Invest North Bay Development Corporation
The creation of the Invest North Bay Development Corporation (DC) is permitted under the Municipal Act which gives local municipalities the powers to establish a range of corporations. This corporation will give the City of North Bay greater ability and flexibility in addressing and responding to the business and development needs of the community.
The Development Corporation provides a more businesslike model for the management of current and future City economic development initiatives. In a highly competitive environment the corporation will utilize local expertise and a corporate structure that will provide for quick responses to investment and growth opportunities.
The startup phase of the corporation will focus on areas of immediate economic and community growth and business development. The intent is for the corporation to evolve into a vehicle to assist in managing strategic economic assets and resources of the City in order to capture their full potential as well as facilitate long term economic growth and sustainability. This model may include the establishment of specific subsidiary corporations.
The DC will provide an innovative oversight of development activities; will be readily connected to the business world and able to quickly modify approaches to leverage assets and opportunities.
The Development Corporation will work with the City, investors and private sector partners as appropriate to maximize the value of current and future City owned assets with the focus of growing and developing the City. The DC will act as a catalyst for operational excellence as well as advice, inform and make recommendations to the City, as owner, on matters and opportunities pertaining to the operations of the DC and affiliated subsidiaries.
The mandate of the DC also includes the creation of an environment that supports long term economic and community growth. Develop a community advocacy strategy and build an adoptive environment for municipal innovation and making North Bay an attractive place to invest and do business
City of North Bay objectives of establishing the Invest North Bay Development Corporation:
- Engage community business leaders.
- Develop and confirm a strategic framework and business plan.
- Identify new business growth opportunities, trends and high potential leads.
- Identify, create and leverage relationships with community, private sector and government partners that will foster creative funding and financing resources to deliver key economic and social benefits.
- Pursuit of investors to stimulate the development of the City.
- Develop internal reporting structure that is responsive to business and community challenges.
- Assist with the growth and expansion of local businesses.
- Identify and attract new investment and businesses.
- Develop relationships and partnerships to develop services and grow the City.
- Provide a corporate structure to which City assets may be transferred, developed and leveraged.
- Establish public /private strategic partnerships where appropriate.
- Primary face of municipal economic development initiatives.
In establishing the Development Corporation the following guiding principles will be used in managing the relationship between the Corporation and the City as well as the operations of the Corporation.
- Strong collaboration and communication.
- While working in a business environment, and at arms-length to the City, the Corporation will articulate transparency, accountability and responsibility.
- The Corporation’s long and short term strategic objectives should be aligned and complementary to those of the City.
- Utilizing community assets to contribute to the building of community capacity, community pride and overall community well-being should be key drivers to the Corporations’ decision making.
- Responsive to business challenges and to the City’s directives.
Measurements of Success:
It will be extremely important for the ongoing monitoring and measuring of the outcomes of the corporation. The DC will be expected to implement processes to measure the following:
- Job creation and retention.
- Investment attraction: (new buildings, equipment, grants, salaries)
- New business development (i.e. company visits, applications, quality leads)
- Growth and expansion of existing business. ( i.e. company visits, jobs retained, applications)
- New assessment.
- Business Support (i.e. partnerships, small business centre results)
Proposed Invest North Bay Corporation Structure:
Invest North Bay Development Corporation will be a new corporation reporting to City Council. The management structure of the corporation will consists of a board of directors of up to 15 which includes the Mayor, two City Councilors, and one representative of the City’s senior management Team and up to 11 independent community members.
In the future the corporation could include the establishment of subsidiary corporations. These subsidiaries will be utilized for specific purposes in the future and may, at the discretion of City Council, include consolidating other City subsidiaries. This structure will facilitate partnerships/ alliances, joint ventures, land development, research and incubators while protecting the core corporation, other subsidiaries as well as the City. In order to be in compliance with the Municipal, as subsidiaries are established specific business case studies and public consultation will need to be completed.
Exhibit 1 illustrates the proposed structure of the corporation.
Selection of board members will be competency based, responsive to business challenges as well as the directives of the City. While operating at arm’s length from the City, the Board will function with the long term best interest of the community; operate in a competitive business like fashion, and ensure there is a framework in place which emphasizes communication and accountability to City Council.
