For Sale: Guelph’s Light and Power Corporation and collection agency

By Gerry Barker

March 24, 2017

As the resident curmudgeon of the Royal City, I have learned to accept the good with the bad.

Yes, I do have my detractors, those folks who accuse me of being cranky (at times true), angry, (ask my wife), boring. (same answer as angry), disappointed, (often), right, (most of the time but make mistakes), trapped, (gotta keep doing what I do because no one else is doing it). Most people know what IT is.

Then there are the good folks who understand what I am writing about and there are thousands of them who drop into www.guelphspeaks.ca regularly. Their support and comments really keep me motivated to expose the way our city has been mismanaged for the past ten years, and the price it has cost us.

Simmering on the back burner is an issue that most citizens were not aware of until recently, the secret record of Guelph Hydro (GH) and it impact on all citizens.

The wholly owned subsidiary of the city, GH came under the control of former Mayor Karen Farbridge. The two-term mayor had an agenda to turn Guelph into a paragon of environmental practices and standards; attain self sufficiency in electricity supply; remake the downtown; reduce the city’s carbon footprint by reducing vehicle lanes on major roads to accommodate bicycle lanes; reduce waste going to the landfill by creating a organic waste facility in a large, waste management complex on Dunlop Drive.

I am very concerned about the current administration’s efforts to sell/merge Guelph Hydro. In fact, Chief Administrative Officer, Derrick Thomson heads the Strategic Options Committee (SOC), composed of five non-elected individuals. . The committee is now in phase two of disposing of Guelph Hydro.

Don’t be misled. This is a full-court press by the Guthrie administration to liquidate the jewel of city properties. It’s going on right now as the SOC seeks bids to sell/merge Guelph Hydro to the highest bidder.

“The Committee may also engage in discussions with potential partners, develop draft agreements, and develop an implementation plan.” That’s from the “Energizing Tomorrow” website the online voice of the SOC. Who are the members?

The chairman is CAO Thomson. The co-chair is Pankaj Sardana, CEO of Guelph Hydro. The third member, Bo Bell, is a board member of Guelph Hydro Electric Systems. The “public” members are Mark Goldberg, former member of the GMHI board of directors, and Ron Puccini a retired engineer.

According to the Energizing Tomorrow website, only Mr. Goldberg and Mr. Puccini live in Guelph.

There are no elected representatives on this committee. There are two individuals, Mr. Sardana and Mr. Bell who are closely associated with Guelph Hydro.

So, we can conclude that this operation that not only includes the SOC but also Guelph Hydro Electic Systems. The Board of Directors of Guelph Hydro Electric Systems include: Ms. Armstring. Ms. Foutain, Mr. Bell, Bruce Cowan, Ted Sehl, Rick Thompson and Ms. Jasmine Urisk.

Under no circumstances am I suggesting that these folks were complicit in the GMHI financial disaster.

There is not one elected member of city council serving on these two key organizations that govern Guelph Hydro. The utility is charged with the sale or merger of the utility that serves some 53,000 customers in Guelph and Rockwood.

There does not appear to be any checks or balances or direct oversight of this potential disposal of the most valuable asset of the city’s assets. Granted, council must have the final say but its members are not directly involved in this exercise being handled by the SOC,

It also comes as a surprise that there are certain members of Guelph Hydro Electric Systems who had exposure to the Guelph Municipal Holdings Inc (GMHI) financial disaster that cost the city $26.6 million. These include Jasmine Urisk, Ted Gehl, Jane Armstrong, Judy Fountain and Robert (Bob) Bell.

Mr. Goldberg of the SOC served on the GMHI board of directors. Mr. Sardana, co-chair of the SOC, was formerly CEO and CFO of GMHI.

Now most residents and businesses are aware of the huge increases in electricity distributed by Guelph Hydro, The price zoomed in four years by 42 per cent compounded.

In our house, our two-month mid-summer bill was $662 (including water). Last summer our monthly bill in July was $245 or $172 less, based on the old two-month billing cycle.

Perhaps someone can explain to me why our property taxes and user fees are approved by our elected city council. In Hydro’s case, those electricity and water charges are approved by a faceless, appointed board of directors.

It’s time to form a Hydro Commission that is elected by the citizens.

Doing some checking on what other provinces are paying for power. Better fasten your seat belts. Here are the results:

The cost of 1,000 kilowatts in Ontaro is $226.03

If you lived in Quebec the average cost of 1,000 kw is $67.89. That’s 70 per cent lower than Ontario.

