EXECUTIVE COMMITTEE – APRIL 17, 2019
Tim Reid, Sandra Masters and Ken Budzak, representing Regina Exhibition Association Limited, addressed and answered questions of the Committee.
The Committee adopted a resolution to concur in the recommendations contained in the report.
Recommendation #3 does not require City Council approval.
Mayor Michael Fougere, Councillors: John Findura (Chairperson), Jerry Flegel, Bob Hawkins, Jason Mancinelli, Mike O’Donnell, Andrew Stevens and Barbara Young were present during consideration of this report by the Executive Committee.
The Executive Committee, at its meeting held on April 17, 2019, considered the following report from the Administration:
RECOMMENDATION
1. That the Executive Director Financial Strategy & Sustainability, as the City’s proxy, be authorized to exercise the City of Regina’s voting rights in REAL at the Annual General meeting taking place on April 30, 2019 as follows:
a) Approve the Annual Report and Audited Financial Statements for the 2018 operating year (Appendix A);
b) Approve the 2019 operating and capital budgets (Appendix B);
c) Appoint MNP LLP as auditor for REAL for the 2019 financial statement year, pursuant to section 149 of The Non-profit Corporations Act, 1995 (Saskatchewan); and
d) Approve the REAL General Bylaw amendments as outlined in Appendix C.
2. That the City Solicitor be instructed to repeal Bylaw 9381, a Bylaw of the City of Regina to Provide for the Appointment of Two Persons to the Board of Directors of the Regina Exhibition Association Limited.
3. That this report be forwarded to the April 29, 2019 meeting of City Council for approval.
CONCLUSION
As the sole voting membership holder of REAL, the City of Regina (City) must exercise its voting rights at the REAL annual general meeting to (i) appoint or waive the requirement of an auditor; (ii) approve the audited financial statements of REAL; (iii) approve the annual report; (iv) approve the budget for the following fiscal year and (v) approve repealed and amended bylaws.
Administration requires delegated authority from City Council in order to exercise the City’s voting rights at REAL’s annual general meeting in accordance with the direction provided by City Council.
BACKGROUND
Effective January 1, 2014, The Regina Exhibition Association Limited (“REAL”) was continued under The Non-profit Corporations Act, 1995 (Saskatchewan) (the “Act”), with the City becoming its sole voting member. This change in structure made REAL a “municipal corporation” of the City. As the sole voting membership holder of REAL, the City must exercise its voting rights at the REAL annual general meeting to (i) appoint or waive the requirement of an auditor (ii) approve amended bylaw and (iii) receive the audited financial statements of REAL.
DISCUSSION
Audited Financial Statements
Pursuant to the Unanimous Membership Agreement, REAL is to provide the City with its’ annual report and audited financial statements, with the audited financial statements to be received by Council. Administration has reviewed the audited financial statements and will be consolidated the information into the City’s financial statements (as is required by accounting standards). Administration found no irregularities or items of concern within the financial statements.
The City of Regina has guaranteed REAL’s debt. As at December 31, 2018, REAL’s debt balance was $6,601,585. The debt agreement between REAL and the financial institution contains covenants or terms that REAL must meet. The financial institution has waived certain covenants for more than a year recognizing REAL has not met them. It is REAL’s view that it will be in compliance with the covenants within one year.
Highlights of the audited financial statements for the year ended December 31, 2018 include:
· A $1,559,479 loss on revenues of $48,153,776.
· An accumulated deficit of $2,765,359 an improvement from an accumulated deficit of $7,178,849 from the previous year.
Appointment of Auditor
As the sole voting member, the City must appoint or waive the requirements for an auditor for REAL pursuant to The Non-profit Corporations Act, 1995 (Saskatchewan). The use of an auditor is best practice and required to ensure public accountability. Administration is recommending that the City and REAL use a common auditor. MNP LLP was appointed as the City’s auditor for a five-year term (2017 to 2021).
Approval of revised REAL’s Corporate Bylaw
As the sole voting member, the City must approve changes to REAL’s corporate bylaws pursuant to The Non-profit Corporations Act, 1995 (Saskatchewan). REAL undertook a review and comparison of its General Bylaw and the Unanimous Member’s Agreement (UMA) resulting in the proposed housekeeping changes to the following Articles to ensure consistency between the UMA and the Bylaw:
a. Article 16; - Repeal
b. Article 17; - Amend
c. Article 18; - Repeal
d. Article 20; - Amend
e. Article 21; - Amend
f. Article 22; - Amend
g. Article 31; - Repeal
h. Article 35; - Amend
i. Article 42; - Repeal
j. Article 45.- Amend
The Board of Directors of REAL approved at their March 20, 2019 meeting the above bylaw changes for consideration by Council. Appendix C outlines the current General Bylaw, the proposed change and the rational for change.
Administration has reviewed the proposed changes and recommends City Council’s approval.
City of Regina Bylaw Changes
Bylaw 9381, A Bylaw of the City of Regina to Provide for the Appointment of Two Persons to the Board of Directors of the Regina Exhibition Association Limited Bylaw is no longer required as the UMA provides a board of directors’ appointment process for REAL.
RECOMMENDATION IMPLICATIONS
Financial Implications
As REAL is a municipal corporation of the City of Regina, the audited financial statements of REAL will be consolidated into the City’s financial statements.
Environmental Implications
None with respect to this report.
Policy and/or Strategic Implications
None with respect to this report.
Other Implications
None with respect to this report.
Accessibility Implications
None with respect to this report.
COMMUNICATIONS
None with respect to this report.
DELEGATED AUTHORITY
The recommendations contained in this report require City Council approval.
Respectfully submitted,
EXECUTIVE COMMITTEE
Jim Nicol, Secretary