As this corporation is established, it is anticipated dedicated resources and investment on the part of the City will be required in order to achieve the long term objectives of the corporation.
It is proposed that the corporation be established as a not for profit corporation. The main reason for this is the ability of not for profit corporations to have easier access to funding from other levels of government while it can function much like a for profit organization while affiliated with the municipality. As the corporation evolves, this may need to be reviewed or restructured.
As a municipal corporation the issue of control, transparency and accountability is important and can be challenging given the expectation to operate in a competitive business environment while being responsible for public assets and resources. The importance of developing a plan and process to address these issues cannot be understated. It is expected this would reporting to council with executive summaries of regular meetings along with semi-annual and annual reports.
In establishing the corporation, the City will need to ensure a Memorandum of Understanding between the City and DC as well as the Corporation’s by-laws, are structured to operate in a competitive environment while meeting the transparency and accountability expectations as well as confirming the Council’s control over the DC. These documentswill define the rights of the sole member (City of North Bay) including the City Council’s ability to appoint and, if required, remove DC Board Members.
Board of Directors:
The Board of the DC will consist of up to a total of 15 directors. This would include the Mayor, 2 Councilors, 1 representative of the City’s Senior Management Team and up to 11 independent directors. Having a City Senior Management representative on the Board will provide a conduit to City staff, resources, processes and City Council. It is extremely important the two organizations collectively approach community and economic development from a collaborative, complementary perspective.
The independent directors will be recommended to Council from the current Economic Development Advisory Board. In the future the proposal will be for the Development Corporation Board to establish a selection process and make recommendations to City Council for appointment.
As will be defined in the Article of Incorporation, the Board will be expected to manage the affairs of the DC which will include defining and setting development strategies, guiding the disposition and leveraging of assets, and the development of joint ventures/partnerships.
As the corporation evolves, it is important the Board be expected to work collaboratively with the City, its other subsidiaries and agencies. In addition the corporation needs to utilize existing services and resources rather than creating new. The DC will also need to work with regional strategic partners including the provincial and federal governments as well as the other cities of Northern Ontario.
Being a City owned Corporation, it is important while allowing operating at an arm’s length, the City needs to retain specific controls. Operating in a competitive business environment, there will be instances where the processes and expectations of the City may be in conflict with the operations of the DC. It is important all parties keep the principles of operating collaboratively, open communications, accountability and transparency while respecting the business objectives of the DC as well as those of the City.
Current City Economic Development staff will remain City staff however there will be a transition to second the department to the DC with the Manager reporting directly to the Board. Any future staff will also be City employees and approvals will follow the City’s process. This will evolve as the corporation matures.
Financials & Funding:
The City will be the predominate funder of the DC. Other sources of funding will be other government grants, private sector funding and potential revenues from operations or leveraging. The Corporation of the City of North Bay will provide initial funding through the assignment of $140,000 from the current City’s Economic Development budget. Furthermore the City will provide funding for the Corporation through the assignment of the existing budget of the Economic Development Department at the time staff is seconded to the DC.
Funding may come in the form of a grant, loan, advance or other means as may be deemed necessary for general or specific projects. With respect to personnel costs, the DC will reimburse the City for all costs.
Funding of the corporation will be coordinated thorough the Community Services Business Unit (CSBU) and will coincide with the City’s annual operating/capital budget process. Other financial issues requiring City approvals would also be coordinated through the CSBU.
The Corporation of the City of North Bay may transfer specific assets to the DC. Depending on the circumstances, such transfers may take the form of a grant, loan, note or other form. There will be some regulatory requirements that need to be met when transferring asset. The intent in transferring assets is for the DC to put these assets to use in the development and growth of the community. In the event revenues are derived from these assets the funds must be either reinvested in the community or returned to The Corporation of the City of North Bay. Simply put, the requirement is that any investment will have a return to the community at some point in time.
Ontario Municipal Act:
Section 203(1) of the Municipal Act grants municipalities the power to establish corporations. Regulation 599/06 governs the setup of such corporation.
A municipality may use the power to establish a corporation only if the municipality by itself, or together with one or more other public sector entities, establishes the corporation and the purpose of the corporation must be to provide a system, service, or thing that the municipality itself could provide, or the establishment of the corporation is expressly authorized by Regulation.