Living in British Columbia the cost is $89.12. That’s 61.per cent less than Ontario.

Switching over to Manitoba, the cost of 1,000 kw is $81.09 or 64 per cent lower than Ontario.

So why the huge difference?

Ontario decided in 2006 that it was going to replace its coal-fired generating plants with energy systems using the wind and the sun to generate electricity. What has proved to be a disaster by the McGuinty and Wynne governments, has driven the cost of power to be the most expensive in Canada.

They did this by inviting private solar and wind-power producers to develop wind farms and large solar arrays across the province that incorporated renewable energy. The incentive was a guarateed kilowatt fee for 20 years of some 17 cents. The Adam Beck waterpower generation plant on the Niagara River costs about 6.5 cents per kw. Throw in the high cost of the nuclear power generating plants and Ontario, within a few years, priced itself out of the market.

The Green energy plan was so poorly managed that the Ontario Power Generating Corporation, (part of the old Ontario Hydro) was giving surplus power away to border states because of oversupply. You can’t store electricity.

Which brings me to an interesting story about a new electricity storage system developed by Tesla, the electic car and battery manufacturer. It’s called the Teslan Wall and it hangs on the wall in the garage storing power overnight.

The story said the cost per unit starts at $8,500 (US$) or the latest version is $11,500. This does not include the solar panels needed to feed the power in the household. The story goes that one client spent $31,000 adding extra battery packs. The lady is 81 and obviously optimistic that she will eventially recover her investment.

I bring this up because the SOC members told council that household electricity storage units will be commonplace in the future. Right now, the industry is a baby and it will take years for affordable power storage units to be available to most people.

Guys, I’d take that one off the table. This is today, not tomorrow.

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Royal City Blues: A documentary

By Gerry Barker

March 20, 2017

If there ever was the opportunity to develop a documentary to describe the woeful record, it is now outlining how three administrations have lost more than $136 million in ten years. Perhaps it’s time to reconcile the city’s finances by hiring a Chief Financial Officer with experience and savvy.

Here is a draft outline that details the events that have drained the financial resources of the city, to the extent that the current Guthrie administration is engaged in selling Guelph Hydro to rebuild the financial losses of previous administrations.

The Guthrie administration is hamstrung to even pay for needed infrastructure repairs and replacements, let alone reducing costs. A new city report clearly states that it is going to cost double what the administration estimated when approving the 2017 budget.

And council couldn’t even get that straight when it voted to double the so-called special property tax levy from one per cent to two percent. The staff recommended a one per cent levy to help pay for the infrastructure costs but council added another one per cent to pay for “city buildings.” The reality? It is an attempt to start construction of the $60 million South End recreation centre.

Trouble is there is no capital funding for this project. So council approved shelving some $700,000 to replace the parking meters downtown, a project in the 2016 budget, to produce parking revenue. Then council turned around and spent some $650,000 toward pre-construction costs of the South End recreation centre.

Most people would believe this is a commitment to proceed with the project. Most people will figure out what is occurring is a back-door attempt to force the next council to come up with the capital funding for the project.

Both Ward Six councillors, Karl Wettstein and Mark MacKinnon, pushed this attempt to force future councils to pay for it.

Is this any way to run a city? Any way to mortgage future generations of residents to pay for something they did not vote for? Is it right to ignore the costs of infrastructure to assuage the desires of a minority of citizens?

Already, there are decisions being made to ensure the re-election of the present majority of council including the mayor. A key problem is the greatly diminished level of reserves that have been used to shore up projects and balance sheets for far too long.

That’s where we stand today. But let’s look back at how and when we got into this mess.

Back to the future, Guelph style

In February, City Solicitor, Donna Jaques, resigned and left for a job in North Bay with the Ontario Northland Railway. Deputy Chief Administrative Officer, Mark Amorosi, who was dismissed, followed right after her departure. They are yet further additions to the exodus of senior executives leaving the city since Mayor Cam Guthrie was elected. Scott Worsfold, another city lawyer resigned last fall.

More than 20 senior managers have left the city since 2014. These are the people who administer the operations of our corporation. In any business, the adage is it’s more difficult to replace a key employee than to fire the incumbent.

An example is the recent announcement that the General Manager of the Community Energy Initiative (CEI), Rob Kerr, has been dismissed. At the same time the city is setting up a Climate Change Office. Is this really needed? Premier Wynne is already taxing us through our Hydro bills for our use of household fossil fuels. These include use of natural gas in a variety of appliances including barbeques, stoves, dryers, fireplaces, furnaces, and water heaters.

