By Gerry Barker
August 16, 2019
Part Six of Seven
It began in the fall of 2016 when city council formed the Strategies and Options Committee (SOC) to select the best way to dispose of Guelph Hydro and its substatial assets. That ibcludes a guaranteed customer base of some 55,000 who pay thrie account mpnthly.
This committee was asked to examine all options including merger with other utilities, sell Guelph Hydro or keep it as a profitable and effoicient city-owned corporation. Seems the latter choice is logical and straight forward.
The SOC was composed of the following: Co-chairs Derrick Thomson and jane Armstrong, Robert Bell, co-chair of GHESI and Mark Goldberg. It is assumed that at a closed-session of city cou ncil, June 9, 2017, that Ron Clark, solicitor of Aird and Berlis, was representing GMHI. In fact, he attended a number of those closed meerings according to city records. The one missing link is when Mr. Clark was appointed solicitor for GMHI.
When council approved the merger, Mr. Clark made a presentation that gave the impression that he was representing Alectra, or at the least supporting the SOC merger proposal.
So, why were the meetings of the SOC and liaison with cuty council conducted in closed-sessions?
Well, a lot did happen between the fall of 2016 and February 2017 whenthe SOC recommended to city council that the option of selling Guelph Hydro be withdrawn. In short, no longer considered. Council voted 7-5 to not sell Guelph Hydro.
We now know what happened. On December 13, 2017, council voted 10-3 to merge with Alectra Utilities. What motivated those ten elected councillors to agree to the merger? Further, Mr. Clark advised council that the agreement was not finalizeds and it would take a few months to complete.
Why did council rush to approve the agreement? Reading on that irgency will be revealed.
Let’s backtrack to why Guelph Municipal Holdings Inc., for more than four years, under the leadership of Mayor Karen Farbridge, was also chair of GMHI? Her Chief Administrative Officer, Ann Pappert, was also Chief Executive Officer of GMHI.
Under any corporate organization chart, having the two top executives controling in the same capacity, of both the City of Guelph Corporation and its corporate subsidiary, GMHI. Itwould not be tolerated. Here’s why, it’s a dangerous concentration of power in the organization..
It gave the two women carte blanche to do what ever they wanted to achieve goals without oversight or checks of balances. Thar’s not the way our municipal systems are supposed to work.
But make no mistake the Mayor was in complete control of both corporations. As it turned out it wasn’t the GMHI situation that defeated mayor Farbridge in 2014. It was the wrongful dismissal lawsuit by the general contractor of the new city hasll, Urbacon Buildings Group Inc.
That six year legal battle cost the city an additional $23 million to complete the project.
The mystery that prevails is what made the SOC recommendation to city council that the sale of Guelph Hydro be taken off the table as an option?
Was the SOC a masquerade or just following orders?
To this day there is no explanation or details of who or what influenced the SOC to recommendation removal of not selling Guelph Hydro.
It left only two alternatives, merge with another utility or continue to operate it. If that was the SOC choice it would eliminate the opportunity to help clean up the GMHI $66 million losses.
In my opinion, no bank was prepared to put up the $68.3 million considering the depth of the losses revealed in two staff reports in May and July 2016. Instead, the city loaned the money to GMHI not aware that there was no possibility of GMHI repaying the loan. This was confirmed in the GMHI consolidated audit perfotmed by the accouting firm KPMG. They described the loans as “Shareholder’s Liability.”
This placed the city administration in a bind. Because the province demands that all municipalities must ballance their books at year end, where was the city going to find $66 million before then end of 2016?
The city debt limit could not handle it. The risk managers at he banks would not touch impaired assets that was being written down. There were no GMHI profits available to service the growing debt some of which remains today and is growing.
Then, along came the strategy to sell Guelph Hydro and use thr proceeds to pay off the $66 million. In the fall, the wheels started turning when the SOC was selected to find a buyer or merge Guelph Hydro with another partner.
Merger negotiatins began in earnest in June 2017. In early October, Mayor Guthrie announce the city had signed a Memorandum of Agreement with Alectra.
