Harbour Authority Manual

2. Administration

Table of Contents

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Introduction
Administration
Finance
Harbour Operations
Environmental Management
PDF Version

2.1	Setting up the Operation
2.2	Roles and Responsibilities
2.3	Human Resources
2.4	Records Management

2.1 Setting up the Operation

2.1.1	Preparing to incorporate
2.1.2	Incorporating
2.1.3	Staying incorporated
2.1.4	Leases, subleases, and licences
2.1.5	Insurance
Also:	Reference Material #1
	Appendix 2-A Corporations Canada, Industry Canada
	Appendix 2-B Provincial Registrars

2.1.1 Preparing to incorporate

Incorporating a non-profit organization is one of the first steps toward managing and operating a public fishing harbour as a Harbour Authority. A corporation, which is considered a distinct legal "person", provides a permanent, legal structure through which individuals act together for a common purpose. It also limits the liability of its individual members. A corporation shields members of its Board of Directors from most liability for their actions. Organizations that are not incorporated generally do not offer this protection. A corporation is independent of its individual members; the coming and going of members does not affect the organization. A corporation can hold title to property, enter into contracts, and borrow money. Members of non-profit corporations are prohibited from receiving any financial gain from their association with the corporation. Further information can be found in Section 2.2.1, under Liability.

Harbour Authorities can be incorporated federally or provincially. Most existing Harbour Authorities are federally incorporated. Federal incorporation of non-profit organizations falls under the Canada Corporations Act, Part II, which is administered by the Corporations Directorate of Industry Canada. Information on incorporating is available from the Corporations Directorate. See Appendix 2-A for details.

To find out the requirements for provincial incorporation or a business licence, prospective Harbour Authorities should contact the appropriate provincial registrar's office. These offices are listed in Appendix 2-B. The decision to incorporate federally or provincially should be made in consultation with a lawyer who can explain the advantages and disadvantages of each type of incorporation.

Information Kits
The Corporations Directorate has developed a series of information kits (see Appendix 2-A). The kit on the creation of a non-profit corporation, for example, contains a sample application, model by-laws, a policy summary, a checklist, the fee schedule, and copies of the required documents. These documents can be completed by the founding members of the Harbour Authority. Obtaining legal assistance is recommended. Small Craft Harbours (SCH) can also provide this information kit to prospective Harbour Authorities.

2.1.2 Incorporating the Harbour Authority

To federally incorporate a non-profit organization, an application to the Corporations Directorate must include:

1. the filing fee;
2. an affidavit or statutory declaration of one of the applicants stating that the contents of the application are true, that the applicants are eighteen years of age or older, that the corporation's proposed name is not objectionable or already in use, and that no public or private interest will be prejudicially affected by the incorporation. The affidavit must be sworn before a commissioner for taking oaths;
3. a copy of the corporation's proposed by-laws (discussed below);
4. a search report of the corporation' proposed name;
5. a covering letter specifying the street address of the corporation's head office;
6. an application for Letters Patent (the articles of incorporation), detailing:
   • the name of the Harbour Authority;
   • the names, addresses, and occupations of the individual applicants (i.e., first directors);
   • the location of the Harbour Authority's head office;
   • the objects of the Harbour Authority (i.e., the activities in which it is engaged);
   • the capacity of the Harbour Authority to carry on business throughout Canada;
   • borrowing powers (optional);
   • the signature of each applicant, and the place and date of the signing;
   • the wind-up clause;
   • the no-purpose-of-gain-for-members clause; and
   • other clauses or statements.

Several of these items deserve special mention.

Number of applicants and first directors
Although no restriction applies to the number of founding members or applicants, three applicants are sufficient to constitute the first Board of Directors. Individuals other than the applicants may be part of the first Board as long as the application states that these additional people have consented to be directors.

Objects of the corporation
The "objects of the corporation" clause is a statement about the activities in which the Harbour Authority is engaged. It should be written to reflect that the objects of the corporation are to operate, maintain, and manage a public fishing harbour or harbours and associated services.

No-purpose-of-gain-for-members clause
Incorporation documents must contain a "no-purpose-of-gain-for-members" clause if the Harbour Authority is to qualify as a non-profit organization. The clause states that no members of the corporation will receive profits from the corporation. The clause reads:
"The Corporation is to carry on its operations without pecuniary gain to its members and any profits or other accretions to the Corporation are to be used in promoting its objects."
This clause implies that no loans or transfer of profits to members or directors are permitted. Because employees receive income from the Harbour Authority, it may be preferable for employees of a Harbour Authority to refrain from becoming members of the Board of Directors. Such an arrangement may be perceived to be in conflict with the "no-purpose-of-gain-for-members" clause. However, the clause does not prevent the Board from paying for expenses incurred by Board members in fulfilling their duties, or from paying a stipend or compensation to Board members for attending Board meetings.

Notwithstanding the "no-purpose-of-gain-for-members" clause, a Board member or director may conduct business with the Harbour Authority as long as that individual does not use membership on the Board to influence the Board's decisions. Board members and directors should also disclose conflicts of interest and refrain from participating in discussions at Board meetings regarding contracts that may be awarded to them. Please see Duties and obligations under Section 2.2.1 for more information.

By-laws
The application for incorporation must also include a copy of the corporation's proposed by-laws. By-laws are the rules that govern a corporation's internal affairs; they describe the way that a corporation operates

By-laws vary from organization to organization; however, the Corporations Directorate directs that by-laws for non-profit corporations cover the following topics:

• conditions of membership;
• directors and their duties, powers, and indemnities;
• members' meetings (notice, quorum, voting rights);
• the appointment, term of office, duties, powers, remuneration, and removal of directors, officers, and committee members;
• the appointment of an auditor;
• the amendment of by-laws;
• the custody of the corporate seal;
• the certification of documents; and
• other matters of significance to the Harbour Authority.

The model by-laws contained in the information kit can help the Harbour Authority founding committee to draft its proposed by-laws. Founding members may wish to obtain a copy of by-laws from another recently incorporated Harbour Authority for reference purposes.

These documents should be sent directly to the Corporations Directorate in Ottawa.

Charter by Letters Patent
Once the application for incorporation is approved, Industry Canada grants a Charter by Letters Patent. A Charter is the right granted to an organization to act as a corporation. Letters Patent, also known as "articles of incorporation", are the documents that constitute a Charter. Letters Patent specify the provisions under which the corporation will exist. These provisions are permanent and can be changed only by applying for Supplementary Letters Patent (SLP). (See Section 2.1.3, Staying incorporated.)

Letters Patent consist of:

1. a cover letter, signed under the seal of the Minister of Industry, granting corporate status; and
2. the application form and other documents forwarded by the founding members as part of the application for incorporation.

The Corporate Seal
Once the Harbour Authority has been incorporated, it must obtain a corporate seal. The seal is used to authenticate documents (e.g., legal agreements such as leases and subleases; some banks require the seal of the corporation on banking documents). The seal can be an impression seal or a rubber stamp. It can be ordered from a firm specializing in corporate seals or rubber stamps. The Harbour Authority by-laws will specify the officer who is custodian of the corporate seal, where the seal should be kept, who can use the seal, and when the seal should be used.

2.1.3 Staying Incorporated

Amendment to Letters Patent
A Harbour Authority may wish to change its name, objects, or other provisions in its Letters Patent. This type of change requires the drafting of a new by-law which must, in turn, be approved by the Board of Directors and formally approved by the entire membership, in accordance with the directives set out by the Corporations Directorate of Industry Canada. The Harbour Authority must then apply to the Corporations Directorate for Supplementary Letters Patent (SLP). An application for SLP must include:

1. an application form;
2. an affidavit or statutory declaration of an officer attesting to the due passage of the by-law (by the directors and by the members) on a specific date;
3. two copies of the by-laws of the corporation certified by an authorized officer of the corporation;
4. a name search report if the name of the corporation is to be amended;
5. the filing fee; and
6. a cover letter

Note that a change of address within the same municipality does not require a new by-law. Instead, it must be indicated on the Annual Summary. (See Section 2.4.4, Reports.) Before the Annual Summary is completed, a letter to the Corporations Directorate specifying the new address would suffice.

Amendment to by-laws
A Harbour Authority may wish to amend one of its by-laws. The change could involve enacting a new by-law, changing a current by-law, or revoking a current by-law. A by-law amendment requires the approval of a majority of directors at a meeting of the Board, and ratification by at least two thirds of the membership at a meeting called for this purpose. The Harbour Authority must then apply to the Corporations Directorate for Ministerial approval of the new, amended, or revoked by-law. To do so, the Harbour Authority must submit:

1. a letter requesting Ministerial approval and showing the exact change to the existing by-law and the date on which the change was sanctioned by the membership; and
2. a consolidation of the existing by-laws in which a number of amendments have been made.

No fee is charged for this service.

Filing requirements
Harbour Authorities must comply with certain filing and reporting requirements to maintain status as a corporation. Under the Canada Corporations Act, a federally incorporated Harbour Authority is required to submit an Annual Summary to the Corporations Directorate. See Section 2.4.4, Reports and Section 3.4, Government Reporting Requirements, for more information.

Reporting requirements to the members
A Harbour Authority must fulfill the following basic reporting requirements:

• hold an annual general meeting once every calendar year,
• maintain the minutes on record, and
• present an annual report to the members.

These requirements are discussed in greater detail in Section 2.4, Records Management.

