The Gimli Community Development Corporation (CDC) held an annual general meeting last week at which no financial details about the corporation’s past spending and revenue were shared, as well as no details about what it will be budgeting for 2024.
The hour-and-a-half-long meeting, which was attended by six members of the public, took place on July 3 and shed no light on the corporation’s overall financial position.
CDC secretary-treasurer Randy Swanson, who said he was appointed to the board “a little over a year ago” and just recently assumed the secretary-treasurer role, provided a verbal “financial report” of the CDC that contained no details about the corporation’s revenue and expenses, no details about spending on projects or services and no details about any possible compensation that board members are entitled to under the corporation’s bylaw of 2010.
Swanson spent a great deal of time talking about the history of community development corporations in municipalities and First Nation communities, previous iterations of the Gimli CDC, different levels of opinion that a financial auditor can provide, auditors’ engagement and attestation letters, the idea of having an “onboarding process” for Gimli CDC board members, that “all six members of the board are actively involved in business,” and difficulties that both he and the CDC’s chartered accountant encountered trying to find documentation.
Swanson spoke about finding “gaps in things,” “opening closet doors,” and “getting our house in order” with regard to governance of the Gimli CDC.
He noted the corporation is late filing its return with the corporation’s office, the board’s 2024 AGM was late by a number of days, and that Canada Revenue Agency is assessing the corporation regarding GST returns that “had not been filed for a period of time” but now are.
“One thing that delayed calling the AGM was that we didn’t get our audited financial statements until last week,” said Swanson. “And one of the problems that the auditor had was that they had the same issues that the board members have in finding information.”
Swanson said board members don’t know what their jobs are, and that he’s recommending they ask Gimli council for a mandate letter to “understand what our job description” is, as well as to determine what assets the CDC should manage versus those the RM should manage.
“The fact of the matter is what we’re missing, if I can use that term, is what I call a mandate letter. Here is your job description. Go for it. And I think it’s an important thing,” said Swanson. “If you look at the operating bylaws, one of the things it says in there is that board members are not entitled to any compensation at all or reimbursement for any expenses. So what does that tell you? It tells you a volunteer board for the most part. And so Larry, myself, Melanie, Dean we’re not entitled to be reimbursed, and if we’re purely volunteers then the question is ‘Ok, what do we want out of volunteer board members?’ Hence the mandate letter. We’re not going to be reimbursed in any way, shape or form, then how much time should we be spending? How much time should anyone expect of volunteer board members?”
After having admitted early in the meeting that he had read the CDC’s bylaw [either part of it or all of it], Swanson voluntarily corrected himself later in the meeting by saying board members can in fact be reimbursed for CDC business that’s conducted “outside” the municipality, such as for business trips. But he didn’t share any details about whether or not any of the board members received compensation.
With regard to the CDC’s recordkeeping and management of records, Swanson said he could not find past minutes, doesn’t know whether an AGM was held in 2022 and can’t find documentation for certain things. By way of example, he said he can’t find an invoice to show what refund is owed to an [unnamed] organization for a deposit it made in 2022.
“One of the challenges we have is finding the information. Unfortunately, if you asked me for certain things right now, I have to tell you, ‘I can’t give them to you. I don’t know where they are, you know?’ I can tell you the rest of the board members will tell you it’s frustrating,” he said.
Swanson then touched on the corporation’s financial position at different unspecified periods in time.
“As the corporation went along, there was money in the corporation because they ran into a period of good luck where they had renters for some of the assets and it built up the bank account,” said Swanson. “But in terms of what the CDC was used for was up to the mayor and council at the time. And so what you’ve got is a period of time where the CDC lost a lot of money. It was losing money. It was losing money at a rate of about a quarter million dollars a year. And we had a period of time where it made a lot of money, too.”
Vice chair Melanie Specula shed some light on CDC finances by saying the dormitory – which currently houses Ukrainian and other newcomers and provides the CDC with some rent revenue – had sat empty for a number of years during the COVID pandemic, but still required the disbursement of funds to operate it [heat, insurance, etc].
“That’s where large chunks of the money went,” said Specula. “But there was no money coming in [and] there was still all the bills to pay.”
Swanson said when he joined the CDC board, the dormitory was “losing money at a rate of $20,000-$25,000 a month” and one of the things the board looked at was “how to stop the bleeding. There’s all this money coming out of the corporation and it’s not right. We have to stop it somehow.”
They looked at expenses, new revenue streams, groups to whom they could rent the dorm and the idea of using it as transitional housing for Ukrainian refugees, he said.
“It’s been a lot of hard work and particularly, Mel, I give you a lot of credit in terms of the things you’ve done in helping to drive that. But we’re at the point now where we have more than 65 rooms rented out at $375 and so our financial reporting now should show at least break even if not profitable,” said Swanson.