So here’s the deal:
The city transfers title and assets of Guelph Hydro with a 2016 book value of $228 million to Alectra. In return, Alectra promises to establish a Green Technology centre in Guelph and the city would receive an annual dividend of 4.86 per cent of 60 per cent of Alectra utilities profits. City council appointed Jane Armstrong as Guelph’s representative on the Alectra Board of Directors.
The merger was approved by the Ontario Energy Board in 2018. The decision denied intervenor access ti the meeting despite a number of residents who requested a open meeting and the opportunity to speak.
None of us were granted that request. On January 1, 2019 the deal was completed.
There are more details of this deal that have not been revealed. Why did this merger solve the city’s GMHI problem? Did Alectra assume the $66 million losses that were financed internally by the city? Did the city recover the $2.6 million it admitted spending to sell the deal to the public?
Is it not true that Alectra promised there would no charges to the city regarding rate increases for power? Alectra recently asked the Ontario Energt Generation Board for a 5 per cent rate increase.
The city did receive $18.5 million from Guelph Hydrp’s surplus. What happened to those funds that were the property of the citizens?
Council, despite the leaking of the SOC recommending dropping the sale of Guelph Hydro, did not explain the reasons or even a summary of the SOC decision. The SOC assumed it was covered in closed-sessions protected by the Council Code of Conduct.
The Code of Conduct prevents any councilor or member of the SOC to discuss or reveal the contents of any designated closed-session meeting in which they participated.
If there is an apparent breach of the rule, the offender may be subject to dicipline as determined by the Integrity Commissioner who may suspend the offender following an investigation and fine them.
Closed-sessions are the most abused procedural rules that prevents disclosure by council or any board or committee to not discuss the content of such closed-session.
In my opinion, this suppresses information of the public’s interest that should be revealed. There are certain legitimate reasons for a closed-session including contract negotiations, real estate transactions and certain staff issues.
The fact is that in the first two years of the Guthrie administration, there were 84 closed-sessions. There was supposed to be a summary of the meeting reported after but that did not occur.
It is, in my opinion, the essence of convenient cover-up that denies public participation, accountability, transparency and open government.
This is what happens when the real shareholders of Guelph Hydro are rarely informed of the methods, reasons or, dare I say it, what happened to due diligence?
By Gerry Barker
Augurs 8, 2019 – Updated 8/7/19
Part Five of Seven Parts
Note to viewers: Part Six of this series is delayed pending some new information. Thanks for your support and interest. GB
Why did Guelph Hydro’s merging with Alectra Utilities Inc. with ignoring the questions raised by the public before council approved it December 13, 2017? Why did council approve spending $2.6 million to finance the campaign to merge with Alectra? Why didn’t the city inform the 55,000 power customers of the details of the merger with Alectra Utilities?
Just prior to council approving the Guelph Hydro merger with Alectra Utilities, I was lying in bed November 2, 2017, contemplating my day and trying to absorb the Trump Twitter follies and its effect on Canada.
I received a call from a councillor and we talked about the proposed Guelph Hydro merger with Alectra Utilities Inc. I was advised to send my question to a website “energizingtomorrow.ca and the questions would be answered.” I discovered that the website rationed questions and the number of characters. In my opinion, this was suppression of public information.
On that basis, I went to work and prepared some 50 questions that I felt the Hydro customers and residents, of which I was one, needed to know about this proposal and its consequences.
Here’s a snapshot of a portion of the website that was recommended:
The committee’s (SOC) education and community engagement efforts will continue through all phases of the process.
If Council decides to pursue merger negotiations, the community will be invited to comment on any proposed merger before Council makes its final decision.
Learn more. Ask us anything.
Well, city council had already signed a memorandum of agreement with Alectra Utilities; the corporation was ready to merge Guelph Hydro. The merger would give away Guelph Hydro without any immediate compensation for the $228.4 million city investment. Hydro’s customer’s investment in poles, wires, substations, equipment, technical staff and Hydro headquarters would be sucked into the Alectra network.
