City West is subject to the Freedom of Information Act

I have heard many people express concern about the lack of transparency from City West and City Council in regards to City West and thought I would share the following information.

The City Of Prince Rupert is the sole shareholder of City West which makes City West a Local Government Corporation as seen in this list:
cscd.gov.bc.ca/lgd/infra/lib … s_List.xls

This means City West falls under the definition of “local government body” in Schedule 1 of the Freedom of Information and Protection of Privacy Act of British Columbia. bclaws.ca/EPLibraries/bclaws … e/96165_00

“local government body” means
(a) a municipality,
–snip–
(n) any board, committee, commission, panel, agency or corporation that is created or owned by a body referred to in paragraphs (a) to (m) and all the members or officers of which are appointed or chosen by or under the authority of that body,

“local public body” means

(a) a local government body,
–snip–

Under Section 77 of the Freedom of Information and Protection of Privacy Act it states:

77 A local public body, by bylaw or other legal instrument by which the local public body acts,
(a) must designate a person or group of persons as the head of the local public body for the purposes of this Act, and
–snip–

What this means is that City West is subject to the Freedom of Information and Protection of Privacy Act and must have a person to administer Freedom of Information requests, a “head”. It is the law.

[quote=“Dex”]I have heard many people express concern about the lack of transparency from City West and City Council in regards to City West and thought I would share the following information.

What this means is that City West is subject to the Freedom of Information and Protection of Privacy Act and must have a person to administer Freedom of Information requests, a “head”. It is the law.[/quote]

That’s a sound analysis. A ‘public body’ to which FIPPA applies includes a ‘local public body’, which includes a ‘local government body’, which includes a ‘corporation that is created or owned by a … [municipality] … and all the members or officers of which are appointed or chosen by or under the authority of that body,’.

Short version, Citywest has the same obligations under FIPPA as the City.

Citywest must appoint a ‘head’ for the purpose of administering its’ FIPPA obligations. Requests for information are governed by section 5:

“5 (1) To obtain access to a record, the applicant must make a written request that (a) provides sufficient detail to enable an experienced employee of the public body, with a reasonable effort, to identify the records sought,”

The applicant can ask for a copy of the record, including an electronic copy, or ask to review the record during business hours. The head has a duty to assist the applicant

“6 (1) The head of a public body must make every reasonable effort to assist applicants and to respond without delay to each applicant openly, accurately and completely.”

Under section 7 the head must respond to the request within 30 days (there can be extensions, but that is usually where third party information is involved) either by providing access or by giving reasons for refusing the request in whole or in part.

If the head does not respond within the time limit or refuses the request, the applicant can request a review by the Information & Privacy Commissioner of BC. The Commissioner can make a decision or order that essentially has the same effect as a court order. The Commissioner’s Office is very good about answering questions from the public about their rights < oipc.bc.ca/ >.

Until last year Citywest made its’ annual financial statements available online, but that changed when they revamped their web site last year. To get a copy, citizens have no alternative but to make an access request under FIPPA (unless perhaps the City wants to provide that information, since it owns the company and the council appoints the board).

There are a number of exceptions to disclosure under FIPPA. Citywest might say, for instance, that access is refused under section 17 because disclosing financial information would be harmful to their “economic and financial interests”, for instance where there is “(f) information the disclosure of which could reasonably be expected to harm the negotiating position of a public body …”

However, those exceptions to disclosure are quite narrow and would probably be trumped by section 13

“(2) The head of a public body must not refuse to disclose under subsection (1) (a) any factual material, … (g) a final report or final audit on the performance or efficiency of a public body or on any of its policies or its programs or activities,”

A financial statement would be factual material in report or audit form about the performance of Citywest as a public body.