2.1.4 Leases, subleases, and licences

Leases, subleases, and licences are contractual agreements, between two or more parties, that are enforceable under the law. All such documents should be reviewed by a lawyer unless they are standard-form documents that the Harbour Authority uses on an ongoing basis and that have previously been reviewed by a lawyer.

Leases
A lease is a contract between a Harbour Authority and the Department of Fisheries and Oceans (DFO) whereby DFO relinquishes exclusive possession of its land and facilities to the Harbour Authority for a specified period of time. Under the lease used in the province of Quebec, DFO gives the enjoyment of its property and facilities to the Harbour Authority for a specified period of time and for a rent. A Harbour Authority uses the land and facilities to operate a public commercial fishing harbour.

The lease arrangement allows a Harbour Authority to sublease the land and its improvements to third parties, if DFO consents, and also to collect the revenues associated with the subleases.

The lease arrangement further entitles a Harbour Authority to issue licences (and to collect licence fees) that allow third parties to use the leased property to carry out particular businesses.

The Board of Directors should be familiar with the terms and conditions contained in the lease document. The document clearly describes obligations that the Harbour Authority must meet to continue to manage the leased property.

Subleases
A Harbour Authority may sublet part of the leased facilities (i.e., sublease a parcel of land) to third parties to take advantage of the ability of the harbour to generate revenue. A sublease is an agreement between the Harbour Authority and the party subletting the property. The consent of DFO is also involved. A Harbour Authority requires the written consent of DFO before signing a sublease for the land and facilities leased from DFO.

Notwithstanding the involvement of a third party in the sublease arrangement, the Harbour Authority retains some rights or interest, as well as the obligations contracted under the original lease, with respect to the property subleased. As with leases, subleases do not relinquish title to the land or its improvements.

The insurance policies of a sublessee should provide liability coverage to the Harbour Authority. The insurance policies should be primary, non-contributing, and not in excess of any insurance available to the Harbour Authority. This means that the sublessee's insurance must be exhausted before any of the lessor or sublessor's insurance is required to contribute for a loss. The Harbour Authority should be named under the policy.

Licences
A licence is a personal contract between two parties. It does not give an interest in land. Rather, it is the right, given by the owner or lessee of land, to another party, to use land in a certain way, for a certain purpose, and on certain terms while that land remains, in other respects, in possession and under the control of the owner or lessee.

Harbour Authorities may issue licences for the provision of such things as space for fish offloading, tour boats, and fuel pumps, for example.

To avoid being held liable for the activities of a licensee, a Harbour Authority should ensure that the licensee carries adequate liability insurance coverage.

The following terms and conditions are found in a standard licence agreement:

• the amount payable and when;
• the interest penalty that will apply in the event of non-payment;
• the need to comply with applicable laws and regulations;
• the requirement for comprehensive general liability insurance coverage;
• the right to request proof of insurance coverage;
• a cancellation clause;
• a statement to the effect that the rights under the licence cannot be transferred or assigned;
• a clause that addresses the issue of potential damage to the facilities;
• a clause that ensures continued public use or public access to the site under licence;
• a clause that addresses the state of the facilities at the end of the licence agreement;
• signatures of both the licensor and licensee;
  the date; and
• other clauses, as applicable.

2.1.5 Insurance

Small Craft Harbours has arranged for liability insurance coverage for all Harbour Authorities through a Comprehensive Marine General Liability Insurance policy. The policy provides protection against potential legal or contractual claims from third parties that may arise from the operation of a Harbour Authority. SCH will pay the policy's premiums until March 31, 2001, after which date Harbour Authorities will be responsible for obtaining their own comprehensive marine liability insurance at their own expense.

The current policy provides individual coverage to a Harbour Authority for up to $20 million for each claim arising from property damage and bodily injury to third parties. Under the policy, each claim is subject to a deductible of $500.

The policy covers volunteer and paid employees of the Harbour Authority who are injured while performing their duties. It does not cover errors and omissions arising from an act or omission in rendering or failing to render professional services. While it covers sudden and accidental pollution, it does not cover gradual pollution or pre-existing environmental impairment discovered during the policy period, regardless of whether the Harbour Authority had prior knowledge of it. Nor does it cover directors' and officers' liabilities related to mismanagement, payment of salaries, taxes, breach of contract, and other liabilities. Directors' and officers' liability insurance is the responsibility of each Harbour Authority, should it choose to obtain such coverage.

The insurance coverage takes effect as soon as the lease is signed. At that time, Harbour Authority officials must complete a questionnaire on liabilities to ensure that major exposures are identified. This document helps determine the requirements for future insurance protection.

Reference Material

MacLeod, Flora. Forming and Managing a Non-profit Organization in Canada. Third edition. Vancouver: Self Counsel Press, 1995.

Appendix 2-A - Corporate Canada, Industry Canada

Corporations Canada
Industry Canada
9th Floor, Jean Edmonds Towers South
365 Laurier avenue west
Ottawa, ON K1A 0C8
General Inquiries: (613) 941-9042
Fax: (613) 941-0601
Toll-free: 1-866-333-5556
Email: http://strategis.ic.gc.ca/epic/internet/incd-dgc.nsf/Mail/Corporations_Canada (Please provide contact name, email address, business address, telephone number and fax number).
Website: http://strategis.ic.gc.ca/epic/internet/incd-dgc.nsf/en/Home

The following information kits pertain to the sections of the Canada Corporations Act that are most relevant to Harbour Authorities incorporated under federal jurisdiction:

• Information Kit on the Creation of Non-profit Corporations
• Information Kit on How to Amend the Provisions of the Letters Patent
• Information Kit on How to Amend Your General By-laws
• Information Kit on How to Surrender Your Charter and Dissolve

Appendix 2-B Provincial Registrars

British Columbia:
Ministry of Finance and Corporate Relations
Government Services and Registries
Victoria, British Columbia
(250) 387-7848 or (250) 775-1041

Alberta:
Corporate Registry
Edmonton, Alberta
Edmonton: (403) 427-2311
Calgary: (403) 297-3442

Saskatchewan:
Department of Justice
Corporations Branch
Regina, Saskatchewan
(306) 787-2970

Manitoba:
Department of Consumer and Corporate Affairs
Corporate Branch
Winnipeg, Manitoba
(204) 945-2500

Ontario:
Ministry of Consumer and Commercial Relations
Companies Branch
Toronto, Ontario
(416) 314-8880 or 1-800-361-3223

Quebec:
Direction des entreprises
L'inspecteur général des institutions financières
Quebec City, Quebec
(418) 643-3625

New Brunswick:
Department of Justice
Corporate Affairs
Fredericton, New Brunswick
(506) 453-2703

Prince Edward Island:
Department of Community Affairs and Attorney General
Consumer, Corporate and Insurance Division
Charlottetown, Prince Edward Island
(902) 368-4550

Nova Scotia:
Department of Justice
Registrar of Joint Stock Companies
Halifax, Nova Scotia
(902) 424-7770

Newfoundland:
Department of Justice
Registrar of Deeds and Companies
St. John's, Newfoundland
729-3316

2.2  Roles and Responsibilities

This section describes the roles and responsibilities of the various individuals and groups involved in the Harbour Authority including:

2.2.1	The Board of Directors
2.2.2	Planning
2.2.3	Officers of the corporation
2.2.4	Committees
2.2.5	Harbour Authority membership
2.2.6	Harbour supervisor
2.2.7	Department of Fisheries and Oceans (DFO)
Also:	Reference Material #2
	Appendix 2-C - Conducting Board Meetings.
	Appendix 2-D - Glossary of Terms Used in Board Meetings
	Appendix 2-E - Sample Meeting Agenda

2.2.1 The Board of Directors

The Board of Directors is responsible for managing the property and business of the Harbour Authority, and for the overall direction and supervision of the organization. The Board is not responsible for carrying out day-to-day operations; this is the responsibility of officers and employees. The distinctions often blur in small, all-volunteer organizations. Smaller Harbour Authorities are managed by a working Board, where directors may be directly involved in day-to-day activities.

Activities

The Board of Directors is involved in the following activities:

• determining the objectives and policies of the Harbour Authority;
• developing and implementing business and financial plans for the Harbour Authority;
• ensuring that the Harbour Authority is carrying out its objectives, as stated in its articles of incorporation;
• monitoring the organization's financial health and taking corrective action where necessary; and
• managing employees.

Powers

The Board of Directors has the following significant powers:

• setting user fees;
• setting the rules and regulations that govern the use of leased Harbour Authority property and behaviour on the property;
• employing the people necessary to manage the leased area and contracting out projects as necessary;
• setting a budget and controlling its costs;
• expelling members for cause;
• borrowing funds; and
• setting membership fees or dues as directed in the by-laws.

Responsibilities

The primary responsibility of the Board of Directors is to protect the business interests of the Harbour Authority, which include the operation, maintenance, and management of a public commercial fishing harbour or harbours, and the provision of associated services.

The Board meets as often as necessary to discuss issues and resolve problems. It may delegate certain responsibilities, such as signing cheques, to staff or specified officers so that routine matters are handled between meetings.

The Board also has responsibilities pertaining to employees (in most cases, the harbour supervisor). The Board is responsible for hiring and supervising employees, developing job descriptions, and conducting interviews. For more information about the roles and responsibilities of the harbour supervisor, see Section 2.2.6, Harbour supervisor. Recruitment is discussed in Section 2.3.1.