Because the public was not told the details of the memorandum of agreement already signed, it is safe to say there was no consideration for the following: asset valuation, goodwill, operating surpluses, investments or the wonderful culture of the organization. It was one described by knowledgeable experts as well run and profitable. In fact, it is one of the top performing Local Community Distribution operations in the province.
The city puts a No Sale sign on Guelph Hydro
Let’s start from the beginning when the city council in the fall of 2017, formed the Strategic Options Committee (SOC) co-chaired by CAO Derrick Thomson and Hydro Chief Administrative Officer, Pankaj Sardana, There were four non-elected individuals named, two from Hydro and two ratepayers.
The SOC was charged with disposing of Guelph Hydro.
Why, one may ask? If it ain’t broke, why fix it?
From the start all options were on the table although the SOC meetings were held in closed-sessions with only members of council being informed of discussions and developments.
In February, the SOC reinvented its purpose. First Panaj Sardana was removed as co-chair and replaced by Jane Armstrong, chair if Guelph Hydro. Two members of the committee were replaced including Richard Puccini.
Something else occurred that month and was only reported later, the option of selling Guelph Hydro was no longer considered by the SOC, despite interest from unnamed persons to make an offer.
The source of this development was one of the SOC members who were no longer on the committee.
In my opinion, this triggered speculation that the SOC had selected Alectra Utilities to merge with Guelph Hydro. But it became increasingly clear that disposing of Guelph Hydro was an antidote to clean up the Guelph Municipal holdings Inc’s losses of $66 million.
While Mayor Cam Guthrie cheer-leaded the merger message, it turned out the city spent $2.6 million on a campaign to convince the public this was a good deal. It was an attempt to change the spots on a leopard.
Approved by council that few understood the deal
In my opinion, it was a fluffy campaign with little attendance at town hall meetings. The administration’s communications strategy using the energizetommorrow.ca website as its conduit for merger information. It included city staff time to turn out a thick report justifying the merger just a few days before the council made its decision. This report was only available online with a small number of hard copies available to key individuals.
It reminds me of the tactic: Paralysis by Analysis
It’s ironic that prior to this last minute presentation less that 12 days before this December 13 2017 council meeting to hear citizen delegates. They didn’t listen to the 22 delegates who have reasoned argument to delay approval and to review and allow more public information.
By a vote of 10 to 3, council approved the merger.
Isn’t it strange that this same council killed online voting in the 2018 civic election but used online not to reveal the details of the merger?
This was a planned expensive project that turned over our electric distribution system for 4.86 per cent of 60 percent of Alectra utilities profit. It remains an exercise in deliberately disguising or covering up the truth, and the people are the real victims.
In agreeing to this deal, the Guthrie administration was had by experts from team Alectra. Further, they indirectly denigrated Guelph Hydro as failing to respond to the rapidly changing power technology,
The accounting labyrinth created by this so-called Community Energy Innovation has done irreparable financial damage that has resulted in annual property tax increases of averaging more than 3 per cent.
Remember in the 2014 civic election campaign, mayoralty candidate Guthrie promised he would keep the property tax rate to that of the Consumer Price Index (CPI) that was 1.11 per cent in 2014.
Then, last year our Mayor undermined the Progressive Conservation Guelph Riding Association in charge of selecting a candidate. Guthrie attempted to obtain an unopposed nomination to run for the PC’s. He was maintaining, at the time, that he would be running for Mayor. Good thing he had a card in his hand.
Of the 50 questions submitted to council, none answered except the Mayor, the last three remain a mystery.
“ Why is Guelph Hydro involved in Green Energy technology when a mismanaged sustainable energy project by GMHI has cost the citizens $66 million in loss of shareholder equity?
“Is Alectra agreeing to take the $93 million long-term debt of Guelph hydro?
“Who is representing the citizens’ interests negotiating the merger details?
Oh! There is one question I’d like the Mayor to answer: Who received the two TESLA home power storage systems that he said were installed in Guelph?
The citizens of Guelph were the big losers in this episode involving mismanagement of city business and resources.
