In the legislative equivalent of a car getting pulled over for a busted taillight and an open bottle of booze being found on the drivers seat, the Hamilton Waterfront Trust is going to be subjected to a third party audit to determine if it is financially viable.
It started off innocently enough with a letter from the Chair of the Hamilton Waterfront Trust asking to defer a scheduled meeting with Audit Finance and Administration Committee until May. Chair Trent Jarvis wrote that the HWT is in the middle of a strategic planning exercise and would be better able to provide more information on the organization’s plans after that work is complete.
That seemingly innocuous request triggered an existential debate from AF&A committee members that culminated in a recommendation for a comprehensive third-party review that, among other things, will determine whether the organization is even financially viable. The Hamilton Waterfront trust has posted operating losses almost continuously for the past ten years and has relied on construction contracts from the city for part of its continued existence. The city threw the organization a lifeline by buying out the lease for the former Discovery Centre that had been signed between HWT and the Federal Government for $2.2 Million. The City was to pay the buyout in annual installments of $230,000, but partially offsetting the windfall was a $759,000 legal bill HWT incurred fighting the Sarcoa lawsuit. In January Councillor Brad Clark Called for an audit of the HWT books, a request he reiterated at committee Thursday. Finance Chief Mike Zegarac suggested city staff had already begun to have concerns about the HWT’s finances in a report.
Councillor Lloyd Ferguson noted that HWT had a habit of bailing out of meetings at the last minute and he wanted assurances the process wouldn’t get stalled by a repeat of a no-show. Councillor Arlene Vanderbeek said “there has been a fair amount of consternation in the public about the Waterfront Trust for some time…we need to put, not only the public, but the Waterfront Trust on notice that we are moving forward to verify stability,” adding that the process should get underway quickly because the council calendar is shortened due to the upcoming election.
The moves by the committee today are a far cry from previous attempts to bring the Waterfront Trust under council control. In 2017 when then Ward seven councillor Donna Skelly attempted to have a review of HWT finances and operations she was unable to get a seconder from a council that consisted of some of the same council members who took part in today’s pretty much unanimous decision to order a probe.
In its early days when the HWT was burning through $6 Million in seed money that it had been granted as the result of the settlement of a legal action between the City and the former Harbour Commission; it operated completely independently of the city—ignoring requests for information, not submitting financials and sometimes ignoring city building permit protocols. Once its independent source of money was used up and it began incurring large financial losses, it became increasingly dependent on the city for construction contracts for its survival, and that called into question, not only its financial viability, but its reason for existence as a separate entity.