The Board establishes policies that describe how it will govern and how it will organize its work. These policies should clearly indicate the roles that are being assigned and the individuals to whom they are being assigned, the organizational structure, and the reporting relationship. Examples of issues for which policies should be developed include recruitment, fueling, maintenance and repair, garbage, waste oil, property damage, personal injury, berthage, and a code of conduct for directors.

Structure

The structure of the Board of Directors should facilitate efficient decision making and should enable work to be carried out efficiently regardless of whether the Harbour Authority manages one or many harbours, and whether the Board of Directors is constituted of fishers only or whether it includes members of the community.

The founding members of a Harbour Authority must address the following questions regarding the Board's structure and procedures:

1. What is the best size and composition for the Board?
2. How many formal offices should exist (president, past president, vice-president, treasurer, secretary, etc.)?
3. What committees should be created?

No single best method exists for structuring an organization; the Board must implement structures and procedures that fit its particular requirements.

Composition

The composition of the Board of Directors is an important consideration for the success of a Harbour Authority. A broad representation on the Board of all harbour users and interested parties will best support its activities, revenue opportunities, and future development. The number of directors and the sectors that they represent are set out in by-laws: important decisions as to the number of directors and the sectors that they represent must be made by the founding members before incorporation, because by-laws must be included in the documents forwarded to the Corporations Directorate.

Harbour Authorities may wish to consider Board representation from a number of sectors such as commercial fishers, recreational boaters, native persons, business persons, and other harbour users. The founding members may decide that the commercial fishing sector should have greater representation to ensure that the interests of commercial fishers are well served.

Once the Harbour Authority has determined the sectoral composition of the Board of Directors, it must determine how many directors are to represent each sector. The smaller the Board, the more difficult it will be to reflect the views of the interested parties. The larger the Board, the more difficult it is to arrive at a consensus. An odd number of directors ensures that votes will not end in ties.

Continuity

To be effective and dynamic, a Board requires a balance between experienced and new Board members. New Harbour Authorities should consider staggering the length of the directors' appointments to ensure a Board that reflects this balance. For example, at incorporation, half the directors might be elected for a two-year term, and the other half for a one-year term. Subsequently, all directors would be elected for a two-year term in elections held every year. This arrangement would provide a continual influx of new Board members and the continuous presence of experienced members. The founding members would detail this arrangement in the by-laws.

Elections for new directors may be required at mid-term, particularly for a newly formed Board. Otherwise, unforeseen resignations may have the effect of overloading the remaining Board members, if too few are left to carry out the work.

When recruiting new Board members, consideration should be given to the types of skills (management, accounting, municipal affairs, public relations) needed on the Board.

The process to appoint new directors is stated in the corporate by-laws. To qualify, a director must be an individual, 18 years of age or older, with power under the law to contract. Directors are elected, at a meeting held for that purpose, by the membership or by the group of members that the director represents, in accordance with the by-laws.

It is important to remember that directors are unpaid volunteers and that they require support and an evenly distributed workload. Board members must keep Board business separate from the operation of the harbour.

Meetings

Decisions regarding the Harbour Authority are generally made at meetings of the Board of Directors. To be efficient and productive, the meetings should be well-organized, and the rules of conduct properly communicated. The purpose of a meeting may be to:

• carry out the official business of the organization;
• plan an event or course of action; or
• resolve or manage conflicts.

A formal process governs how items are discussed and decided upon at Board meetings. This process is described in Appendix 2-C. A glossary of terms used in Board meetings is found in Appendix 2-D.

Attendance
To fulfill their obligations, directors must attend meetings. The Board may want to establish a compulsory attendance policy: for example, Board members are required to attend at least two thirds of all meetings.

Frequency and times
No fixed rule exists about the frequency of official meetings of the full Board. Meetings should be held when there is enough relevant business to discuss.

Agenda
An agenda outlines the items to be discussed at a meeting. It can greatly assist Board members in identifying problems and issues. An agenda helps to organize the meeting and provides a framework for decision making.

An agenda covers the following matters:

• routine business, such as the review and approval of the minutes of the previous meeting, correspondence, employee and committee reports, and financial updates;
• business arising from the previous meeting, or unfinished business;
• new business; and
• the date of the next meeting.

Characteristics of a productive agenda are:

• It contains sufficient, clear, and relevant information.
• The accompanying material is directly relevant to discussion items on the agenda.
• Important items are listed at the beginning and less important items at the end.
• Items within groupings such as routine business, business from previous meetings, and new business, are listed in order of priority.
• It includes the names of the people responsible for an item, an approximate time for dealing with the item, and the outcome sought (a discussion leading to a decision, or an item for information only).

Controversial items may lead to further study by a Board member or by a committee. All unfinished business should be carried forward or, if handled by the executive committee, reported at the next meeting and recorded in the minutes. The secretary must track the work that was delegated to ensure that the resulting recommendations are eventually considered by the Board. Board members must prepare in advance for meetings by reading the agenda and the material provided, and by preparing in whatever other way is necessary to feel comfortable with the topics to be discussed. The agenda should therefore be forwarded to members well in advance of the meeting.

See Appendix 2-E for a sample meeting agenda. Notice that the agenda allows for the addition of items at the beginning of the meeting; the group in attendance must agree to the addition of an item or items. Members should recognize that the meeting time may have to be extended, or some agenda items postponed to subsequent meetings, if such additions are made.

Rules of order
Rules of order state the behavioural standards that will permit members to conduct the business of the meeting without interruption. Rules of order should be developed by the Board and agreed to by the membership. Two examples of rules of order are: all issues must be voted upon; and an objection by a member must be noted in the minutes. The chair has the duty to ensure that the rules of order are observed.

Board manual
The Board of Directors manual should contain all of the Harbour Authority's formal documents including:

• a copy of the Letters Patent and by-laws;
• a copy of the lease;
• the most recent annual report;
• the current budget and financial report;
• a list of the Board's responsibilities;
• a list of the committees and their terms of reference;
• a list of Board members, including their addresses and telephone numbers;
• information about meetings, including when and where they will be held, and their duration;
• simplified parliamentary procedures;
• minutes of recent meetings;
• a Board calendar;
• long- and short-term goals;
• an outline of contractual relationships (e.g., lease, employment contract, others); and
• job descriptions for employees, if any.

Every director should have a Board manual.

Directors

Roles
In carrying out their duties and responsibilities, directors play the roles of decision makers, advisers, and implementers.

• As decision makers, directors may participate actively by making suggestions and voting on them. They may choose, on the other hand, to take a more passive approach, simply monitoring the work of others and ratifying the resulting recommendations.
• As advisers, directors may provide information and expert advice to others.
• As implementers, directors carry out activities specified by the Board.

Duties and obligations

Directors are responsible for the management of the Harbour Authority. They therefore have certain duties and obligations to the organization, to its members and employees, and to the various levels of government.

Each director must meet two basic requirements:

1. The individual must be committed to the Harbour Authority, must support what the Harbour Authority is trying to achieve, and must want to help; and
2. The individual must have the time and energy to accomplish the work required of a director, and should bring experience and expertise to that work.

Directors must act honestly, in good faith, and in the best interest of the organization. Directors must not let personal interest influence their actions as a Board member. Directors should be aware of potential conflicts of interests that may arise from their duties and must be cautious when conducting business with their own Harbour Authority. As mentioned earlier, a policy should be developed to help prevent real or perceived conflicts of interest. Directors must exercise a minimum standard of care in the performance of their duties as directors.

Directors must also ensure that the Harbour Authority meets requirements imposed by law. Each Harbour Authority should identify applicable legal requirements under federal and provincial laws, as well as under municipal by-laws.

Liability

Liability is a finding of legal responsibility in either a criminal or a civil action. Because a corporation is considered a distinct legal "person", directors are normally not liable for most of the corporation's actions.

To avoid liability, directors should:

• understand the obligations of being a Board member;
• be prepared to take the time needed to fulfill the obligations of directorship;
• recognize where risks may lie; and
• obtain independent legal advice, when necessary.

Sometimes, however, a Board member may be liable for decisions made as a director. Some of the potential liabilities to which Harbour Authorities and directors may be exposed are:

• bodily injury (e.g., physical harm);
• property damage (e.g., boat, vehicle, other);
• contractual liability (e.g., fulfilling contracts, cancelling contracts, other);
• personal injury liability (e.g., invasion of privacy, sexual harassment, libel and slander, other);
• directors' and officers' liabilities (e.g., conflict of interest,
• lack of care or diligence in work done and advice given); and
• other liabilities related to the specific activities conducted at the Harbour Authority (e.g., environmental liabilities).

Minimizing potential liabilities

Directors have a fiduciary responsibility to the Harbour Authority: that is, they must be active, prudent stewards of the organization. Fiduciary responsibility is a fundamental duty of the Board of Directors. A fiduciary must act prudently on behalf of the organization, exercising at least as much care as a prudent person would in administering his or her own affairs. Examples of actions that directors should take to fulfill their fiduciary responsibilities include:

• reading and understanding the organization's articles of incorporation, by-laws, and lease, and ensuring that the organization is operating in accordance with them;
• becoming familiar with the organization's activities and budget, and ensuring that all are in accordance with the organization's stated purpose;
• attending all Board meetings and, before each meeting, ensuring that all documents and reports to be voted on have been received and read;
• carefully reviewing the minutes of all meetings;
• asking for clarification regarding projects, budget items, contracts, and other arrangements or decisions that are unclear;
• holding employees accountable in accordance with the employment agreement between the organization and the employee;
• implementing internal controls to oversee cheques and execution of contracts;
• maintaining a director's manual containing all corporate documents and relevant information, and ensuring that it is kept up to date;
• recognizing potential conflicts of interest and taking appropriate measures to avoid them; and
• obtaining independent legal advice when necessary.