And now we need a Climate Change Office?

What follows is a documentary of how our city investments have been squandered by three administrations. Since 2007, these administrations have created social engineering projects that most people did not request or want.

It documents abuse of the public trust, its right to know and participate. We have been subjected to absolute control, secrecy, distortion of facts and unparalleled arrogance. So, we can only blame ourselves as we elected them. Here is a record of how our money was misused and managed without recourse on our part.

Scene One: The genesis of a financial disaster

It’s early in January 2007 when the newly elected Mayor of Guelph, Karen Farbridge, persuades leaders of organizations across the city to join, creating the Community Energy Initiative. More than 20 prominent individuals accepted her invitation to join and participate. They represented the Guelph Chamber of Commerce, The University of Guelph, Guelph Hydro, Industrial and commercial leaders and energy experts.

Little di we know then of the impact on city finances of this project.

Scene Two: Spending $16 million renovating a derelict building on someone else’s property

Mayor Farbridge becomes immersed in running her city and introducing a number of initiatives. These included approval of spending $12.7 million to move the Civic Museum into a leased former derelict convent next to The Church of Our Lady. This project took five years to complete and cost more than $16 million. Of that amount, the federal and provincial governments provided roughly $6 million. As an aside, more than $1 million was spent landscaping the hill in front of the Museum, on land the city does not own.

Scene Three: The $33 million great landfill diversion scheme

With little public input, council approved a new solid-waste management system. It included spending $33 million on an organic waste-processing facility that had a processing capacity that was three times the needs of Guelph for 20 years. It was operated by Aim Environmental a subsidiary company of the builder of the plant, Maple Reinders. Another Maple Reinders subsidiary called Organix sold the compost produced.

Details of the organic operation were never revealed to the public, including the sale of the composted material. The city management said it could not reveal the details because of “private proprietary interests.” An internal audit of the waste- management operations in 2016 revealed it was losing $270,000 a year. The Executive Director of Environmental Services, Janet Laird, resigned after the 2014 election. Her General Manager, Dean Wyman, left in December 2015 for a job in Edmonton.

The department is now undergoing a rationalization study to develop a greater degree of effiency and reduce reduce costs of an operation that is losing $270K a year. This is under the leadership of Deputy Chief Administrative Officer, (DCAO) Scott Stewart. Good luck, Scott.

Scene Four: A fateful decision to get tough and lose millions

It’s spring 2008. Mayor Farbridge was getting impatient about the progress of General Contractor, Urbacon Buildings Group Corporation, building the new city hall and renovating the old city hall into a provincial court. The original contract was $42 million for both projects. On September 19, 2008, Acting CAO Hans Loewig ordered Urbacon off the site, supported by Guelph Police.

For his loyalty, former CAO Loewig was given a four-year contract starting at $199,000 plus generous benefits, including several weeks of vacation annually. Ann Pappert replaced him in 2012.

Urbacon responded by suing the city for breach of contract and sought $19,184,181.71 in damages. This began a legal wrangle that lasted for five years and eventually included five lawsuits. Fast forward to March 2014. Justice Donald MacKenzie delivered a stunning verdict in favour of Urbacon and chastised the chief city witness, the site manager, Murray McRae for his testimony. The mayor’s impatience cost a $23 million overrun of the new city hall, from $42 million to $65 million.

Here is a comment from a guelphspeaks posting September 9, 2014:

“This remains an epic error in judgment for which the Farbridge administration must take responsibility. How can they say, with a straight face, that the costs are covered and there will be no impact on taxpayers? They’re manipulating your money to suit their agenda and again avoiding responsibility.”

As it turned out, it was CAO Ann Pappert, who made that claim misleading the citizens.

Scene Five: The year of multi-mistakes leading to the defeat of the mayor

Election year 2014, witnessed several events. They included the Urbacon decision, transit strike and approval of the $34 million police HQ renovations which would take more than five years to complete. These events impacted the future of Mayor Farbridge and four council supporters who either decided not to run or were defeated.

The progressives were stunned over the loss of their leader. Changes came swiftly. The top senior staff was reorganized when Janet Laird retired to Whistler, B.C. and Derek McCaughan resigned. The shuffle occurred before Cam Guthrie took over as the city’s new mayor, December 1, 2014.

Observation: The city administration does not have much success when it comes to constructing major capital projects and staying on budget. Besides Urbacon, there was the Civic museum, both of which exceeded contracted costs by $33 million.