Most interesting would be the financial statements for Citywest’s various (five, if I recall) subsidiary companies, which respectively control the landline business here, mobile services here and in Terrace-Kitimat, and cable tv here and in Terrace - Kitimat. It would be interesting to know, for instance, whether the cell businesses are still profitable or whether the purchase of Monarch’s cable tv services has paid off. If some parts of the business are unprofitable there might be discussion about selling them off.

It should be possible to get copies of the statements for the subsidiary companies. In 2009 the Commissioner ordered that a company owned by the Village of Burns Lake had to disclose its’ financial statement and the statements for its’ subsidiary companies. (Go here < oipc.bc.ca/rulings/orders.aspx > and scroll down to F09-08; to read an order against City of Prince Rupert scroll to F11-33).

If anyone would like to make a FIPPA request to Citywest for financial information, send me a personal message and I would be happy to help.

[quote=“BTravenn”]
—snip—
If anyone would like to make a FIPPA request to Citywest for financial information, send me a personal message and I would be happy to help.[/quote]

I’ll start with one copy of City West’s corporate articles with cheese and if available a side order copy of any partnership agreement with the city.

What will that cost? :stuck_out_tongue:

[quote=“Dex”]

I’ll start with one copy of City West’s corporate articles with cheese and if available a side order copy of any partnership agreement with the city.

What will that cost? :stuck_out_tongue:[/quote]

Corporate records are not really what I had in mind. That’s rather obscure, highly standardized information and not very interesting. At one time Citywest’s articles were posted on the City’s web site, probably in the council meeting package when, as the shareholder, the council decided to give themselves the power to direct the board to pay dividends.

But if you feel a compelling need to look at that stuff you would not do an access request under FIPPA. Your starting point would be to go to Service BC and do a corporate search for Citywest. I believe that will cost $10. The search will generate a report like this:

bcregistryservices.gov.bc.ca … Search.pdf

At the Records Office identified on the report (quite often a law office) the company is required to keep corporate records available for inspection by the public. It is all subject to complicated rules under section 42 of the Business Corporations Act as to who can see what. If you want to wade into those fine points here’s a link to the Act < canlii.ca/en/bc/laws/stat/sbc-20 … -c-57.html >.

Citywest is a company and the City as represented by its’ council is the sole shareholder. They are not partners; that’s a different form of legal relationship. There was probably some kind of agreement under which Citywest purchased the City’s telephone assets and borrowed money from the City, but that is all very obscure stuff.

The main issues, I suggest, are whether Citywest is profitable and which of it’s divisions - landline, mobile, cable and internet - are profitable and which are losers. That information can be accessed under FIPPA simply by asking for a copy of the latest financial statement for the parent company, then for the various subsidiaries that own those various divisions.

The corporate articles aren’t hard to find, as BTravenn suggested, they were part of City Council packages…

Citywest Articles 2007 Prince Rupert

Yes, I knew it was in there somewhere. There was also an amendment to the articles to give the council the power to direct the board to pay dividends. That would also be in the council packages, I think about two years ago.

EDIT: In 2009 some amendments were made to the articles, including to provide that the shareholder (council) could declare a dividend. Go to the meeting package for the October 26, 2009 meeting and scroll down to page 28:
princerupert.ca/images/edito … Agenda.pdf

The minutes for that meeting will show that the changes to the articles were adopted.

I am aware the articles are “very” public and my request was sort of a stab at some humour but posting the articles and amendments is of great value , a big thanks Mig and BTravenn.

[quote=“BTravenn”]
Corporate records are not really what I had in mind. That’s rather obscure, highly standardized information and not very interesting.----snip[/quote]

I disagree. A municipal corporation’s articles are likely not “standardized” and the Inspector of Municipalities may even have enforced requirements or restrictions into the articles. These articles are instruments in defining the relationship between the municipal corporation and the municipal shareholders. Can City West form subsidiaries without council approval? Does City West need council approval to dispose of any assets? A couple examples that first come to mind, and maybe even questioned here before.This is something I think would be interesting to some people.