For additional protection against liability, the Harbour Authority might consider:

• Indemnification. The organization pays the director's expenses, such as legal fees and judgments if a director is sued for something done on behalf of the organization. The articles of incorporation or by-laws must provide for indemnification if it is desired. Indemnification protects a director only if the organization has the financial resources to pay the director's expenses.
• Insurance. Officers' and directors' liability insurance can be purchased from an insurance company. This type of insurance is purchased in addition to other liability insurance carried by the Harbour Authority. Insurance offers more protection than indemnification because the insurance company will pay the judgments and legal fees for covered situations.

Questions that a Harbour Authority may have concerning liability should be discussed with a lawyer.

2.2.2 Planning

Planning by setting goals and objectives may seem mundane when compared to pressing operational issues; however, these plans are important in helping to avoid problems or to quickly deal with them as they arise.

A Harbour Authority should engage in three types of planning:

1. Purpose planning

Purpose planning defines what the organization is trying to accomplish. Such planning may help to define the role of its clients, the harbour in the community, and so on. It is important that the Board reach a consensus on the purpose of the organization.

2. Short-term operational planning

Short-term operational planning involves creating a one-year operational plan that is in line with the long-term plan and with the purpose of the Harbour Authority. It presents the next steps to be taken in accomplishing long-term objectives. Short-term operational planning comprises:

• an account of short-term goals and objectives;
• an assertion of the activities to be conducted in the coming year; and
• an annual budget that translates the activities into financial terms.

3. Long-term strategic planning

Long-term strategic planning involves creating a three- to five-year plan to achieve the objectives of the organization. It serves to articulate specific goals and objectives in a concrete manner. This type of planning is based on the following information:

• what the Harbour Authority is trying to achieve;
• who the clients/users are;
• what the strengths and weaknesses of the Authority are;
• what unique qualities (opportunities) are available; and
• why the Authority is trying to achieve certain goals, and
• when and how it will achieve them.

The business plan, discussed in Section 3.1.3 of the Finance section of this manual, is an excellent tool for long-term strategic planning.

2.2.3 Officers of the corporation

Officers of the corporation include:

• the president;
• the vice-president;
• the secretary; and
• the treasurer (or a combined secretary/treasurer).

The officers work together as a leadership team and facilitate the democratic function of the Board of Directors. Their duties are usually defined in the by-laws of the corporation. Officers need not be directors or members of the Harbour Authority, but usually are. It is generally preferable to keep the number of officers to a minimum.

President

The president is elected at an annual meeting of the Board of Directors and provides direction to employees of the Harbour Authority. Some functions performed by the president include:

• acting as a spokesperson for the Harbour Authority;
• guiding the Board of Directors;
• ensuring that the Board adheres to its by-laws and Letters Patent;
• preparing the Board agenda with input from Board members and employee(s);
• chairing Board of Directors meetings, executive committe meetings, and special and annual meetings;
• keeping the board focussed on issues relevant to the Harbour Authority;
• acting as one of the signing officers for cheques and other documents, such as contracts and applications for funding; and
• preparing the annual report for the Annual General Meeting.

Vice-president

The vice-president is appointed by the Board of Directors and assists the president. In the absence of the president, the vice-president performs the duties and exercises the powers of the president, such as presiding over Board of Directors meetings. The vice-president usually heads a standing removed committee, such as the Personnel or Environment committee.

Some functions performed by the vice-president include:

• acting in the absence of the president;
• serving on the Executive Committee;
• learning the duties of the president and remaining informed of key issues; and
• acting as a signing officer for cheques or other documents.

Secretary

The secretary is appointed by the Board of Directors and takes minutes, tracks decisions made by the Board and Executive Committee, and maintains a register of all Harbour Authority members. The secretary may also be responsible for the Harbour Authority's correspondence.

Some functions performed by the secretary include:

• serving on the Executive Committee;
• maintaining a copy of the Harbour Authority's by-laws and the Board's policy statements;
• maintaining lists of officers, Board members, committees, and the general membership;
• filing the annual return, amendments to by-laws, and other incorporating documents with the appropriate registrar's office;
• acting as custodian of the corporate seal;
• conducting a number of tasks with respect to meetings:
• notifying Board members of meetings,
  • keeping a record of Board attendance,
  • ensuring that a quorum exists at Board meetings,
  • bringing the official minute book to meetings,
  • keeping accurate minutes of the meetings,
  • recording all motions and decisions of meetings,
  • signing Board minutes to attest to their accuracy,
  • maintaining copies of minutes and distributing them to Board members, and
  • ensuring that members are notified of general meetings.

Treasurer

The treasurer is also appointed by the Board of Directors and holds ultimate responsibility for maintaining the books and recording the day-to-day financial transactions of the Harbour Authority. The treasurer is responsible for reporting the financial matters of the Harbour Authority to the Board of Directors. He or she should report monthly to the Board and annually to the general membership. The treasurer maintains the records personally or appoints a bookkeeper to do so. The treasurer oversees the work of the bookkeeper, and prepares financial statements required by the Harbour Authority. Some Boards combine the roles of secretary and treasurer into one position.

Some functions performed by the treasurer include:

• serving on the Executive Committee;
• regularly reporting the financial state of the Harbour Authority to the Board;
• maintaining files of financial reports;
• chairing the Finance Committee;
• acting as a signing officer, with another officer or with the senior staff member, for cheques and other documents;
• ensuring that all necessary financial reports, tax reports, and audits are filed; and
• preparing and monitoring the overall budget with the Finance Committee (if applicable).

2.2.4 Committees

Committees carry out specific tasks. They are composed of individuals chosen by the Board of Directors. Committees must regularly report to the Board and are usually chaired by a Board member. Committees may be beneficial to the operation of a Harbour Authority. They can:

• provide a small, problem-solving group to study an issue in depth and to make recommendations to the Board; and
• either assist employees in carrying out tasks that the employees cannot complete alone or perform tasks in the place of an employee (e.g., lead a construction or major renovation work project, negotiate with the municipality, introduce a new service).

Executive Committee

The corporation's by-laws stipulate whether an Executive Committee will exist. The committee is composed of a specified number of directors who exercise such powers as are authorized by the Board of Directors. Usually, officers of the corporation sit on the Executive Committee. The by-laws specify how members of the committee are appointed to, and removed from, the Executive Committee. Harbour Authorities with a large number of directors are more likely to have an Executive Committee than a smaller Board.

Standing committees

Standing committees are permanent sub-committees of the Board of Directors that handle specific, strategic issues, such as environmental protection, or that provide operational support in areas such as finance or personnel. Some standing committees include Finance, Operations, Property, Environment, and Personnel.

The general role of a standing committee is to draft policies, to study issues, and to provide recommendations to the Board on possible courses of action. Standing committees are an effective means of delegating and carrying out the work of a Harbour Authority. The committee determines how often it plans to meet, and should prepare an agenda and keep minutes for each meeting.

Standing committees should be established only if a clear need for them exists. Standing committees are staffed with Board members.

Ad hoc committees

Ad hoc committees are flexible, convenient committees created by the Board of Directors to handle a specific issue, such as a major maintenance project or special event, in a short period of time. In ad hoc committees, work is clearly defined and a completion date is targeted.

An ad hoc committee may be staffed with well-qualified individuals who are not members of the Board. Only the committee chair need be a Board member. Ad hoc committees facilitate the participation and support of Harbour Authority members who wish to limit their involvement to a specific project or area of expertise.

2.2.5 Harbour Authority membership

Harbour Authority members are those people who have applied for membership and have received the approval of the Board of Directors. Members support the Harbour Authority in operating, maintaining, and managing a public commercial fishing harbour. The conditions of membership are outlined in the corporate by-laws. Members are prohibited from receiving any pecuniary gain from their membership in the corporation. The by-laws also confirm whether membership fees or dues are payable.

Members must meet at least once a year to conduct business such as:

• hearing the Board of Directors' report on how the corporation has been managed over the last year;
• learning how the Board will be managed over the next year;
• reviewing the audited financial statements;
• appointing an auditor for the coming year (if applicable); and
• electing new Board members (if applicable).

Harbour Authority members are not limited to participation at the Annual Meeting. Members may also be invited to vote on a particular issue at a special general meeting, to elect new directors, or vote for the removal of a director from office. The membership has the duty and the responsibility to protect its interests and to use its voting power wisely.

Members can withdraw from the Harbour Authority by providing a written statement. A copy of this statement must be provided to the corporation's secretary.

The members' register

Under the Canada Corporations Act, an up-to-date register of members of the Harbour Authority must be maintained. The register should include past and current members' names, home addresses and telephone numbers. The register should also include the date a member left the Harbour Authority. The register should be kept at the official address of the Harbour Authority.

Maintaining a register may prevent disputes about who can vote and formally approve decisions made by the current Board of Directors. Formally recognizing the membership encourages greater participation.

2.2.6 Harbour Supervisor

The harbour supervisor is responsible for the day-to-day operation of the harbour. The incumbent is accountable to the Board of Directors for fulfilling the tasks listed in the supervisor's job description. The supervisor reports directly to the Board and works with the Board to reach the goals of the Harbour Authority.

