SUPPORTS ITEM NO. 1 CS&B COMMITTEE AGENDA MARCH 14, 1996 ADMINISTRATIVE REPORT Date: February 28, 1996 TO: Standing Committee on City Services and Budgets FROM: General Manager of Corporate Services SUBJECT: Report of the Interim Economic Development Commission RECOMMENDATION A. THAT Council receive the companion report of the Interim Economic Development Commission on the establishment of a permanent Economic Development Commission for information. B. THAT Council approve the form of incorporation, the composition and size of the permanent Commission, the qualifications of the Commission members, the terms of reference, the first term priorities and work plan, the rules of procedure, the selection and appointment of staff, the establishment of an office, and the first year's budget and financial plan, all as set out in the companion report of the Interim Economic Development Commission, subject to the following considerations: - that the City of Vancouver not hold shares in the organizational structure of the Commission and the City's business dealings with the Commission be conducted on an arm's-length basis at all times; - that the Council representatives to the Commission not have any voting rights or powers pursuant to Commission business matters; - that the term of membership on the Commission and the limitation on the number of years a serving member may sit as a commissioner is satisfactory to Council, including the absence of any staggered renewal provisions; - that Council appoint the 15 initial members to the permanent Commission and thereafter the powers of Council to appoint new members be as set out in a fee for service contract between the City and the Commission; and, - that Council is reasonably comfortable with the sectoral representation applicable to Commission membership as proposed in the companion report. C. THAT Council instruct the City Manager and the Director of Legal Services to enter into a fee for service contract with the Economic Development Commission as permitted under Section 242(2)(c) of the Vancouver Charter under the terms and conditions proposed in the body of this report. The initial term of this contract will be for one year, commencing on the date of execution of the contract, at a fee of $200,000 plus GST, subject to further two-year term renewals and Council approval. D. THAT the City Manager be authorized to commit staff resources to the start up activities of the Economic Development Commission on a reasonable basis, provided additional funding is not required for this support. COUNCIL POLICY On September 14, 1995, City Council approved a number of recommendations concerning the future direction of the City's economic development activities, as follows: - approval in principle of the formation of a permanent Economic Development Commission; - the closure of the City's Economic Development Office; and, - the formation of an Interim Economic Development Commission with instructions to develop the terms of reference and organization model for the permanent Economic Development Commission for report back to Council in the early new year. PURPOSE This report recommends approval of the formation of a permanent Economic Development Commission, essentially along the lines set out in the companion report of the Interim Economic Development Commission. BACKGROUND In February, 1995, the City of Vancouver Economic Development Task Force recommended that an Economic Development Commission be established. One of the first assignments of the new Commission would be the development of an economic vision for the City. The Commission would also serve as a direct link between the business community and City Council. Council agreed in principle to establish a permanent Economic Development Commission and reappointed the Task Force, and several additional members representing other community interests, to form the Interim Economic Development Commission. Council instructed that a new report be prepared by January 31, 1996, outlining the following items: - terms of reference for the new Commission; - recommendations on the types of persons that should be appointed to the Commission; and, - an action plan for the first two years of the Commission's mandate. The Interim Commission met eight times, including several meetings with representatives of City Council, to arrive at the conclusions and recommendations embodied in their report to Council dated January 31, 1996. The major items of this report cover the following areas: - the form of incorporation of the Commission; - the composition and size of the Commission; - the qualifications and experience of the Commissioners; - the terms of reference of the Commission; and, - first term priorities of the Commission. Staff have reviewed these items and have provided commentary below. DISCUSSION Council is directed to the companion report of the Interim Commission for a detailed discussion on the role, structure, composition and activities as proposed for a permanent Economic Development Commission. The following commentary is provided for Council consideration. 1. Form of Incorporation Having discussed this matter with Corporation Counsel, we believe that the decision on the form of incorporation should be left to the members of the Commission. Obviously, there are alternative models of incorporation to that proposed in the report (not-for-profit society, a not-for-profit B.C. company), but based on the assumption that Council wishes to maintain an "arm's-length" relationship with the new Commission, the argument advanced by the Interim Commission for greater flexibility is a persuasive one. Regardless of the form of incorporation adopted, we recommend that the City of Vancouver not hold any shares in the new Commission, based on a arm's-length relationship. 