And the winners are:
Mayor Guthrie re-elected in October 2018,
Former CAO Ann Pappert who walked away from her job May 16, 2016 receiving $263,000 for five months work,
Former CAO Derrick Thomson received a $57,000 performance bonus for his role in the Guelph Hydro/Alectra merger in 2018. He left the city in March 2019,
Former Hydro Chair, Jane Armstrong, was appointed by council to represent the city for five years on the Alectra Utilities Board of Directors. She is being paid $25,000 a year plus expenses.
Finally, Alectra Utilities who received a gift worth $228.4 million, the book value of Guelph Hydro.
Think about this. Even if Alectra pays a $1.500 annual dividend to the city it would take an estimated 153 years to even repay the $228.4 million 2016 book value of Guelph Hydro.
Was this a great deal or what?
By Gerry Barker
August 5, 2019
Part Four of Seven
Previously in Guelph Speaks:
Catch-up synopsis of the first four posts about the turbulent and financial history of the two Guelph administrations serving the city in the past 13 years.
The introduction of the seven-part series summarizes the impact on the citizens.
Part One –The birth of the Community Energy Initiative and the failure of citizens to petition for an audit of the city’s finances by the Ministry of Municipal Affairs and Housing.
Part Two – The unrealistic goals of the Community Energy Innovation plan to restrict greenhouse gases, by 50 per cent less energy per capita.
Part Three – Executive spite cost citizens $23 million more than the new City Hall contract when the general contractor, Urbacon Building Group Inc, was fired with the project 95 per cent completed.
And now, Part Four- A convenient collusion in which Guelph Municipal Holdings Inc. lost $66 million
Details of this GMHI audited financial loss of $66 million, has been surrounded with few details of why, in four years, it lost $66 million.
More importat to citizens, is what did GMHI and Guelph Hydro, do with the money?
In this part you will learn about what we do know, including the duplicate management of Mayor Karen Farbridge and Ann Pappert, Chief Administrative Officer of the Guelp. The mayor was also chair of CMHI and CAO Pappert was also Chief Executive Officer of GMHI.
That set the stage for a convenient collusion that ended with the city stuck with a debit of $66 million.
Read on for the details of this project, how it was mismanaged, conducted its business in secret and there were no checks and balances by our elected representatives. The public interest was ignored as was accountability and transparency.
Again what did GMHI and or the city do with the money over the four years?
There are three clues to what happened. First clue, in May 2016, a report to council from the GMHI management stated the holding company, owned by the city, was losing money and the business plan was not viable.
The second clue was a devastating staff report in July 2016 that declared GMHI was $68.3 million in the hole.
The third clue was the 2016 consolidated audit by the accounting firm KPMG that, among other things, stated the shareholder’s liability was $66 million.
It is calculated by a staff management’s review that GMHI has an “investment impairment” of $68.3 million. By 2017, it was estimated GMHI had lost an additional $17 million and was losing money every year. The reason was the operation of GMHI’s defunct District Energy operations that had to continue servicing customers with hot and cold water.
Double-barreled command enhanced by closed-session meetings
It didn’t help the public to understand what was going on because the GMHI Board of Director’s (BOD) meetings were conducted in closed-session as were a number of council meetings regarding GMHI.
To be blunt, the Farbridge-inspired Community Energy Innovation (CEI) an enterprise project, created in 2007, was a financial disaster with little or no hope of ever becoming remotely viable or an asset of the city and its citizens.
These projects, inspired by the CEI manifesto, impacted needed infrastructre maintenance as funding was diverted to GMHI.
Proof is that in 2017, city council approved a special one per cent levy on property owners in the 2017 budget following the 2016 KPMG audit of GMHI. The money was to be applied to infrastructure maintenance and replacement.
The CEI manifesto is still being used today as a guideline to fulfill the objectives of the environmentalists looking to change the city to conform to their principlres.
This decision by council was made following a staff report that there was a shortfall in infrastructure requirements of $400 million.
