People, I watched that June 3 meeting between the Port of Sydney and the CBRM council and those are two hours of my life I will never get back, so I have to write something about it and I think the best thing for me to do would be to provide some context for Port of Sydney CEO Marlene Usher’s presentation and subsequent question and answer session because context is not the Port CEO’s strong suit.
Usher told council there were “two files” she considered “important” for the development of the port — navigational aids and the acquisition of the harbor bottom — so I will deal with navigational aids here and the harbor bottom in a separate article, just so you don’t completely overdose on port news.
Nav Aids
When the $38 million Sydney Harbour dredge was completed in 2012, there was about $2.5 million left over. This money, then under the control of the Sydney Ports Corporation (SPC), was earmarked for four purposes, one of which was new navigational aids for the deepened channel. ACOA and the Coast Guard signed a memorandum of understanding in 2014 stating the SPC was responsible for installing them.
The new aids were necessary because, without them, the deepened channel could not be used — and, in fact, the deepened channel has not been used since it was dredged nine years ago.
In 2015, the Port of Sydney Development Corporation replaced the SPC and took over responsibility for the $2.5 million fund. In September of that year, PSDC CEO Marlene Usher went to the final meeting of the Harbour Dredge Oversight Committee and asked that the PSDC be permitted to spend the money earmarked for navigational aids on studies and legal services and travel in support of the container terminal project. The committee agreed to her request.
Usher’s case for reallocating the funds was that the navigational aids were more expensive than initially expected. Moreover, she had a “legal opinion” that said responsibility for the new aids rested with the federal government and the Coast Guard and the PSDC had the “authority to utilize the funds for other port projects.” She told me the legal opinion (which I was not permitted to see) had come from Jim Gogan of Breton Law whose firm would ultimately be paid $150,000 from the fund.
In 2017, Usher told the interim port board that:
Pressure for the Coast Guard to put the navigational aids in place continues from the Province with letters of support from Nova Scotia Power and the Kline Group (Donkin Mine.)
In 2018, she told the CBC the Coast Guard was willing to pay part of the costs of the new aids if the Port would pay its share — $800,000, which it was required to put aside from the $1.1 million left in the dredge fund.
Source: Port of Sydney
In 2020, Harvey Vardy, director of navigational programs for the Coast Guard’s Atlantic region, told the CBC that after the dredge, the “port authority” was the only user of the aids so, “according to policy, that made them responsible for the costs. However, a review last year found there were more potential users, and that changed things.”
Also in 2020, the Port received federal permission to use the money in the dredge fund — including the $800,000 set aside for navigational aids — to keep the port afloat during COVID. (And yes, if you’re keeping track, that means the port twice received permission to spend its navigational aids money, although this second time required an amendment to the original scope of work for the dredge project.)
Now, in 2021 — six years after she first diverted navigational aids monies to container-port-promotion projects — Usher is saying the aids are key to port development and the PSDC is “really getting a lot of traction” from the feds on the issue. They have “concurrence” from the Coast Guard that “they would take it on,” they are just waiting for the federal government to identify “a pot of money” they can use for the project. What’s made the difference, she said, is that they now have four private companies howling for navigational aids (never mind that Nova Scotia Power — which contributed $1 million to the dredging project — has been howling since 2012.)
But here’s the best part: when the money is sourced, Usher says the PSDC will “work closely” with the Coast Guard to make sure the navigational aids are installed “as efficiently as possible.”
Given we are nine years out from the dredging of the harbor, I would say any chance for “efficiency” on this file has long since sailed.
And may I just add that I think District 12 Councilor Lorne Green’s concern that the “sticking point” for the $1.5 billion container terminal project is $3.4 million worth of navigational aids is…unfounded.
Articles of Association
Port board member James Kerr, who heads the governance committee, spoke about “gaps” the committee has discovered in the corporation’s articles of association. For example, he said, there is no way to deal with a director who misses all the meetings. (Oh, hey, I think I found one: “Section 5:10 Any director may be removed for cause by the Members at any time.”)
Kerr identified three specific changes they would like to see made to the articles, one of which I have no problem with — he wants to be sure that the CBRM nominating committee does its work and names new port board directors in time for them to be announced at the Annual General Meeting.
But the second involves moving the AGM to February, which has me puzzled because they held the AGM in February this year, even though, as Kerr explained, the current articles demand that the meeting be held within six months of the end of the fiscal year — meaning sometime between between April 1 and September 30. (The 2018 AGM was held in February, too, although the 2019 AGM was held in October. The Port website doesn’t include any information about the 2020 AGM, although the video from the 2021 AGM is still accessible. The most recent audited financials on the site are from 2019.)
Kerr also recommended allowing the board to reappoint some of its members itself, the stated reason being to ensure they have experienced members as chair and vice chair, the unstated — but oh-so-obvious — reason being to remove the final say on board appointments from the CBRM nominating committee. My answer to the problem of losing your chair and vice-chair the same year has apparently also occurred to them: don’t appoint directors whose terms are set to expire the same year as your chair and vice-chair.
This would constitute a significant change to the articles of association, as would the suggestion from Councilors Steve Gillespie and Steve Parsons that there should be CBRM councilors on the port board.
I’m realizing, as I write, that I don’t know enough about governance to analyze the wisdom of these changes, so I will have to speak to someone who does know about governance and get back to you.
