Clouds part in Mississauga hydro storm
By Toronto Star
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"We'll ask for no concessions, no monetary payments," Michael Nobrega, president and chief executive officer of the Ontario Municipal Employees Retirement System, told the Star.
OMERS, through subsidiary Borealis Energy Corp., owns a 10 per cent stake in Enersource, the rest of which is owned by the city.
Nobrega's pledge was made in an interview after city council voted unanimously to negotiate with Borealis to eliminate its power to veto important decisions. The right sparked a political firestorm when it came to light in 2007, almost seven years after the deal was signed.
The agreement Mississauga council approved in April 2000 didn't include a veto. The clause was subsequently added by a lawyer for Borealis, and the agreement passed without further scrutiny on Dec. 6, 2000, after being signed by Mayor Hazel McCallion, who says she was unaware of the change.
That change was revealed when council voted more than a year ago to cut the salaries of Enersource board members, the majority of whom are city councillors. Borealis objected to the move, citing its veto.
Nobrega promised to negotiate and expressed willingness to give up the veto, while councillors served notice they would take a tough approach in the talks.
No one asked Nobrega during the council meeting if he would seek compensation for giving up contract rights.
Told of Nobrega's comment to the Star, Mayor Hazel McCallion said: "That's up to him. I will accept the motion of council to renegotiate the agreement, and I don't want to make any assumptions."
In a January 22 letter to McCallion, released just recently, Nobrega made clear that the veto right no longer has the significance it once did. A now-expired clause in the deal could have forced Borealis to buy all of Mississauga's shares if the city so decided. Even councillors conceded that created risk for Borealis beyond its 10 per cent share.
Nobrega said OMERS has had an outstanding relationship with the city. "There has been no major disagreement on policy or the commercial focus of the company," he stated in his letter.
While the meeting ended on a conciliatory note, Councillors Eve Adams and George Carlson took shots at Nobrega, who had asked Borealis' legal counsel to insert the veto clause.
It was "slipped" into the agreement after the April 2000 council vote, Adams charged. "That's pulling a fast one."
"This wasn't done entirely above board," said Carlson, adding: "This agreement should never have been signed... I don't know what happened, but I do know the result was unsatisfactory."
To the Star, Nobrega denied "pulling a fast one," and said the city blew it by not doing "five minutes of due diligence" on the final agreement. The deal they had ratified was a draft agreement, he said.
Councillor Carolyn Parrish absolved McCallion of any blame for signing the final deal, saying it's not her job to read thousands of documents prepared for her signature.