In my opinion, this levy was a ludicrous attempt to thwart public interest into believing council was doing the right thing dealing with infrastructure demands.
Some words of wisdom from someone who has been there
Back then, for the newly elected Mayor, Karen Farbridge, the comment of former U.S First Lady, Michelle Obama, at the 2012 Democratic Convention: “ Being President doesn’t change who you are. It reveals who you are.”
Becoming mayor, revealed who Ms. Farbridge was. As we subsequently learned, she was canny, comfortable in her persona, secretive and determined to change our city into her image of what it should be.
Did I mention that she was ruthless in dominating her administration?
It became the centrepiece of the CEI and reflected the vision of Mayor Farbridge.
In retrospect, we learned who Ms. Farbridge was. She became the uber boss of Guelph, serving not only as Mayor but also chair of the GMHI Board of Directors with her CAI, Ann Pappert, as Chief Executive Officer of GMHI.
A convenient collusion denied public participation
To the best of my knowledge, neither woman had any technical experience in managing large energy projects. They oversaw the GMHI energy projects that cost citizens $68.3 million as well as the corporation of the City of Guelph.
As it turned out, the city corporation was also the GMHI banker.
Their secretive complicity reminds one of the lines in the movie, Field of Dreams: “If we build it, they will come.”
Today, Guelph’s enironmental dreams linger as both Ms. Farbridge and Ms. Pappert are gone. There is no apparent benefit to the public to show for the huge investment made by the unknown “institutional investors.” These unidentified investors spent millions in the GMHI projects because they were convinced their boss, Mayor Farbridge, was in charge and knew what she was doing.
Now we know the identity of those investors.
They were the members of the Guelph city council supported by senior managers. Translation, those “unknown investors” were the citizens of Guelph represented by those city councillors they elected. It was a colossal failure by those elected representatives to assume their sworn fiduciary responsibility.
There was no public knowledge of the GMHI operations or the growing financial losses that built up for four years. The GMHI Board of Directors operated almost all the time in closed-sessions.
Nightmare at 1 Carden Street
The defeat of Mayor Farbridge in October 2014 was the start of the flood of information until May 16, 2016 when a report signed by GMHI’s CEO Pankaj Sardana. He replaced Ms. Pappert who left the administration ten days later.
There were no tag days for Ms. Pappert who was paid $263,000 for five months work according to the 2016 provincial Sunshine List published in March 2017. That amount included her 2015 performance bonus of $27,000. Wouldn’t that be called double dipping?
But why repeat the bonus in 2016 when she only worked for five months?
Council hired the accounting firm KPMG to conduct a consolidated audit of GMHI and its links to both Guelph Hydro and the city. That revealed the shareholder’s liability of $66 million.
The KPMG audit confirmed the cost of a project that was controlled by the Farbridge administration, aided and abetted by city councillors and senior staff.
Servicing the carrying costs of this investment by the city loan was estimated to carry 2 per cent interest cost. That’s $1,300,000 per year. When this is added over slightly less than three years, the debt is now stated as $68.3 million on the GMHI and city books.
Now, add in the growing annual $1,967 245 of GMHI “tax losses” of Guelph Hydro subsidiary Envida Community Corporation. You don’t have to be an accountant to figure out this was a growing serious financial disaster. It adds up to between debt-servicing and so-called tax losses, to some $3,268,245 every year.
Note: Tax losses can only be recovered when there are tax gains. GMHI never made a dime in its existence.
The arrangement of “the investors” loan to GMHI was one pocket being picked by another, with the public not knowing how their money was being played.
This was an example of municipal corruption at the highest level. It deserves a provincial inquiry to return the city to responsible management and reveal the truth.
Following the mone
The sick joke about all this is the some $10.5 million that GMHI allegedly sent to the city treasury through Guelph Hydro over a six-year period. Was it just a book entry on the GMHI balance sheet or did the cash really get transferred. How does a money-losing millions GMHI afford to send an annual dividend of $1,500,000 to the city?