The supervisor takes direction from the Board of Directors collectively, not from individual Board members. This distinction is important and should be clearly explained to all Board members to avoid having individual directors unwittingly interfere with the work of the harbour supervisor.

The harbour supervisor is a valuable source of information for the Board: he or she can report about how well policies are working, identify areas for improvement, and suggest new ideas. He or she can also bring important issues, which may otherwise go unnoticed, to the attention of the Board.

The decision about whether to hire a harbour supervisor is important in terms of the financial resources that will be allocated for that purpose, the collection of fees, and the delivery of services to harbour users. At harbours operated by small Harbour Authorities, members may perform the tasks normally performed by a supervisor at a larger harbour.

The work to be performed by the harbour supervisor should be clearly defined before the position is staffed. Clearly defined responsibilities will help to prevent misunderstandings and oversights and will ensure cooperation between the supervisor and the Board. In determining the work to be performed by the harbour supervisor, it may be useful to determine whether some tasks (garbage, accounting) can be contracted out, freeing the supervisor to perform tasks judged to be more important by the Board to ensure safe, secure, and quality services to commercial fishers. Activities that may be assigned to a harbour supervisor include:

• operating, managing, and supervising all facilities in the harbour administered by the Harbour Authority;
• controlling and supervising all land (including land covered by water) that is administered by the Harbour Authority;
• explaining policies, regulations, and rate structures to users of the facilities and property administered by the Harbour Authority;
• collecting and accounting for berthage, wharfage, and utility fees, and other charges as directed by the Harbour Authority;
• allocating berthing and storage space for goods (if provided), and monitoring its use in accordance with the Board's instructions or policies;
• supervising parking space (if provided);
• maintaining contact with local authorities (e.g., police, fire, ambulance);
• ensuring that licensees, lessees, and agreement holders observe the terms and conditions agreed to;
• ensuring that users dispose of trash and used oil in the containers provided, and that facilities are kept clear of personal property, spare gear, and so on;
• supervising the garbage contractor and other local contractors that may be employed;
• ensuring that load limits are not exceeded on government roads and structures;
• reporting all structural defects on leased facilities to the Board, and making or arranging minor repairs;
• reporting all accidents, damage, and fires to the designated authorities;
• posting all signs and notices; and
• performing other duties that may be assigned either verbally or in writing by the Board of Directors of the Harbour Authority.

The above-mentioned activities form a useful checklist when writing the job description for a harbour supervisor.

2.2.7 Department of Fisheries and Oceans (DFO)

DFO has no representation within the Harbour Authority membership or on the Board of a Harbour Authority, and should not attend Board meetings except at the request of the Harbour Authority to discuss a special or specific issue. The Harbour Authority is best qualified to identify its needs and to assist DFO in defining local priorities.

DFO's involvement with Harbour Authorities extends only to its responsibilities as a landlord to ensure that:

• facilities that have been paid for by taxpayers and leased at a nominal cost are used for the public good;
• facilities provided for fishers respect the safety and health of users and of the environment; and
• no action is taken that exposes DFO to future costs or to expenditures that are not in support of the harbour.

In this context, DFO supports the development of autonomous, self-sufficient Harbour Authorities and the continued provision of harbour services to commercial fishers.

Reference Material

Paul, Kevin. Chairing a Meeting with Confidence. Third edition. Self Counsel Publications, 1995.

Stanford, Geoffrey. Bourinot's Rules of Order. Fifth edition. 1995.

Appendix 2-C Conducting Board Meetings

The following process is used when discussing and deciding on items at Board meetings:

1. The chair calls an item (items are called in the order that they appear on the agenda).
2. Board members discuss the item.
3. Once the chair is satisfied that the item has been fully discussed, he or she asks for a motion.
4. A Board member presents the motion by summarizing the proposal or the general will of the people by stating "I move that...."
5. The chair requests that someone support or "second" the motion. To second a motion, a Board member must say "I second the motion." Seconding does not imply acceptance of the motion, but simply a willingness to hear the motion discussed. If no seconder comes forward, the chair will ask for another motion. Should no agreement be reached on a plan of action, the discussion may be postponed until further information is available.
6. A seconded motion is discussed by the Board members. During the discussion, the group or a member may propose to amend the motion. An amendment changes some aspect of the motion without altering its basic intent. If the amendment is not seconded, the discussion on the original motion continues.
7. An amendment can also be amended through a sub-amendment (which must be presented as a motion and seconded before it can be discussed). A sub-amendment modifies some aspect of the amendment, but does not change the basic intent of the amendment.
8. If seconded, the sub-amendment is discussed by the Board members. When the chair is satisfied that the sub-amendment has been fully discussed, the chair asks the question "Shall the sub-amendment carry?" and a vote is taken on the sub-amendment. If the vote favours the sub-amendment, the Board members may continue to discuss the amendment until the chair calls a vote by asking "Shall the amendment, as amended, carry?" If the vote favours the amendment, the chair may call a vote on the motion by asking "Shall the motion, as amended, carry?" The motions are voted on in reverse order of presentation.
9. The chair will call a vote when satisfied that all relevant points (pros and cons) have been made on the proposed motion. The vote can be made by a show of hands or by a voice vote.
10. The chair brings forward the next item of business.

When the vote favours the motion, the motion is carried; when the vote opposes the motion, the motion is defeated. The chair refrains from voting; he or she votes only in the event of a tie.

The secretary records motions and voting results in the minutes of the meeting as accurately as possible. The minutes are the official record of the discussions and decisions of the meeting. (See Section 2.4.5 for more information about minutes of meetings.)

Appendix 2-D Glossary of Terms Used in Board Meetings

Abstain:
Refrain from voting. Some organizations have rules governing the conditions under which a member may abstain from voting (e.g., conflict of interest).

Accept:
To accept a report is the same as adopting and approving the report as presented, including any and all of its recommendations. A motion to accept a report must be seconded, and may be debated, amended, carried, or defeated.

Adjourn:
End the meeting. A motion to adjourn takes precedence over all other motions. The motion to adjourn can not be debated or amended, and must be voted on immediately.

Agenda:
The list of items proposed to be discussed at a meeting.

Amendment:
A proposed revision of the main motion. Motions may be amended by adding, deleting, or changing words in the main motion.
Example:

Member: "Mr./Madam Chairman, I move that the motion be amended by deleting the words 'before February'."

Amendments may not change the primary intent of the main motion.

Motions to amend are discussed and voted on before returning to the main motion, as originally presented (if the motion to amend was defeated), or as amended (if the motion to amend was carried).

Appeal:
A member who disagrees with a ruling of the chair may appeal by stating, "Mr./Madam Chairman, I appeal from the ruling of the chair." This statement requests that the chair ask for the opinion of the meeting on the ruling.

The motion to appeal must be seconded. The motion is not debatable, but it is customary for the chair and the appellant to explain their reasoning before voting begins.

Carried:
A majority of the individuals voting favour the motion, and the motion is accepted by the organization.

Debate:
Discussion that takes place on a motion before the motion is voted on.

Defeated:
A majority of the individuals voting oppose the motion.

Majority:
The number of people who must favour a motion before it can be carried.

A "simple majority" is more than half the members voting: that is, 50 percent plus one person.

Motion:
A proposal put forward for debate. A motion is made using the expression "I move that..." or "I move to..."

Notice of motion:
Advance notification that a motion will be presented at a certain date in the future.

Point of order:
A motion that may be raised without the speaker being recognized by the chair and that raises a question about whether a motion or debating point are within the by-laws or rules of order of the organization. A point of order does not require a seconder and is not debatable. The chair must rule on the validity of the point of order.


Example:

Member: "Mr./Madam Chairman, I rise to a point of order."

Chair: "Please state your point of order."

Member: "The proposed motion is out of order because it is contrary to by-law number 21."

Chair: "Your point of order is correct. I declare the motion out of order."


Precedence:
The order in which motions are dealt with.

Privilege:
A motion of privilege takes precedence over all other motions except adjournment and recess. It does not require a seconder and is not put to a vote. Questions of privilege are related to:

• the health and safety of members of the organization;
• the integrity of a member, the meeting, or the organization, and the respect due to them; and
• the safety and protection of property.

The chair must rule immediately on questions of privilege.
Example:

Member: "Mr./Madam Chairman, I rise to a point of privilege."

Chairman: "Please state your question of privilege."

Member: "Mr./Madam Chairman, I ask that guests be asked to leave the room until discussion of this confidential matter has been completed."

Chairman: "Your question of privilege has been granted. All guests shall leave the room until confidential business is completed."

Question:
When a motion has been made and seconded, and the chair has repeated the motion to those present, it becomes the "question". Following debate, the chair states the question again and puts it to a vote. At this point, if the question is carried, it becomes a resolution.

Quorum:
A quorum is the minimum number of people, as specified in the corporate by-laws, required at each Board meeting for business to be legally carried out. In the absence of a quorum, debate can continue but no votes can be taken, except the vote to adjourn. To ensure a quorum at every meeting, it may be helpful to develop a compulsory attendance policy.

Ratify:
To give approval; to confirm an action; to make valid and legal. Usually, the final action taken by a meeting to legalize some business performed by its officers or representatives.

Table:
Delay discussion of a motion. A motion may be tabled for a fixed period of time or indefinitely.

Withdraw:
A motion on the floor may be withdrawn by the mover, with the permission of the seconder. If a motion is withdrawn, it is not dealt with further.