[quote=“BTravenn”]
Citywest is a company and the City as represented by its’ council is the sole shareholder. They are not partners; that’s a different form of legal relationship. There was probably some kind of agreement under which Citywest purchased the City’s telephone assets and borrowed money from the City, but that is all very obscure stuff. [/quote]

I mistyped and meant a “partnering agreement” not partnership agreement". A partnering agreement as defined in the Community Charter is, I believe, required when municipal shareholders provide assistance like loan guarantees, low interest loans, tax exemptions, transfer property and assets, etc, to municipal corporations. A key contract between municipal shareholder and corporation. Got a copy? :stuck_out_tongue:

[quote=“Dex”]

You’re welcome. A bit of a long post, I’m afraid, but even if it’s not quite a treasure trove, I looked at Citywest’s articles more closely and did find that there are some issues that may be of interest.

What I meant about corporate records being ‘standardized’ is that there is not a separate class of company under the Business Corporations Act called a “municipal corporation”. There are companies that are owned by a municipal government, but they are not much different from any other company. Corporate articles tend to have a sameness to them, since all companies have to meet the same requirements under the Act. That being said, there are some articles that specifically address Citywest’s municipal ownership.

Section 185 of the Community Charter requires prior approval from the Inspector of Municipalities before a municipality can form or purchase shares in a company. Section183 otherwise restricts municipalities to very safe investments. I recall reading in the minutes that the Inspector approved the Citywest deal, which should not be surprising since it had very substantial assets at the time.

I found some problems when going through the version of Citywest’s articles contained in the package for the October 26, 2009 council meeting < princerupert.ca/images/edito … Agenda.pdf > starting at page 28. By all appearances this was the last time that the articles were amended, so they appear to be the current articles.

Article 11.3 requires that Citywest present its’ audited financial statements to “an open meeting of the municipal council” within 120 days of year end (December 31 of each year). I do not recall that this has ever been complied with. Citywest is hence required to present it’s 2012 audited statements to a public council meeting by Tuesday, April 30. If they don’t, they are in breach of their articles.

“11.3 Disclosure of Financial Statements
For so long as the City of Prince Rupert, British Columbia, is a shareholder of the Company, the Company will present at an open meeting of the municipal council of the City of Prince Rupert the financial statements of the Company presented to the annual general meeting of the Company and the report of the auditor on those financial statements within 120 days of the Company’s fiscal year end.”

By my reading Citywest is also no longer operating in compliance with Article 13.2(b), which requires that at least one director “holds office as a senior manager with the City”. Former CAO Gord Howie was on the board, but there are currently no directors that are senior managers for the City < citywest.ca/about-us/company … -directors >.

“13.2 Composition of the Board
As soon as is reasonably practicable after these Articles come into effect and thereafter. the Company’s board of directors will have seven directors from time to time being persons determined by the shareholders to have the skills. competencies and experience necessary to fulfil their obligations to the Company. provided that the composition of the Company’sboard of directors will include:
(a) not less than three individuals who are ordinarily a resident of the City of Prince Rupert;
(b) at least one individual who is a holds office as a senior manager with the Corporation of the City of Prince Rupert. British Columbia, from time to time; and
© not less than four individuals (the “Independent Directors”) who are independent of the Company and the Corporation of the City of Prince Rupert, provided that a candidate for the position of director is sufficiently independent only if a reasonable person with knowledge of all the relevant circumstances would conclude that the director is independent of management of the Company, any significant security holder of the Company, and the Corporation of the City of Prince Rupert.”

The board is appointed by the shareholder, which is the City as represented by its council. Hopefully the council will correct that situation soon so that they have a better understanding of what is going on with Citywest. Then they should be less likely to be caught by surprise.

Under Article 13.3 if the shareholders do not fill a vacancy within 90 days (from when Mr Howie left) the remaining directors can fill the vacancy. Since the senior manager is a “from time to time” appointment the council could appoint someone temporarily from its (albeit depleted) management ranks.