That money was paid indirectly by the City of Guelph with no reduction of principal of the GMHI “investors” loan. It was the accounting merry-go-round of money between GMHO, Guelph Hydro and the city. Remember the city, that’s you and me, were the bankers.
Did Guelph Hydro, through its subsidiary, Guelph Hydro Electric Services Inc (GHESI), mortgage the city by more than $66 million due to those “institutional investors” aka city council, who provided the money?
The answer is no. The funds were advanced by the City of Guelph and approved by council. Who served on the GMHI Board of Directors? It was four loyal Farbridge councillors, Lise Burcher, June Hofland, Karl Wettstein and Todd Dennis, giving the mayor an ensured majority on city council and GMHI Board.
This resulted in blocking public accountability and transparency conducting the public’s business.
There’s a new sheriff in town
When newly elected Mayor, Cam Guthrie, took over city council he was handed a rock known as GMHI. As a member of the previous council, did he know about GMHI and its financial problems? It took a year of learning about the serious damaging details facing the GMHI financial disaster.
Yet, under his watch, city council held 42 closed-session meetings in 2015, thereby denying the public information about GMHI and its troubles. The shroud of secrecy descended barring accountability. During this period, who was his chief source about GMHI? Why it was CAO Ann Pappert.
Is it possible that Ms. Pappert sold out Karen Farbridge? Is that why council, in closed-session December 10 2015, rewarded Ms. Pappert with a $27,000 retroactive performance bonus? Was it for her work as CAO and CEO of GMHI since 2011?
Following the devastating staff report in July 2016, details of the depth of the GMHI mess became known, but not all the details. The plan to bail out of the multi-million dollar debacle was not revealed.
Any attempt to keep this failed project alive is just pushing more money down the rabbit hole, with no guarantees the city ever gets our money back or stops the bleeding of funds.
Next, Part Five: Along comes Alectra
By Gerry Barker
August 1, 2019
Part Three of Seven stories to fuel your min
It all seems like yesterday when there was a sea-change in the composition of Guelph Council, or so most citizens thought and I was one of them
The defeated councillors included Mayor Karen Farbridge, Maggie Laidlaw; Mike Salisbury was elected in ward 4 replacing Mayor-elect Cam Guthrie. Retiring from council was Karl Wettstein in ward 6, Andy Van Hellemond in ward tw
Here is the result of the 2014 civic election: the majority of progressives totaled seven. These include James Gordon, June Hofland, Phil Allt, Mike Salisbury, Leane Piper, and Cathy Downer. The uncommitted are Rodrigo Goller and Dominique O’Rourke. The moderate councilorsr include Dan Gibson, Bob Bell, Christine Billings and Mayor Cam Guthrie. Holding the swing vote in council is Mark MacKinnon, ward 6.
The story on election night was the defeat of Mayor Farbridge by rookie Councillor, Cam Guthrie.
The defeat of the mayor was the lawsuit brought by the general contractor of the new city hall and renovation of the old city hall into a provincial offenses court. In 2006, council approved the $42 million contract.
Karen Farbridge was elected mayor in 2006 and her council held a majority of 11 councillors out of 13.
But a funny thing happened before the contract was completed. September 18, 2008, the general contractor, Urbacon Buildings Group Inc., was kicked off the job that was 95 per cent completed. Guelph police were called to expedite the removal of all employees including the sub contractors.
The reason was, and no one was taking responsibility including the Mayor or council or senior management, admitted they were responsible.
Later, chief Administrative Officer Ann Pappert said that her predecessor, CAO Hans Loewig, was responsible for the Urbacon firing. She said his authority was covered under the CAO bylaw.
Following the time of the firing of the general contractor, Mr. Loewig was awarded a three-year contract paying $190,000 annually for his work on the Urbacon file. Ann Pappert replaced him in 2011.
At best, Mr. Loewig was a part-time CAO being allowed 12-weeks, vacation spent at his Arizona home. Mr. Loewig was hired to replace the former CAO, Larry Kotseff, as acting CAO and on contract. That changed to permanent employment in 2008 followingnthe Urbacon firing.