Appendix 2-E Sample Meeting Agenda

SUNSET BAY HARBOUR AUTHORITY

Board of Directors Meeting

(**Insert date, time (from and to), location, and name of municipality**)

AGENDA

time, speaker, discussion/decision

Call to order

Request for additional agenda items

Routine business:

1. Approval of the agenda.
2. Approval of the minutes of the previous meeting.
3. Correspondence received.
4. Information reports from directors and committees.
5. Financial update/report.

Business arising from the previous meeting or unfinished business:

1.Item under discussion and not resolved at the end
of the last meeting

2. Any matter that must be dealt with as a result of
what occurred at the last meeting.

New business:

1. Most important or urgent item.
2. Second most important item.
3. Third most important item.
4. Other business.

Date of next meeting

Adjournment (End of meeting)

2.3  Human Resources

After determining the kind of work that must be done, the Board of Directors of the Harbour Authority decides whether the work can be performed by volunteers or independent contractors, or whether paid staff should be hired. The decision depends on factors such as the size of the harbour, the number of vessels using the harbour, the length of the season, services offered, and the availability of potential staff.

This section discusses activities related to hiring staff (a harbour supervisor), including:

2.3.1	Recruitment
2.3.2	Terms and conditions of employment
2.3.3	Pay and benefits
Also:	Reference Material #3
	Appendix 2-F - Provincial Labour Ministries

2.3.1 Recruitment

Should the Board decide that the Harbour Authority can hire a paid employee, its first task is to develop personnel guidelines. The guidelines can be drafted by the Board, the Personnel Committee, or by another committee assembled for this purpose.

In drafting the guidelines, the committee should:

1. Prepare a job description that specifies the employee's duties or work-related responsibilities and qualifications (experience, knowledge, abilities, skills, personal suitability, education). The job description should also state to whom the employee reports (i.e. the Board of Directors).
2. Draft a sample contract.
3. Develop statements that address:
4. • the recruiting process (attracting qualified candidates by word-of-mouth or advertising);
   • the selection process (identifying the best-qualified applicants by screening and interviewing applicants, and checking references);
   • pay and benefits; (See Section 2.3.3, Pay and benefits for more information.)
   • hours of work (part-time, full-time, seasonal);
   • performance review (evaluating how well the employee has performed);
   • overtime;
   • holidays;
   • vacation;
   • absences (sick and other);
   • termination; and
   • other aspects of employment.

Provincial laws regulating employment standards must be considered when drafting a personnel policy. For more information regarding provincial laws regulating employment standards, contact the appropriate provincial labour ministry (Appendix 2-F). Provincial legislation regulates the following aspects of employment:

• Minimum wage
• Payment of wages
• Hours of work
• Statutory holidays
• Termination of employment

2.3.2 Terms and conditions of employment

The Board of Directors approves the terms and conditions of employment. Terms of employment refers to the details specified in the employment contract. Conditions of employment deals with the nature of the work and its impact on the employee.

Terms of employment

The terms of employment specify an employee's position, period of employment, performance review, and type and amount of payment. Factors to consider when establishing the terms of employment include:

• the circumstances and conditions under which the employee works;
• the nature of the work;
• how and when the employee is paid;
• on what basis and to what degree the employee is responsible for losses, expenses, or damages he or she
• may cause; and
• the degree of control that the Harbour Authority exercises over the employee.

Conditions of employment

A Harbour Authority is responsible for providing a safe and healthy work environment for its workers. Health and safety issues are closely related to the nature of the work and the tasks and responsibilities that are assigned to the employee. All provinces have legislation dealing with occupational health and safety.

Questions that may help to identify potential health or safety hazards include:

• Are hazardous materials present?
• Is the work site isolated?
• Is the work physically demanding?

It is important that the Harbour Authority address health and safety issues by taking measures to eliminate hazardous situations and outlining contingency measures. The conditions of employment must specify any matter that could impact the health and safety of an employee.
 

2.3.3 Pay and benefits

Pay

Pay or compensation is any form of payment given to an employee in exchange for work performed for the employer. An employee who is paid according to an hourly rate earns a wage; an employee who is paid weekly, semi-monthly, or monthly earns a salary. A retainer is a negotiated flat fee paid to an individual on a regular basis, in advance, to cover an amount of work specified in the contract. No clear-cut rules exist as to who should work for a wage, a salary, or a retainer.

Providing fair compensation can be something of a balancing act for an organization. On one hand, it attracts qualified applicants, retains them, and can motivate employees to do an outstanding job; it reflects well on the organization. On the other hand, compensation represents a significant cost to the employer. Harbour Authorities, like other organizations, are under pressure to keep such costs down.

Benefits

Benefits are compensation to employees in forms other than direct pay. Although benefits do not involve paying the employee, they represent a cost to the employer and to the employee. The cost of benefits can represent as much as one third of total compensation. Four categories of benefits are:

Universal benefits are benefits such as Old Age Security (OAS), the Guaranteed Income Supplement (GIS), and provincial supplements to these programs, that governments provide without requiring direct contributions from either the employer or the employee. Health insurance is also a universal benefit in several provinces. In other provinces, employers or employees, or both, must pay the premiums.

Mandatory benefits are benefits that an employer is required to provide by law. Health insurance (in some provinces) and workers' compensation are examples of regulated provincially mandatory benefits. The Canada and Quebec pension plans and the Employment Insurance scheme are federally regulated benefits funded by both the employee and the employer. As an employer, the Harbour Authority is required to make these deductions from the pay of its employees. (See Section 3.4, Government Reporting Requirements of the Finance section of this manual.)

Discretionary benefits are benefits such as private pension plans, group life and disability insurance, and supplementary health insurance. Larger organizations typically offer these types of benefits to its employees on a cost-shared basis.

Pay for time not worked includes benefits such as paid vacation, paid statutory holidays, and paid sick leave. Under employment standards law, Harbour Authorities are required to pay its employees for a certain number of statutory holidays and vacation days. Other paid time off, such as sick leave or holidays beyond the legal minimum, is given at the employer's discretion.

Workers' compensation

Harbour Authorities that employ personnel should be familiar with the occupational health and safety legislation in their province. The legislation sets out the rights and duties of all parties in the workplace, together with procedures for dealing with workplace hazards.

The Workers' Compensation Board (WCB) (Commission de la santé et sécurité au travail (CSST) in Quebec) pools contributions from employers and provides benefits to workers who are injured on the job or who contract an occupational disease. Each province has its own workers' compensation legislation and board.

Workers' compensation covers most full- or part-time employees as well as contractors. The local or regional office of the WCB can provide information on occupational and safety legislation and can confirm which Harbour Authority employees are protected under provincial legislation.

WCB clearance certificate

When a Harbour Authority awards work to contractors or subcontractors, the WCB could hold the Harbour Authority financially responsible for any of the contractor's unpaid assessments. A good practice is to require a clearance certificate from contractors before awarding a contract. The clearance certificate confirms that the contractor is covered under the WCB and has met the payment requirements. Time limitations apply regarding the validity of a clearance certificate.

Reference Material

Stone, Thomas H., and Noah H. Meltz. Human Resource Management in Canada. Toronto: Holt, Rinehart and Winston of Canada, Limited, 1993.

Appendix 2-F Provincial Labour Ministries

British Columbia:
Ministry of Labour
Victoria, British Columbia
(205) 356-6348

Alberta:
Department of Labour
Edmonton, Alberta
(403) 427-3664

Saskatchewan:
Department of Labour
Regina, Saskatchewan
(306) 787-3662

Manitoba:
Department of Labour
Winnipeg, Manitoba
(204) 945-4079

Ontario:
Ministry of Labour
Toronto, Ontario
(416) 326-7565

Quebec:
Commission des normes du travail/
Work Standards Commission
Quebec City, Quebec
(418) 644-0817

New Brunswick:
Department of Advanced Education and Learning
Fredericton, New Brunswick
(506) 453-2597

Prince Edward Island:
Department of Community Affairs and Attorney General
Labour and Industrial Relations Division
Charlottetown, Prince Edward Island
(902) 368-4550

Nova Scotia:
Department of Labour
Halifax, Nova Scotia
(902) 424-4125

Newfoundland:
Department of Environment and Labour Relations
St. John's, Newfoundland
(709) 729-2711

2.3  Human Resources

Good records management involves making important pieces of information easy to retrieve, as well as protecting them from loss or destruction. It increases the efficiency and the effectiveness of the organization. In this section, the following records management topics are discussed:

2.4.1	Legal requirements
2.4.2	Types of files
2.4.3	Types of Records
2.4.4	Types of Reports
2.4.5	Taking Minutes
Also:	Reference Material #4
	Appendix 2-G - Sample Annual Report
	Appendix 2-H - Minutes

2.4.1 Legal requirements

Under the Canada Corporations Act, a corporation must keep the following records in the custody of the secretary or another officer of the corporation charged with that duty:

• a copy of the Letters Patent, Supplementary Letters Patent (if any), and all by-laws of the organization;
• an alphabetical list of the names of all current or previous members of the Harbour Authority;
• the address of each member at the time of membership; and
• the names, addresses, and occupations of all current or previous directors, and the dates upon which each became and ceased to be a director.

Harbour Authorities are also required to maintain adequate accounting records of their activities, together with financial statements from the current and previous years. The Board's secretary must keep a record of the minutes of meetings.

2.4.2 Files

An effective filing system not only allows for speedy retrieval of information, but also reduces the possibility of misplacing client information, records of financial transactions, and other important documents.

