December 16, 2013
By Pepper Parr
BURLINGTON, ON. Hydro, the guys that keep the lights on and send you a bill every second month that never gets smaller – unless you are in Florida for the winter, wants to “find some efficiencies” and get more out the company’s assets.
Burlington Hydro has one shareholder – YOU; the company is a wholly owned subsidiary of the city of Burlington and pays the city dividends on a regular basis. There are times when Hydro looks like either a rich uncle the city begs money from or a piggy bank that gets raided frequently.
The City of Burlington and Burlington Hydro Electric Inc., jointly announced the appointment of Archie Bennett as director and chair of the Burlington Hydro Electric Board following the resignation of Charles Keizer.
Charles Keizer leaves Hydro board to consult for the organization.
Keizer, a partner and co-head of Torys’ Infrastructure and Energy Practice, (Torys is a leading Ontario law firm with probably the bluest pedigree in the province) resigned as Burlington Hydro Electric Board Chair to provide legal services to Burlington Electricity Services Inc. and BHEI in partnership with the City of Burlington.
“As lead counsel on a number of generation and transmission projects, Keizer has provided solid strategic advice and has a strong understanding of project development,” said City Manager Jeff Fielding. “On behalf of the city, BESI and Burlington Hydro Electric, Charles will lead the charge in finding efficiencies and cost-saving opportunities that will help benefit ratepayers and taxpayers.”
Keizer brings considerable depth in hydro transmission and grid operations to his new consulting assignment. It should be interesting to see what he comes up with.
Keizer had to resign from the Hydro Board if he was going to provide services for which he will be paid. In the energy business payment for services is very healthy.
In addition to Bennett, a former BHEI board director and chair, the BHEI board also includes Darla Youldon, a former executive at John Deere & Co.; City Manager Jeff Fielding; Phil Nanavati, vice-president at FENGATE Capital Management; Don Dalicandro, CEO of Azertech Inc.; John Maheu, Association of Ontario Road Supervisors; and Burlington Mayor Rick Goldring.
“We’re very pleased that Charles Keizer will put his extensive industry experience into play as he undertakes the task to assess potential service delivery opportunities between the City of Burlington and Burlington Hydro Electric,” said Gerry Smallegange, President and CEO of BHEI. “In the interim, and until further notice, Archie Bennett has agreed to step in as chair of the company, providing his very capable and experienced leadership on the BHEI board.”
Bennett returns to an old stomping ground after retiring in 2007 completing a 45-year career in senior management, engineering and construction including leading the Burlington-based Zeton group of companies since 1989 to become the global leader in its field. He continues to serve on the parent and Dutch subsidiary boards of Zeton, and provides consulting services on management matters.
Bennett has the look of a place holder until Burlington Hydro has a sense as to what Keizer suggests the corporation can ger into to dig out those “efficiencies”.
Can Hydro be more than an energy transmission company. They should have kept the fibre optic network they once owned.
City manager Jeff Fielding has always believed that Hydro can and should play a bigger role in the financial evolution of the city; he has cast a covetous eye on the head office Hydro property on Brant street and wondered aloud if the city could not get more out of that asset.
Burlington is beginning to realize that we have a city manager who while good on the administrative side happens to be very good on the thinking side and has in the short time he has been at city hall managed to completely shake up the way the city puts together its budget and has everyone in every department taking a much closer look at the service they deliver. He is asking them to ask themselves: Is this a service the city should be delivering? This is radical within the municipal sector.
Fielding has permission from city council to explore the idea of “enterprise corporations” that will be like Burlington Hydro, stand alone, wholly owned subsidiaries that have the potential to generate revenue and perhaps even find a cheaper way to deliver services.
Hydro has been paying the city significant dividends over the years. That spike is the year the fibre optic network was sold.
Fielding knows better than anyone, except for Joan Ford who knows every number in every account of the city budget, how desperate the city’s Industrial, Commercial and Institutional (ICI) tax revenue situation is. The Economic Development Corporation has done such a terrible job of both attracting new companies to the city and positioning the city as a place corporations want to locate.
Jeff Fielding – proving to be a very strong conceptual thinker as well as a decent administrator.
The ICI side of the tax revenue stream for 2013 is going to be a negative number when measured against 2012 – and things right now don’t look a lot better for 2015. If the funds don’t come from the ICI side then they have to come from the residential side or spending has to be cut. In an election year? Financially the city is not in a healthy situation even thought our reserves are in very good shape.
Given a five or six snow storms like the one late last week and we just might have to dip into the snow removal reserves.
The Burlington Hydro announcements are good news in that they show some movement. Task now is to see which direction they actually move in. Hydro is one of those fat calves with all kinds of revenue and not a lot in the way of transparency.
Fielding may be a refreshing thinker at the stagnant city hall. The question is can he deliver; he cant do it himself. It would be interesting to review his track record at his previous job in the City of London. It also doesn’t take a genius to recognize the under utilization of city owned assets. If Fielding does manage to gain traction on some of these ideas, watch the squirming by council, staff, and the resistance of the public. The tax revenue from the economic development and employment lands are proof that capitalization on the employment land experiment has been pure fantasy. This city needs to build high density residential in neighbourhood clusters. The only thing that will slow down the increase in taxes is continued development activity. City Hall should be moved to make room for a mixed use redevelopment; city hall as well as the current management culture is obsolete.