Urbacon did not sit idly by and served the city with a wrongful dismissal suit for $19.2 million.
Meanwhile, the Farbridge administration was faced with hiring replacement contractors to complete the project Then the city counter-sued Urbacon for $5.3 million. Next was to deal with the completion bondholder, Aviva, and the architects charged with overseeing the construction. This was followed by lawsuits from the sub contractors who were not paid for their work before the firing of the general contractor.
Once work stopped it was more than a year before it was completed, using two other contractors to finish the job.
Whew! This was a disaster caused by the Farbridge administration despite the Mayor never owning up to it. My sources said she was enraged because Urbacon kept advancing the completion date.
There were reasons for this. First, during a subsequent five-week trial in 2013 in Brampton, the court heard there were more than 300 contract changes ordered by the city. Second, there was a sense of emergency over a number of city employees still working in nearby rented offices in which the leases had or were about to expire.
The Brampton trial was wrapped up in early 2013 and Superior Court Justice, Donald MacKenzie, delivered his judgment brief in March 2014 in favour of Urbacon. It was followed up with a devastating detailed judgment in June.
This document ordered that the costs of the case were to be completed in October, the month of the civic election.
Undaunted, the city lawyer took the case to another court requesting the costs of Justice Mackenzie’s judgment be postponed until after the October civicelection. That was denied by the presiding judge who said he would not change Justice Mackenzie’s’ judgment. In August, a settlement was reached costing the city$8 million payment to Urbacon.
This was the final event that led to the mayor’s defeat in October.
Shortly after, CAO Pappert announced that the city hall costs had increased by $23 million.
Urbacon, the six years of unnecessary expenses
In my opinion, as a taxpayer, this was a sloppy, self-centered series of events that spun out of control and should never have occurred.
When one thinks about it, that mismanagement, recognized as such at the ballot box, could have been used to build a new downtown library as was promised by two Farbridge administrations. Five years later, we are still eaiting.
In January last year, two city Councillors, June Hoflanf and Leanne Piper, supporters of Ms. Far bridge, during a workshop to assist women to become entrepreneurs, asked attendees to donate money to re-elect the former mayor.
Wisely, Ms. Farbridge chose not to be a candidate in last October’s civic election.
Next, Part Four of Seven:
Guelph Municipal Holdings Inc. covers-up losses of $68.3 million
By Gerry Barker
July 29, 3019
Part Two of Seven
This part of the series outlines the objectives of the Community Energy Initiative (CEI) plan that was formed with excitement across a range of citizens when the non-elected consortium produced the future plans for the city. It was the beginning of the greening of Guelph.
The CEI was created by former mayor Karen Far bridge and supported by her majority on city council. As a result there were no checks or balances to question the decisions made by council for the following seven years.
The founding group was composed of members of the city administration, Union Gas, (now Enbridge), Guelph Hydro, representatives of business and Industry, University of Guelph, school boards and the Guelph Chamber of Commerce.
Without doubt it was a blue chip group from many interest groups in the city.
Here are the reported CEI goals:
* Use 50 per cent less energy per capita
* Produce 60 per cent less greenhouse gas emissions per capita
* Encourage and facilitate community-based renewable and alternative energy systems
There is no estimate of the costs of these goals or details of achieving them.
The CEI report, at the time, said that the goals would position Guelph among the top energy performers in the world.
How has that worked out for you?
Let’s start examining goal One to use 50 per cent less energy per citizen.
Setting goals is one thing but forcing people to change the way they live is another matter.
In 2007, the Farbridge administration initiated expansion of bicycle lane networks on major city streets to help reduce dependence on fossil fuel emission by motor vehicles.
Piggy-backed on this goal was increasing use of alternative transportation, (bicycles) and public transit.
The first major project was installing dedicated bike lanes on Stone Road in 2009 by taking advantage of the tri-government infrastructure program in which Guelph’s share was one third of the $66 million approved by all parties.