Organizing the filing system

Because Harbour Authorities handle large volumes of paperwork, a good management practice is to keep only the paperwork that is important and relevant and discard the rest. After identifying documents that should be kept, you may wish to adopt the following approach to organize the filing system:

• Personnel files contain employee information such as training, appraisals, health and safety, workers' compensation, job descriptions, and correspondence.
• Administrative files hold fee and rate schedules, and inventory listings.
• Projects files include all pertinent details of a given project (plan, estimates, progress reports, invoices, etc.).
• Governance files hold minutes of meetings, resolutions of the Board of Directors, and related correspondence.
• Legal files contain incorporation documents, by-laws, leases, subleases, licences, permits, official surveys, and small claims court and litigation documents.
• Financial files contain billing, collection and accounts payable documents, customer and supplier information, annual work plan and interim statements, annual financial statements, bank statements, copies of banking resolutions and signing authorities, and tax returns.
• Customer files contain files or ledger cards, completed by the harbour supervisor, for each vessel owner/operator or other firm or person who purchases the services of the Harbour Authority. Customer files should be filed alphabetically by customer or vessel name.
  Customer files would normally contain copies of:
  • berthage agreements,
  • descriptions of vessels (if applicable), and
  • contact names and other pertinent information.
• Supplier files contain files or ledger cards for each firm or person who sells goods or services to the Harbour Authority. These files should be kept in alphabetical order for ease of reference. Once an invoice is paid, the receipt, if provided, should be filed together with other information pertaining to the supplier. This information serves as a useful reminder in future dealings with the supplier.

Cheque stubs should be completed in full with the date, name of the payee, and the amount of payment. The same information should be entered directly into the journals (see Maintaining the books under Section 2.4.3).Once the bank reconciliation has been completed, the cancelled cheques and accompanying bank statement for each month should be filed in sequence and kept in storage.
 

2.4.3 Records

Record keeping

Harbour Authorities are required by law to keep books and records, including supporting documents such as sales and purchase invoices, contracts, bank statements, and cancelled cheques, in an orderly manner at a designated records office. This information may eventually be useful to government bodies such as the Workers' Compensation Board, Revenue Canada, and the Department of Fisheries and Oceans (DFO) for audit purposes.

Some corporate records, such as financial statements, journals and ledgers, and personnel records must be kept permanently. Revenue Canada requires that taxation records be kept for at least six years from the end of the last taxation year to which the records relate.

Financial records

Financial records provide a written account of the Harbour Authority's financial transactions and financial matters.

Bookkeeping records

Bookkeeping is the basis on which financial records are built. Bookkeeping fills two important needs:

• It provides sufficient information to satisfy government reporting requirements.
• It supplies, in a simplified and direct manner, the financial information required to successfully manage the corporation.

Bookkeeping also justifies expenses, safeguards assets, and meets the management information and planning needs of the Harbour Authority. It involves accurately recording and accounting for day-to-day transactions, such as bill payments, receipt of revenue, bank deposits, cash accounting, and entries to journal accounts and general ledger accounts. Bookkeeping can be conducted daily, weekly, or monthly, depending on the number of transactions involved in the management of the Harbour Authority.

Financial statements are completed by the treasurer or by an accountant hired for that purpose. Financial statements are then reviewed and approved by the Board of Directors.

Maintaining the books

A typical method of maintaining financial records is called double-entry accounting. Double-entry accounting means that every transaction is recorded in one account as a debit and in another as a credit so that the total number of debits equals the total number of credits. The four main categories of accounts under which all financial transactions are captured and posted to the general ledger are:

• The revenue account shows funds flowing into the Harbour Authority: for example, membership dues, berthage fees, wharfage fees, DFO funding (if applicable), and other revenue.
• The expense account shows the costs of operating the Harbour Authority: for example, maintenance expenses, operating expenses, repairs, salaries, and so on.
• The asset account shows all items concerned with the ownership of money, buildings, and equipment.
• The liability account shows what the Harbour Authority owes to other parties, such as accounts payable and bank loans.

To maintain these four types of accounts, three sets of records or journals are used:

1. a sales/receipts journal records all money received;
2. a cash disbursements journal records all payments; and
3. payroll journal records employee-related financial data.

Financial headings

Each financial transaction is recorded in a transaction category. Transaction categories include:

• salary,
• utilities,
• maintenance,
• berthage fees,
• parking fees,
• licences,
• garbage,
• used oil,
• insurance, and so on.

It is important, at the outset of operations, to identify categories that are in line with items on the annual work plan and with taxation or Small Craft Harbours (SCH), DFO reporting requirements. It is also important to provide the Board of Directors with meaningful information to evaluate the financial performance of the Harbour Authority.

2.4.4 Reports

The Annual Summary

As mentioned in Reporting requirements to the members under Section 2.1.3, Harbour Authorities must comply with certain filing and reporting requirements to maintain their status as a corporation. Under the Canada Corporations Act, a federally incorporated Harbour Authority is required to submit an Annual Summary to the Corporations Directorate of Industry Canada. The Annual Summary confirms:

• the name and mailing address of the Harbour Authority;
• the incorporation date by Letters Patent;
• the names and addresses of the directors of the corporation;
• the date of the last annual meeting;
• the name and address of the auditor of the corporation; and
• the signature, title, and telephone number of an officer or director.

The Annual Summary is mailed on the corporation's anniversary date and must be returned within 60 days of that date with the appropriate fee. For this reason, it is important that the Corporations Directorate be notified of any change of address. Failure to file the Annual Summary in any given year is an offence subject to a fine. Failure to file for two consecutive years can result in the corporation's dissolution.

The annual report

The Board of Directors must hold at least one meeting of the membership per year in accordance with the terms of the Harbour Authority's by-laws. An annual report must be presented to the membership for approval at this meeting. The report must include:

• the names of the executive, the Board of Directors, and the staff;
• the balance sheet and statement of income and expenses; and
• the auditor's report.

A more informative annual report

An annual report can be expanded and made more informative by adding a message from the president or the Board of Directors describing the goals that were achieved in the past year, difficulties encountered, new policies implemented, and future directions. The report may include a report from the treasurer on the Harbour Authority's financial situation, as well as information on the major financial decisions made by the Board during the year, for example:

• a summary of DFO contributions, by project (if applicable);
• a breakdown of the various construction and maintenance projects completed during the year;
• a breakdown of the revenue generated by client type and by activity;
• the surplus accumulated and the cash position; and
• a report on insurance claims and premiums.

The auditor's report

The auditor's report is a summary of the Harbour Authority's financial standing. It is prepared annually by an auditor and presented to the membership at the annual meeting. The auditor for the coming year is appointed at the annual meeting by passing a motion that specifies the name of the auditor and recording the approved motion in the minutes of the annual meeting.

An auditor is an outside party hired to provide an unbiased report of the financial situation of the organization. The auditor does not have to be a professional accountant; however, he or she should have good accounting knowledge.

Should a Harbour Authority determine that an independent audit is necessary, provisions should be made in the budget for this activity. If the Harbour Authority determines that an independent audit is unnecessary, someone from the general membership with the appropriate knowledge should be appointed to review the accounts and financial statements on a regular basis. The auditor should not be a director, officer, or employee of the Harbour Authority unless all members have consented to the appointment. A direct affiliation with the organization could compromise the auditor's objectivity.

To complete the audit, the auditor examines the balance sheet and other financial statements of the Harbour Authority and renders an opinion as to whether the financial statements represent a fair picture of the financial position of the Harbour Authority.

The auditor's report may contain, in addition to the findings, various comments to ensure that readers of the financial statements can form an accurate picture of the financial position of the Harbour Authority. The auditor may also offer advice to the Harbour Authority on how to improve its bookkeeping and accounting processes.

Report to DFO

The Harbour Authority lease document states that a Harbour Authority must provide the Regional Director of Small Craft Harbours (Department of Fisheries and Oceans) with a statement of costs and expenses, and revenues and assets for the 12-month period preceding the end of its fiscal year. The statement must be in a form satisfactory to the Regional Director and must be certified by an officer of the Harbour Authority. Appendix 2-G illustrates a sample annual report to DFO.

Each regional office supplies the Harbour Authorities in their region with the necessary annual report form to complete. It is important that a Harbour Authority's accounting records and books match the income and expense categories listed in the report.

2.4.5 Minutes

Minutes are a brief written record of the discussions and decisions of a meeting. The minutes summarize, in a factual manner, discussions, motions, and amendments put forward. They also indicate who put forward and seconded the motions and amendments, and the results of the voting. The minutes are considered official documents once they have been approved, at a subsequent meeting, by the members who attended the previous meeting. The minutes are confidential and should not be distributed without the consent of the Board of Directors.

Minutes provide the members of the Harbour Authority with:

• a clear, objective summary of the activities of the Harbour Authority;
• a means of relaying information to people who were unable to attend the meeting;
• a reminder of future expected action; and
• a historical background for decisions made at meetings and the rationale behind them.

The minutes serve as both a record and a reminder: minutes of committee meetings help the chair to prepare a report to the Board; minutes of Board meetings assist the president in preparing the annual report. Because minutes indicate who is responsible for actioning the items discussed, minutes should be distributed to Board members before the next meeting.

Recording minutes

The minutes are not a detailed record of all that was said at a meeting; only motions must be recorded word for word. Each Harbour Authority should determine the level of detail that is appropriate for their organization. Appendix 2-H provides examples of the information that should be recorded in the minutes.