Scene Six: It’s 2015 and we’re off to a rocky start

Early in 2015, there were events that would shape the new council that was dominated by seven supporters of the previous Mayor and her policies. In January, Mayor Guthrie attacked me in an email urging his followers to ignore me. The outburst was attributed to a piece I published in guelphspeaks.ca in which I said the council was reviewing CAO Ann Pappert’s contract.

The Mayor, for whatever reason, supported Ms. Pappert until the day she gave her notice in April 2016 that included her extravagant retirement payoff estimated to be more than $150K. Early last year, concerned citizen, Rena Akerman, sent a detailed email to other citizens outlining the performance of the CAO in the past four years. Mayor Guthrie threatened legal action against Ms. Akerman. Fortunately for him, that didn’t happen.

Scene Seven: the Guelph Municipal Holdings debacle

In 2015, there was an even bigger scandal brewing. Mayor Guthrie and Coun. Karl Wettstein were appointed as council representatives on the Guelph Municipal Holdings Inc (GMHI) board of directors. The former mayor said GMHI was to manage the city-owned assets including Guelph Hydro, its subsidiary Envida Community Energy Corp. and the Guelph Junction Railroad.

Simmering below the surface was this disastrous experiment created by the former mayor. It is a wholly-owned corporation of the city. Mayor Farbridge appointed herself as chairperson of the GMHI board of directors, composed of a majority of her council supporters, plus two members of Guelph Hydro and two independent directors. CAO Ann Pappert was appointed Chief Executive Officer of GMHI and remained in that job for four years.

On May 16, 2016, the truth was revealed in a GMHI situation report signed by Ms. Pappert in her capacity as city CAO, and Pankaj Sardana, her successor at GMHI. In fact, in its five years of existence it has never made a dime but the losses climbed to more than $26.6 million. This loss, according to a May 16, 2016 was reported and presented to council, jointly by CAO Ann Pappert and Pankaj Sardana, CEO and CFO of GMHI.

The report stunned everyone when Mr. Sardana said GMHI had lost $26.6 million and had no financial ability to continue operations. It turned out to be only the tip of the iceberg. GMHI had accepted a loan of $65 million from Guelph Hydro to expand its projects to achieve electric power self-sufficiency for the city. That loan is now an impaired asset on the city’s books and was on the 2015 Financial Information Report valued at $69 million. “Impaired Asset,” means that the receiver of the funds, GMHI, has no money to pay the interest on the loan. Also it has insufficient assets underlying the loan.

Over time, this large loan will have to be written off. Unless, the city can sell Guelph Hydro and profit from the estimated proceeds of more than $150 million. Later this year, the Strategic Options Committee will make its recommendation after shopping Guelph Hydro in the market place.

It is only recently revealed the former mayor and the GMHI board had secured land in the Hanlon Business Park and Downtown to build large natural gas-fired generation plants as part of its Community Energy Initiatives. Again, public input was not invited or considered.

The two natural gas plant sites were obtained when the Guthrie administration shut down operations. Guelph Hydro was brought into the city as part of its finances.

It is now plain what the former mayor was bent on accomplishing. Electric power self-sufficiency and sell Guelph Hydro to the highest bidder to get rid of the losses.

Please think about this: If Ms. Farbridge had been re-elected in 2014, we would still be kept in the dark while millions were poured into a scheme to make our city self-sufficient in electricity supply. If fact, Mr. Sardana said that in order to make the two $8.7 million District Energy Nodes to break even, it would require an additional investment of $60 million.

Did the former mayor ever consider the billion it cost to dismantle two partially built gas-fired plants by Premier Dalton McGuinty to save four Liberal seats?

Well folks, so far it’s only cost you and me $96 million including the $65 million loan from Guelph Hydro. It will eventually disappear into the mists of One Carden Street.

For comparison, the Ontario gas plant tear down cost just over a billion dollars. The population of Ontario (including us) is more than eight million people. So Guelph loses $96 million spread over some 121,500 residents and businesses. Our loss will cost $790 per person, babies, young, old and the infirm. That money has gone.

McGuinty’s gas plant loss cost each of the eight million population of the province $12,500.

But wait a minute! We are included in the Provincial figure so that means every citizen of Guelph is responsible for $13,293. A high price to pay for badly managed, high cost social engineering schemes, all of which failed on both levels of government.

