consultant), no wasting of money.  The board applicants were aware of the remuneration.  The only people who weren't aware of it was Borealis."

Baker noted that the board was advised of Council's decision back in April, and it - disagreed with it.

"I did advise the board that it was a very bad idea (to proceed with the hiring of a consultant)," she said.

Although Parrish acknowledges the recommended increase is minimal, she told The News that the impasse really boils down to who calls the shots at Enersource.  And it's a no-brainer, she argues, because the City owns a 90 per cent stake in the utility.

"Borealis is on a power trip, despite its measly 10 per cent share," she said.

Ward 11 Councillor George Carlson was just as incensed.  He argued the board should be given no compensation under the circumstances.

"Take us to court - that's what we should tell them," he said, adding he'll be in favour of the City buying out Borealis.

Enersource, which distributes electricity to some 180,000 Mississauga homes, was purchased by the City in 2000.  Borealis was brought on board for financing and tax advantages that are given to public/private partnerships.

The purchase agreement allows either party, at any time, to buy out the other.  The agreement also gives Borealis a veto on certain matters, such as board compensation and acquisitions.  Michael Nobrega, president and CEO of OMERS (Ontario Municipal Employees Retirement System), which owns Borealis, has formally informed Council he's in agreement with the recommendation.

Ward 4 Councillor Frank Dale expressed surprise at Borealis' immense control.  He said he wasn't aware of that fact during the April pay deliberations.

"I'm disappointed (Borealis' veto power) wasn't brought forward and explained to us," he said.

Ward 9 Councillor Pat Saito, who headed the citizens selection committee, urged the City to seek legal opinion on what recourse the City has.

"We have to deal with this board," she said.

With the issue deadlocked, and pending a resolution, board salary could conceivably revert to last year's rate.

"And I think that would be horrendous," said Parrish.

The new Enersource board is comprised of Nobrega and Robert Watters representing Borealis; McCallion, Iannicca, Ward 1 Councillor Carmen Corbasson and Ward 10 Sue McFadden representing the City of Mississauga; returning City-appointed citizen members Gerald Beasley and board chair Norman Loberg; and new citizen members Robert MacCallum and Hasan Imam.


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