That project cost $2 million. Then council approved a ten-year bike lane development plan, spending $300,000 per year. But here’s what happened:
The city embarked on resurfacing portions of major streets all of which were to accommodate bike lanes. Part of the individual projects was to shrink the road to three lanes to two for traffic and a centre lane for left turns. The shrinking included painting in bike lanes on either side of their freshly resurfaced road.
But this accommodation for cyclists did not extend beyond the portion being resurfaced in most cases. These include Silver Creek, Woodlawn, Stevenson, Speedvale, Woolwich, Victoria, Gordon, Downey, and Clair Road to name a few.
This attempt to provide alternative transportation, thereby reducing greenhouse gas emissions, was thwarted by a growing population that was 119,000 in 2007 when the CEI was approved, to 131, 000 by the last national census in 2016.
Does more mean less?
Accordingly, more people mean more cars, trucks and transit vehicles. That adds up to increasing greenhouse gas emissions.
The new housing enclaves of attached strip houses, low-rise condos and high-rise apartment buildings, has further exacerbated the building boom of new housing. Then add the undergraduate population of the University of Guelph that has expanded with 22,000 now attending.
Traffic congestion, intensification following new housing development and improving rail service to Toronto, These are factors in increasing energy use, not decreasing it when the CEI goals were approved.
The same events apply to the second goal of producing 60 per cent less of greenhouse gases per capita. The timing of this vision is not mentioned in these goals’ report. As it turned out, it was an open cheque book opportunity for city council to introduce personal ideas and projects to achieve these CEI goals.
WE now know that more people driving more fossil-fueled vehicles does not reduce the greenhouse gas emissions
Let’s follow the money
Who benefits from all this housing built in Guelph since 20017?
Well, the Chamber of Commerce should be happy with the growth of commercial business in the city. The building trades have prospered and last, but not least, the development industry and supporting cast of architects, town planners and lawyers who benefit from the housing and commercial growth since 2007
In Mayor Guthrie election financial report presented to the city, it revealed an interesting fact. The mayor collected some $86,000 for his campaign from people who did not live in Guelph. Most were developers and service corporations seeking access to the Guelph market. Of this group, out of the 100 individual and corporations who donated some 29 per cent were from the development industry. Most of the donations were $1,200, the maximum allowed by Elections Ontario.
Did all this development meet the 2007 CEI goals of reducing energy in the city by 50 per cent, or reducing 60 per cent less greenhouse gas emissions or facilitate and encourage community based renewable and alternative energy system?
WE now know how that last goal went. All it costs citizens more than $66 million with the failed Guelph Municipal Holdings Inc. district enery projects.
The irony is that despite the loss of millions of dollars by two administrations, is that the remnants of the Farbridge eight-year social engineering adventure is why does the CEI still exist? Its premise and goals are still influencing today’s council.
How did all this lower energy use reduce greenhouse gas?
This part will explain in 2009 how the wheels falling off when Guelph Hydro announced its subsidiary, Ecotricity Corporation, reported a loss of $3,945,000. The report stated that the loss was due to declining extraction of methane gas used to generate electricity at the Eastview landfill garbage site. This is contributed to an “impairment charge” of $2,984,000 of the corporation’s total loss in 2009.
An “impairment charge” is an accounting term based on the amount of an investment is less than the carrying charge, then the assets are deemed to be impaired. The amount of the investment must be eventually written down to the recoverable amount, if any exists.
In 2014, Councillor Cam Guthrie defeated Mayor Farbridge. There was hope that reform would occur and civic sanity would arrive.
In other words, it’s Act Two of the Farbridge CEI legacy and citizens are all empty-pocket endangered species.
There is only one way out and that is to elect a council of moderate, thinking, and responsible candidates to change the menu and reform the administration.
Stay tuned to more information that will be revealed in future parts of the Guelphspeaks seven-part series on the pathological odyssey of corruptive practices. There are other examples of losses and impairment charges that slammed city finances.
Miss the introduction and Part One? All published parts are located in the Guelphspeaks archives located on the website and are filed post publishing’s usual comments are welcome
Next, Part Three: is to be published August 1, 2019.
How irritated spite increased the cost of the new city hall by $23 million