2. The Composition and Size of the Commission We believe that the proposal set out in the Interim Commission report is reasonable. The permanent Commission would have 15 members representing a broad cross section of the business community with the capacity and commitment to contribute to the economic development and prosperity of the City of Vancouver. Council may wish to review the proposal of selecting two sitting members of Council to act as representatives to the Commission. Having members of Council act in a liaison capacity to Boards, Commissions and Committees provides a conduit to facilitate matters of mutual interest and concern and generally works well. We suggest, however, that Council representatives to the Commission have no voting rights or powers. The report also proposes that Council select the first 10 members of the Economic Development Commission and these members will then select the remaining five members to balance sectoral representation on the Commission, to facilitate partnership arrangements or to promote initiatives vital to the economic development of the City of Vancouver. We believe that Council should select all 15 of the initial members for the initial term. After which, the selection arrangement proposed by the Interim Commission should be included as one of the conditions of a fee for service contract between the City and the Economic Development Commission. The Interim Commission report suggests that the term for members be two years with provision for reappointments to a maximum of six years. There is no mention of staggered terms for the commissioners and the continuity of governance that that arrangement affords, and Council may wish to review this aspect of renewal with the Interim Commission, if it is of concern. 3. The Qualifications and Experience of the Commissioners As mentioned above, the Interim Commission has proposed that the commissioners bring to the table a capacity, experience and interest to get the job done. Having members with experiences which reflect the diverse nature of Vancouver's business community is important. Council, however, may wish to comment on the business experience sectors outlined in the companion report. 4. Terms of Reference of the Commission The terms of reference proposed for the permanent Economic Development Commission appear reasonable and cover the appropriate territory. Clearly, these initial terms are not cast in concrete and will likely change over time as the activities of the Commission take shape and mature. Additionally, Council has requested that a permanent Commission undertake three important operational activities as a priority, as follows: - dealing with information requests and referrals on economic development matters; - coordinating the visits of incoming business delega- tions; and, - coordinating the City's participation in outgoing trade missions. We suggest that the aforementioned operational activities, including the provision of policy advice and commentary on major economic development issues, be the subject of a fee for service contract between the City and the Economic Development Commission. The contract would also reflect the following points: - the initial term would be for one year commencing upon execution of the contract by the City and the Commission. The fee for service would be $200,000 (plus GST) as proposed in the budget and financial plan included in the report of the Interim Commission; - the contract would include optional two-year term renewals, subject to Council approval; - the contract would provide for quarterly payments of the annual contract fee in advance; - the contract while in full force and effect would provide Council with the authority to appoint 10 members of the Commission upon expiry of the terms of sitting members; - the Commission would present an annual business plan and operating budget to the City for Council considera-tion and approval in advance of each anniversary date of the contract term; - the Commission would be required to maintain appro- priate financial records and provide annual audited financial statements to the City; and, - the Commission would be required to file a summary report of the results of its activities and accomplish-ments for Council review as soon as practicable after the conclusion of each year of the service contract. 5. First Term Priorities of the Commission The first term priorities as outlined in the companion report appear reasonable, noting that up to three months of start-up time will likely be required to set up operations, hire staff and commence regular business. In the interim period, a small number of City staff may be required to assist with the set up process. We suggest that the City Manager be authorized to commit staff resources to this task as he deems reasonable, provided this support can be accommodated without an increase in the Operating Budget. We expect that situation to be the case. CONCLUSION In September, 1995, Council decided to close the City's Economic Development Office permanently. That task has now been accomplished. Additionally, Council created an Interim Economic Development Commission to assess and report back on the structure and terms of reference for a permanent Economic Development Commission. The Interim Commission has now submitted its report on that subject dated January 31, 1996, for Council consideration. The recommendations of this report support the establishment of a permanent Economic Development Commission along the lines suggested by the Interim Economic Development Commission. * * * * *