Council shuts down NEDC, tabs mayor to lead new economic development model

By Dominic Abassi
December 21, 2016 - 1:44pm Updated: December 21, 2016 - 2:25pm

NANAIMO — It was already on life support — now the Nanaimo Economic Development Corporation (NEDC) is being put down for good.

Mayor Bill McKay announced during Monday's council meeting that it was decided during a Dec. 15 in-camera meeting, by an 8-1 vote, that the operations of the NEDC will end Jan. 31. The arms-length corporation will be replaced by a yet-to-be formed economic development commission, chaired by the mayor.

"NEDC was an amazing organization," said McKay in conversation with NanaimoNewsNOW. "However, at this point we've found ourselves with a president that's gone and most of their board has resigned, so we have to react. We're going to go with this new hybrid model that has in-house service delivery with significant input."

Not happy with the performance of the in-house economic development services, then-Mayor John Ruttan spearheaded the creation of the NEDC in 2011. A board of directors was established, with membership from the business community. Since then, the corporation has been plagued by turnover at the chief executive officer position, as well as growing rumblings of discontent from council and members of the community around accountability, performance and the $1.37-million in annual funding from the city.

The NEDC began to unravel after an October decision by council to pull tourism from its mandate. CEO John Hankins went public with his opposition to the decision and was subsequently fired. Shortly after Hankins' firing, the board of directors began to disperse. Previously at its maximum of 17 members, resignations dropped the board's membership to just six by the time Erralyn Thomas was named its new chair in early November.

McKay was asked what role he felt the city and council played in the sequence of events that eventually led to the NEDC's demise.

"The role that we're going to play is moving forward. The fact is, we found ourselves in this position by the actions of others. I'm not to suggest that everybody didn't do what they felt was best under the circumstances they faced personally, but here we are today. We have no president and virtually no board left, so it's time for us to step in and create something new."

He says he has no option but to look to the future and stop "looking in the rear-view mirror."

A city news release states a factor in the decision to shut down the NEDC was the fact there was only "minor interest" generated by a recent public call for new members to join the board.

McKay was asked if he felt this new commission would be able re-engage effectively with the business community.

"I believe that we're going to put together a list of different organizations that will be represented this time, as opposed to simply people from the business community," he said.

McKay says he wants involvement from labour, the university, the Port Authority and the airport, to name a few.

The mayor says he is "flattered and thrilled" that council has tabbed him to chair this new commission. It's the same group that in early November went public with allegations of serious misconduct by the mayor, specifically related to business conduct. Council alleged McKay entered into discussions with a foot ferry proponent without their knowledge or approval. The mayor does not deny that allegation, but maintains he did nothing out of line. Allegations were also made that McKay did not properly declare gifts he received while on a trade mission to China.

"I'm going to work very closely with council to determine what the terms of engagement for me are, what their required communications will be and what my level of authority will be so I've got clear direction from council so we can avoid those pitfalls in the future," said McKay.

The Core Services Review delivered in May, which cost the city more than $230,000, examined the NEDC. Ultimately the consultants recommended "that NEDC should continue in its present structure, but with much stronger planning and accountability measures."

"The core review also stated that while we had a good model, they also suggested we pull back funding from economic development and look for different sources of funding," said McKay. "I think if we're looking for cost-savings, we're going to have to pull in the horns, try and get as many efficiencies as we can."

A city news release states "administration will prepare a report for Council in January recommending a process to formalize the commission's make-up and terms of reference."

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