As for your questions about whether Citywest can create subsidiaries or dispose of assets without council approval, under Article 15.1 the Citywest directors have very broad powers of management. I see no restrictions on their powers to make those types of decisions.

“15. 1 Powers of Management
The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by the Business Corporations Act or by these Articles, req uired to be exercised by the shareholders of the Company.”

One power that the council does have, though, is the power to declare a dividend under Article 21.2. Dividends are typically declared by the board, but the articles transfer those powers to the shareholder (the City as represented by the council), as permitted by section 137 of the Business Corporations Act. I recall reading in the 2012 minutes that the council directed that a dividend be declared, then followed that up with another resolution as to when it was to be paid.

Perhaps the council should look into Citywest’s current finances and determine for themselves and with independent advice whether a dividend can be paid. By my reading of Article 21.2, the decision is up to the City, not the Citywest board.

“21 .2 Declaration of Dividends
Subject to the Business Corporations Act, the Company may from time to time declare and authorize payment of such dividends that, pursuant to section 137 of the Business Corporations Act, the shareholders may determine by an ordinary resolution.”

And finally, for some cheerier news, in view of your original post. The language is very legalistic, but Article 22.2 recognizes that Citywest is subject to the requirements of the Freedom of Information & Protection of Privacy Act. The lawyers who drafted the articles no doubt recognized that a company owned by a municipality is a “public body” that has obligations under FIPPA.

If a citizen made an access request Citywest would be required both under the statute and its own articles to act in accordance with FIPPA. Citywest cannot withhold information if the Business Corporations Act or FIPPA require that it be released. For clarity, the reference to “shareholders” refers to the City as represented by the council.

“22.2 Inspection of Company Records
Shareholders will be entitled to discovery of any and all information respecting any details or conduct of the Company’s business and affairs, limited only to the extent that the directors, acting in good faith and acting in accordance with the requirements of FOIPPA, determine it would be inexpedient in the interests of the Company to make certain information available and neither the Business Corporations Act nor FOIPPA otherwise require that the Company make such information available to its shareholders. Subject to the foregoing and the rights conferred by the Business Corporations Act, the directors may from time to time, determine whether and to what extent and at what time and place and under what conditions or regulations the documents, books and registers and accounting records of the Company or any of them will be open to the inspection of shareholders and no shareholder will have any right to inspect any document or book or register or accounting record of the Company except as conferred by statute or authorized by the board of directors or by a resolution of the shareholders.”

Citywest would also have great difficulty denying a request for copies of financial statements under conditions where the company is supposed to present its’ audited statements at a public council meeting each year.

Partnership agreements can be used when a municipality provides services through another organization (which can include its’ own company) and the municipality wants to provide “assistance” such as low (or no) interest loans, tax exemptions, or property at below market value. If an agreement provides benefits to the business, to ensure transparency the municipality is required by sections 24 and 94 of the Community Charter to provide notice to the public and under some circumstances there must be elector approval as well.

The February 14, 2005 minutes refer on page 4 to approval of a partnering agreement with Citywest < princerupert.ca/images/edito … inutes.pdf >.

However, the information packages for meetings in 2005 are not available on the City’s web site. You would have to make an written access request to the City under FIPPA to get get a copy. I have heard that Citywest has to pay property taxes like any other business, but what else is in there is impossible to say without looking at the document.

When making the request I would reference the meeting date and make clear that the request is under FIPPA. Somewhere in the minutes I noticed that the council appointed the CAO as the ‘head’ for the purposes of FIPPA requests. Since the CAO is gone and Mr Rodin as A/CAO will soon be gone, the council is the ‘head’ by default. I would just direct the access request to the City. I wouldn’t put up with any run-around about them being short-handed etc. They have to respond within 30 days unless they get an extension from the Information & Privacy Commissioner, which would be unlikely.

Very good post, Thanks.