Before the corporation can be established, a municipality must adopt a business case study, and consult with the public about the proposal to establish a corporation. In addition prior to the transfer of assets, including staff resources, the City must adopt an asset transfer policy.
As a condition for incorporation, a municipality must give notice of proposal to transfer an asset to a corporation where the Province of Ontario has contributed funds for the purchase or improvement of the asset. It is possible the Province may require a reimbursement of all or a portion of their contribution.
Public Consultation: This process for consultation is not prescribed under the Act and could take the form of the following:
- Public Notice through Reports to Council.
- Public Meeting with formal notice.
- Meetings with key groups in the community; (i.e. Chamber of Commerce, DIA, Airport Board, Business Centre, North Bay Multicultural Centre etc.)
- Information of City Web Page.
- Communicate through social media.
- Possible topic at Mayor’s monthly Cogeco show.
Business Case Study: The Act requires a business case study but does not prescribe the content. Items to consider; much of what is included in this report are:
- Background and support material
- Benefits and risk
- Objectives and primary responsibilities
- Guiding principles to form and shape the operations of the development corporation.
- Governance and Funding model
- Board make up and qualifications.
- Public accounting and reporting.
- Public consultation process
Process for establishing Invest North Bay:
Exhibit 2 outlines the steps in establishing the corporation.
Attachment 1: OPTIONS
Although City Council has endorsed the establishment of a Development Corporation it is appropriate to assess the potential benefits and risks in comparison to the current status quo.
The City’s Economic Development initiatives are predominately led by the Economic Development Department (EDD) which is part of the Community Services Business Unit. The EDD works in collaboration with other City Departments, City Agencies and Boards as well as with other private and public sector organizations to facilitate growth and development within the community. Currently, the vast majority of City owned lands and assets are under the direct care and control of the City and governed under the Ontario Municipal Act along with internal by-laws and procedures.
- Information associated to specific projects, City owned assets and partnerships are disclosed in an open forum supporting the best practice of open transparency of government.
- Economic development and city asset management initiatives are under the control of City Council and administration, providing more involvement of Council.
- Easy access to gain City wide departmental support for Economic Development initiatives.
- Able to align City practices with stated economic development objectives.
- Mired in the general activities of operating the City, the current process is unable to respond quickly to development and investment opportunities.
- The priority and importance of long term growth can be lost in the day to day operational issues of the City.
- Lacking the guidance and structure to operate in a business –like fashion in a highly competitive environment.
- Awareness of Economic Development initiatives and issues are not widely understood beyond the department.
- Engagement of local expertise and advice is limited to specific projects.
- Communication of results and activities are lost in the operations of the City.
Reporting to The Corporation of the City of North Bay, the DC would be responsible for guiding the activities and priorities of the City’s Economic Development initiatives. On approval of Council, this corporation would be responsible for managing select municipal assets for economic and development reasons.
Operating in an arm’s length fashion from the municipality, the Board comprised of a mix of private/public sector representatives, will lead the corporation under the governance of by-laws established under the Ontario Business Corporations Act and would function in a more businesslike fashion.
- Operating at arm’s length from the City and in a more businesslike fashion, the Corporation would be poised to more quickly respond to development and investment opportunities as well as establishing strategic business partnerships.
- Engage both key business leaders in the community as well as key council and municipal representatives for both sector expertise and the development of long term strategies and plans. At the same time, continues to have access to local leaders outside the Board for advice and guidance on specific issues.
- Be more positioned to respond to an ever changing, competitive and global business environment.
- More effective leveraging of public assets and possible public funding.
- The DC will be more nimble, flexible and focused on growth.
- With involvement of Council and Senior City representatives, this option complements the ability to align City practices with development objectives and priorities, with the engagement of community business leaders.
- The Corporation, in conjunction with the City will be the “Business Champions “.
- More focused on key results and more nimble to be responsive to change or circumstance. Provides for decision making that is strategic and practical as well as based on business needs.
- Business activities of the corporation would not be disclosed as much as provided under the current state.
- Each step of the economic development process will not be as controlled by The Corporation of the City of North Bay.
- Potential loss of alignment with other City departments.
- Added administration with the requirements of the Board operations.