The Beacon residential tower seen on a sunny morning. The Nanaimo Economic Development Corporation is no longer in charge of drawing tourists to the city.

Tourism pulled from Nanaimo Economic Development Corporation’s oversight

NANAIMO – Service provider for tourism marketing yet-to-be-determined.

Nanaimo Economic Development Corporation will no longer be in charge of attracting tourists to the Harbour City.

City council decided to pull tourism from the economic development umbrella and have the service handled by another, yet-to-be-chosen provider.

It’s not yet known if the decision will cause any layoffs at the corporation or how tourism will be provided for the community, although city chief administrative officer Tracy Samra has promised no break in service.

The decision was made by council in a closed meeting Oct. 3 to see the corporation solely focus on economic development under a new partnering agreement and accountability strategy while tourism, destination and conference service marketing is handled by one – or possibly more – alternative providers. Business is expected to continue as is at the corporation until the end of the year. The city has also proposed the corporation move into Square One, its own co-working space, as a cost-saving measure.

Council agreed at a public meeting Monday to give the corporation board until Friday to respond to the proposed agreement and efficiency measures.

City councillors expressed satisfaction with the corporation’s board, but they also touched on issues around governance and accountability.

Mayor Bill McKay said the city is the sole shareholder of the corporation and has to have a more active role in its activities.

“It’s been brought to our attention that we weren’t monitoring our corporation as closely as we could have or should have, based on the local government act and community charter,” McKay said, adding work by the city’s senior management team during the last few months determined this. “In order to ensure we’re providing a level of accountability and oversight that we require, a change needed to be made.”

Nanaimo Economic Development Corporation was created in 2011, pulling in a previously separate Tourism Nanaimo. A core review looked at the model this year, and while it considers it best practice, it highlighted challenges and issues the corporation faces, such as ensuring effective governance structures and processes are established and followed, and an inability to earn the trust of council and administration.

Further work by the city, in consultation with stakeholders found overlap and duplication in tourism activities among various stakeholders, challenges with the operation of the Tourism Leadership Committee as well as the delivery of a new hotel tax.

Coun. Diane Brennan said she fears the fix presented will cause more friction and may exacerbate any current problems that have been identified. Coun. Ian Thorpe said what the city is doing with its motion is “fine tuning” in hopes to improve how things operate – more efficiently, effectively and openly.

Coun. Bill Yoachim said he supports economic development and respects the hard work of the volunteer board but he’s comfortable and adamant on the partnership agreement and accountability to taxpayers, adding a 2014 forensic audit by KPMG on the corporation demonstrates the need for accountability and council should follow its recommendation.

Chief financial officer Victor Mema said the KPMG audit cannot be released as it’s still in-camera. The in-camera meeting minutes, including the vote, around council’s decision regarding the corporation, has also not been released.

Coun. Jerry Hong pointed to the corporation’s 17-member board, where he claims only two people are from the tourism industry.

“Can you see how that doesn’t seem to make any sense to me?” he asked. “The economic people and the people we put on the board are great for economic development, but what do they know about tourism?”

Coun. Jim Kipp said he was a “bit disappointed” about taking tourism out of the corporation, but he understands it’s not working and a shift is needed. He also talked about friction with information requested through the CAO, the city’s appointee to the corporation’s board, and resulting push back.

“We’ve been asking for their accountability things,” he said to the News Bulletin when asked what information was sought.“You have heard the KPMG report, it showed some, I’ll say, lack of some consistent auditing practices …we’ve asked for more clean up on those and asked information about our shareholder accountability and transparency.”

Kipp said the corporation was set up to be arm’s length, but the city is the shareholder and has to be accountable to it and that wasn’t done.

John Hankins, chief executive officer of the corporation, said he respects the city’s decision as a shareholder to make changes to the area of focus. He did say its tourism team looks forward to being part of the city’s process.

“Certainly the city is endorsing NEDC to move forward on the economic development side of things which we are excited about and as cities get bigger having one team that focuses on economic development and another team that focuses on tourism, it’s very standard practice in many other jurisdictions,” he said.

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