The secretary is generally responsible for taking minutes at executive and Board meetings. Minutes should be legible, and typewritten where possible.

Minute book

Minutes should be kept in a file, a minute book, or a three-ring binder with separate sections for special, general, and annual meetings, meetings of the Board of Directors, and other important meetings. For quick reference, the minute book should also contain the certificate of incorporation, and a copy of the Letters Patent and by-laws. It may also be helpful to include a copy of the resolution passed by the Board of Directors to choose a financial institution and to establish cheque-signing powers.

Storing minutes

Minute books for past years should be clearly identified and stored at the Harbour Authority's official place of business.

Reference Material

Cornish, Cliff G. Basic Accounting for the Small Business. Self Counsel Press.

Granger, Alex, and Margaret Variable. Financial Management of Community Groups. Vancouver Volunteer Centre.

Risen, Peter J. Accounting, The Easy Way. Baron's Educational Series, Inc.

Watts, Jane. The Minutes Taker's Handbook. First Edition. Vancouver: Self Counsel Press, 1992.

Appendix 2-G - Sample Annual Report

A Harbour Authority Annual Report contains eleven items, as shown in the sample cover page below. This appendix provides examples of each item in the following pages.

Item # 1

Harbour Authority of Sunset Bay


ANNUAL REPORT
APRIL 1, (**year**) TO MARCH 31, (**year**)

1. Cover page
2. Board of Directors
3. Service Summary
4. Annual Audit Covering Memo
5. Balance Sheet
6. Statement of Revenue, Expenditure, and Equity
7. Bank Reconciliation
8. Accounts Receivable and Payable
9. Projected Work Plan
10. Minutes of the Annual General Meeting
11. Comments

Item # 2

Harbour Authority of Sunset Bay
ANNUAL REPORT
Board of Directors

Officers

President
Steven Smith
Sunset Bay, N.S.
(902) 555-1212

Vice-president
David Browning
Sunset Bay, N.S.
(902) 555-3232

Secretary/Treasurer
Leslie Hertz
Sunset Bay, N.S.
(902) 555-4567

Other Directors

Director
Chris Toff
Sunset Bay, N.S.
902) 555-9876

Director
Alex Monroe
Sunset Bay, N.S.
(902) 555-7654


Item # 3

Harbour Authority of Sunset Bay

ANNUAL REPORT
Service Summary

Number of Members: 20

Number of Fishers Served: 88

Number of Vessels Served: 35

Number of Fish Plants Using Harbour Facilities: 1

Vessel Metres: Ranging from **6** m to **100** m

Number of Meetings of the Board of Directors: 4

Number of General Meetings: 1


Item # 4

Harbour Authority of Sunset Bay

ANNUAL REPORT

Annual Audit - Covering Memo

Date of Engagement: March 31, (**year**)

Name of Firm/Individual: I. M. Auditor

Address: 345 Main, Nexttown, N.S.

Postal Code: B3B 2T8

Telephone: (902) 555-5832

Address of Harbour Authority: Sunset Bay, N.S.

Postal Code: B2B 1M2

To the members of the Harbour Authority of Sunset Bay:

I have examined the Balance Sheet of the Harbour Authority of Sunset Bay as of March 31, (**year**), and the statement of Revenue, Expenditure, and Equity for the year then ended. These financial statements fairly present the financial position of the Harbour Authority as of March 31, (**year**) and the results of its operations for the year then ended.

I certify that I have examined these financial statements, including tests of related transactions and procedures, and that they are true, correct, and accurate.

In compliance with the request of the Harbour Authority of Sunset Bay, I enclose herewith the related statements.

Signed,

I. M. Auditor

Attachments


Item # 5

Harbour Authority of Sunset Bay

ANNUAL REPORT
Balance Sheet

as at March 31, (**year**)


Assets

Petty Cash: Nil

Bank Account: 1,999

Accounts Receivable: 300



Capital Assets

Building: Nil

Equipment: Nil

Total Assets: $ 2,299



Liabilities and Authority Equity

Accounts Payable: 150

Other Liabilities: Nil

Total Liabilities: $150

Authority Equity: $ 2,299

Total Liabilities and Authority Equity: $ 2,449


Item # 6

Harbour Authority of Sunset Bay

ANNUAL REPORT
Statement of Revenue, Expenditure, and Equity

for the year ending March 31, (**year**)

Revenue

Berthage and wharfage: $ 6,500

Licences: 1,000

Subleases: 2,000

DFO contracts: 0

Other: 500

TOTAL REVENUE:$ 10,000

Expenditures

General expenses:

Lease: 1

Salaries and benefits: 3,000

Telephone: 300

Insurance: 0

Travel: 200

Office supplies: 100

Professional services: 150

Bank charges: 100

Municipal taxes: 300

Operating expenses:

Electricity: 800

Garbage collection: 1,000

Repairs and maintenance: 2,000

Floats: 0

Building:

Miscellaneous: 400

Others:

Equipment purchased: 300

HST: 700

TOTAL EXPENDITURES: $ 9,351

NET INCOME (LOSS): $649

EQUITY AT BEGINNING OF YEAR: $ 1,650

EQUITY AT END OF YEAR: $ 2,299


Item # 7

Harbour Authority of Sunset Bay

ANNUAL REPORT

Bank Reconciliation

April 1, (**year**) to March 31, (**year**)

Bank Book Transactions

Beginning bank book balance, April 1, (**year**) $ 1,650

Add:

Deposits $10,000

Interest 0

Deduct:

Disbursements $9,251

Bank Charges 100

Bank Book Balance, March 31, (**year**) $ 2,299

Balance per Bank Statement, March 31: $ 2,374

Add Outstanding Deposits: Nil

Deduct Outstanding Cheques:

Cheque Number Amount:

0101 $75

Total Outstanding Cheques: $ 75

Balance March 31, (**year**) (equals bank book balance above:$ 2,299


Item # 8

Harbour Authority of Sunset Bay
ANNUAL REPORT
Accounts Receivable and Payable

as at March 31,(**year**)

Accounts Receivable

Name: James Stephenson


Amount: $ 200

Name: Bryon Rollins


Amount: $ 100

Accounts Payable

Name: I. M. Auditor

Amount$ 150



Item # 9

Harbour Authority of Sunset Bay


ANNUAL REPORT
Projected Work Plan

for the Coming Year

ending March 31, (**year**)

Projected Revenue

Berthage and wharfage: $ 7,000

Licences: 1,200

Subleases: 2,500

DFO contracts: 10,000

Other: 400

Total Projected Revenue: $ 21,100

Projected Expenditures

General expenses:

Lease: 1

Salaries and benefits: 2,600

Telephone: 300

Insurance: 0

Travel: 200

Office supplies: 100

Professional services: 150

Bank Charges: 100

Municipal taxes: 300

Operating expenses:

Electricity: 800

Garbage collection: 1,000

Repairs and maintenance: 2,000

Floats: 0

Building: 0

Miscellaneous: 400


Others:

Equipment purchased: 300

HST: 700

Office expansion: 10,000

Total Projected Expenditures: $ 18,951

Total Net Income (Loss): $2,149



Item # 10

Harbour Authority of Sunset Bay


ANNUAL REPORT
Minutes of the Annual General Meeting

for the Year Ended March 31, (**year**)

(**Attach the minutes of the Annual General Meeting.**)

(**Minutes of other meetings resulting in changes to by-laws, fee structure, or policies must also be attached.**)



Item # 11

Harbour Authority of Sunset Bay

ANNUAL REPORT
Comments as at March 31, (**year**)

Comments on Policy and Procedures

(**Comments may be made in reference to:

a) the bookkeeping practices of the Harbour Authority;

b) the completion of this report; or

c) any other concern that should be brought to the attention of the Board of Directors of the Harbour Authority or the Department of Fisheries and Oceans.**)

Appendix 2-H - Taking Minutes

The following points should be included in the minutes of a meeting:

1. Heading: Name of the committee (Executive, Full Board, special, general, etc.); must include the word "Minutes", the date, time, and location of the meeting.
2. Attendance: The names of members present, names of people invited but absent; names of non-members who attended the meeting, names of chair and secretary.
3. Minutes of the previous meeting: The standard form is "The minutes of the meeting of month/day/year were approved as read." If the minutes were approved as amended, indicate the amendment and the individuals who moved and seconded the motion to amend. Also indicate whether the minutes were approved.
4. Reports received or presented by an officer of the Harbour Authority or by a committee: Information reports should be acknowledged in the minutes as "received" or "presented" (as applicable). Reports with recommendations should be "adopted", "accepted", or "considered". For example, the treasurer's report on finances is "reported". In the case of the treasurer's annual report, which has been audited according to the by-laws, a motion and vote must take place to accept the report. All reports should be attached to the minutes.
5. Correspondence: Letters are read by the secretary and then either filed or attached to the minutes in an appendix; this section may also deal with telephone conversations or other means of communication.
6. Unfinished business: Motions and issues raised at previous meetings and deferred to the current meeting, details of follow-up action and of new actions, if applicable.
7. New business: New information (motions, amendments, votes, pros and cons, expected action, etc.); tasks assigned to members and deadlines established.
8. Adjournment: The time the meeting was adjo`urned.
9. Next meeting date and time: The date, time, and location of the next meeting.
10. Signatures: The minute-taker's signature appears at the end of the minutes; the chair initials all pages and signs the last page.