In his comments over the course of the meeting, CDC chair Kevin Chudd – who has now sat on the board for a year and a half – did not provide any detailed financial information about the CDC. He instead spoke about financial losses incurred by the Gimli airport, which does not fall under the management or the budget of the CDC. The airport is the municipality’s responsibility.
He did, however, speak about the CDC’s role in housing.
“When it comes to the role of the CDC, it was mentioned at a previous meeting the press was at, is until we get and maybe this is a lead role for the CDC to play assisting with the municipality as we get our land use development plan modernized for our community,” said Chudd. “Previously, military and civilian had to be segregated. That’s with CFB Gimli being an island on its own. For everything to be successful, we have to grow together. With the revenue sources that we have potentially from that will help offset a lot of expenses in the future, as well as make the industrial park that much more sustainable.”
Swanson called for a motion to adopt the CDC’s audited financial statement [from Reid & Miller Chartered Professional Accountants] and asked that it be accepted in “draft form” as there may be adjustments the auditor has to make. He also asked for approval of a special resolution regarding financial statements for the fiscal years ending Dec. 31, 2019 through to Dec. 31, 2023. Both motions were carried.
“I’m comfortable that we haven’t held anything back. I’m comfortable that all purchases are in order,” said Swanson. “By the way, the bylaws don’t set out how we should be making our purchases and what form or format we should be using in order to pay our bills. So, I guess it’s kind of up to us or we need guidance from council if they want something different.”
The board provided meeting attendees with an undated and unsigned document titled “Plan 2024, a plan for the CDC to help the RM of Gimli achieve profitability of the Gimli Industrial Park, training center [stet] and facilities and economic, social and community returns.”
Plan 2024 sets out broad major goals and objectives: to establish a committee to attract enterprises to Gimli, to act as agent to the RM, to be seen as leaders in the use of technology and to stimulate population growth. It also notes “tasks to complete” which include governance protocols, a communication strategy and a marketing strategy. The board approved a motion to accept the plan.
With regard to a budget for 2024, the CDC board did not provide any details during its AGM as Swanson said “we are working on a budget.”
The Plan 2024 document, however, states under the Finances section that: “RM of Gimli to establish a budget for CDC to carry out its mandate.”
The corporation’s seven-page bylaw titled the “Gimli Community Development Corporation By-law No. 1 A,” adopted April 16, 2010, states in Section 23 under Financial Administration that “the board of directors shall develop a budget for the operation of the Gimli Community Development Corporation” as well as a “new and existing project status report on an annual basis.”
It’s unclear who will be establishing the 2024 budget for the CDC.
A Gimli resident, who did not provide her name, asked CDC board members if they had signed a conflict-of-interest statement.
“No. Hence my comment earlier: you ask me for things, I cannot give them to you. I shouldn’t say no: I don’t know if there is one. I know I didn’t sign one,” said Swanson, then segued into a discussion about motorsports park contacts.
“You are business owners and work for the board, so is there conflict [of interest] at times?” asked the resident again.
“Nothing has ever been brought to the board’s attention on conflict of interest of this board,” said Chudd. “We do [self-manage]. That’s the part we do. If there is something, we have our own protocols that we do. Same with council.”
“It’s basic for a board to have a conflict-of-interest document they sign. I think that’s pretty common,” said the woman again.
“No, it’s not. I don’t [think] that any of the boards in the community,” said Chudd, who added a review of the Municipal Act should be done to look at conflict of interest and that federal and provincial governments have such a thing but “municipal is different.”
The Gimli CDC’s 2010 bylaw contains nearly a full page of conflict-of-interest policies and guidelines for directors and officers of the corporation.
The resident also asked how she “as a taxpayer” could access the CDC’s financial statement, to which Swanson said: “It’s in our plan for this year that we got to come up with a communications strategy that is, in my view, far more effective than what we’ve been doing.”
The Express asked board members several times whether there’s a provision in what Swanson had earlier called the CDC’s “draft” policies and procedures regarding the media attending and recording its meetings.
Chudd said the municipality requires 48 hours’ notice to record. The Express pointed out that this is a CDC meeting, not a municipal council meeting.
Specula said: “To my knowledge, as far as that goes, no, we don’t have a procedure.”
Chudd quicky added: “For allowing it,” thereby implying that the very absence of such a provision means it’s not allowed.
“We don’t have a procedure to allow it,” Chudd continued. “That’s what we’re going to be working towards. We thought [what] we’d have today was livestreaming because our board supports livestreaming.”
The Express requested a copy of the auditor’s financial statement a few days after the CDC meeting, but it was not forthcoming.
