Councillors raise transparency concerns over development corp.

City about to launch arms-length corporation focused on business

The city plans to create an arms-length economic development corporation that will focus on promoting and developing business in the community.

The proposal was approved by council last Monday, but some councillors remain concerned that such an organization would lack transparency, and the initiative has proceeded without public consultation.

The idea for the corporation was put forth by the mayor’s task force on economic prosperity, which worked since 2011 to find ways to improve the city’s prospects.

Coun. Henry Braun, who sat on the task force, said he has had “serious reservations” about the plan from the beginning.

Currently, Abbotsford’s economic development function operates internally and was previously included under the planning department.

In a report to council, deputy city manager Jake Rudolph explained that “numerous, if not most, cities have established development functions,” with positive impacts. Rudolph oversaw the implementation of an economic development corporation in Pitt Meadows while he served there as chief administrative officer.

Other communities in the region have economic development corporations, including Chilliwack and Surrey.

Chilliwack’s organization, the Chilliwack Economic Partners Corporation (CEPCO), has been incorporated as a private company since 1998. It has a 16- to 20-person board of directors, with private and public sector members, including the mayor, one councillor, the city’s chief administrative officer, as well as representation from the chamber of commerce, the University of the Fraser Valley and the community.

CEPCO provides services including working to obtain new lands for industry and commercial growth, co-ordinating investments in Chilliwack, assisting in employee recruitment for businesses, and helping to obtain funding for employee training.

Rudolph said Abbotsford’s corporation would work with the business community to encourage business retention and expansion, as well as assist in attracting and facilitating new investment.

However, Braun said he’s still concerned that such an entity would provide adequate transparency.

“A corporation would be shielded from public scrutiny and accountability in a way that is not the same as if it was handled within local government,” he said, adding there has been a lack of consultation with the public.

Rudolph said the city would set out the provisions for transparency, in which council would receive reports and consultation. They would also appoint a board of directors, which would include representation from council.

“In my experience, there hasn’t been that perception of a lack of transparency.”

Rudolph maintained a corporation would dedicate itself to the economic development of the municipality, not undertaking development projects.

Braun said he is all for making a profit to reduce taxes, but “we have not had a stellar history of making great decisions in some areas.”

He said the city needs to rebuild the trust of its taxpayers and residents, and “I do not see this as doing that.”

Mayor Bruce Banman said Braun’s concerns about transparency can be addressed as the corporation is created.

“I believe we need to get on this. We have been asleep at the wheel and allowing other cities to go by us as we sit here and try to figure out what model we’re going to do.”

The report states that the city has an economic development budget of $323,850, but staff have been advised that a budget of $550,000 to $750,000 would be industry norms for a city the size of Abbotsford. The budget will be reviewed as a part of the 2015 budget process.

Rudolph said the city will move immediately to recruit a director and told The News he expected that it would be implemented by 2015.

City staff will draft details of the initiative, which will require council’s approval as the process moves forward.