The real problem is that it’s public funds that have been misspent. Regardless of whether it’s posted in the Guelph Hydro books or the city books, it’s a stunning loss and misuse of public money. The city has no choice but to write it off.

But here’s the concern for all citizens: Until there is an independent investigation and forensic audit of the whole GMHI debacle, the people will never know the truth. Most recent development is the dismissal of Rob Kerr, general manager of CEI and the formation of ”Climate Change Office.”

Is this what Karen Farbridge promised when she campaigned in 2006 to “Put Guelph back on track?” Just asking.

Scene Eight: Revenge: Thy sting is not so sweet

In early 2015, Susan Watson, a strong supporter of the Farbridge administration, hired a Toronto lawyer to represent her in an action before the Compliance Audit Committee (CAC). It was in regard to a $400 donation that had been given to former Ward Six candidate Glen Tolhurst by the civic action group, GrassRoots Guelph (GRG). Her lawyer argued that GRG was not permitted to donate to candidates under the Ontario Elections Act (MEA).

Two of the three CAC members voted to have an independent auditor examine Mr. Tolhurst’s election financial statement and the role of GRG. As members of GRG, my wife, Barbara, and I, were subpoenaed to appear before the auditor, William Molson of Toronto. We were questioned for an hour and a half. A couple of weeks later the auditor presented his findings to the CAC committee exonerating Mr. Tolhurst and GRG of any breach of the Municipal Elections Act.

The estimated $11,000 costs of this procedure were paid by the taxpayers and not by Ms. Watson who initiated the complaint.

Scene Nine: Along comes the mother of municipal financial failures

Starting in 2011, GMHI annually deposited a $1.5 million dividend to the city. In 2015, GMHI said it had sent a total of $9 million to the city as dividends. The only problem was the GMHI never made any money. Ten days after signing the report, she left the city to work for the Province of Ontario.

So far, more than $8.7 million, the cost of installing the two District Energy nodes, has either been written off or written down. But there remains a number of unresolved issues including contracts with those buildings connected to the co-generation thermal system supplying hot and cold water. The city cannot afford to subsidize these already installed connections to five large buildings. The statement has been made that it will continue to supply the service. The city has maintained that the Community Energy Initiative is under review with decisions to be made when a staff report is presented to council.

The real problem lies with the $65 million Guelph Hydro loaned to GMHI after board chair Karen Farbridge and her board voted to fold Guelph Hydro and its subsidiaries into GMHI. Since then, the city has taken control of Guelph Hydro. But a major problem remains. In doing so the city has shifted the Guelph Hydro loan to GMHI into its own books as an asset, although impaired. That means that in 2015, that impaired asset had grown to $69 million because GMHI had no money to even pay the interest. The huge problem is that there are no assets in GMHI or funds to even pay the interest on the loan.

Well, the fact is the city now has the loan on its books it’s like lending your son or daughter $25,000 to go to college and never expecting it to be paid back. It’s all in the family.

Scene Ten: The fallout of financial mismanagement will affect all of us for years

Please think about this: If Ms. Farbridge had been re-elected in 2014, we would still be kept in the dark while millions were poured into a scheme to make our city self-sufficient in electricity supply. If fact, Mr. Sardana said that in order to make the District Energy Nodes to break even it would require an additional investment of $60 million.

It is only recently revealed the former mayor and her colleagues on the GMHI board had secured land in the Hanlon Business Park and Downtown, to build large natural gas-fired generation plants as part of its Community Energy Initiative.

Again, public input was not invited or considered. Did the former mayor ever consider the billions it cost to dismantle two gas-fired plants, partially completed by the McGuinty Liberals to save four Liberal seats?

Well folks, so far it’s only cost you and me $96 million including the $65 million loan from Hydro.

When you stop and think, imagine what that $96 million could have done to capital spending in the city. Particularly for a new downtown library, the former mayor promised that 19 years ago. Or the South End recreation centre that was promised by the same mayor nine years ago as a priority.

These are bread and butter issues. We have been held hostage for ten years now by a radical group of progressive councillors who are “big picture” representatives. They obsess about climate change, energy, bicycle lanes, public transit, water sold commercially from the aquifer, protecting the environment.

Running a city is not rocket science. Councillor’s primary responsibility is to make sure everything works. It includes roads, water supply, waste disposal, parks and recreation, cleaning the streets, picking up the garbage and creating jobs.

And please don’t tell me that we are better off than we were four years ago adding more than 400 new full time equivalent employees, with property taxes soaring by 14.2 per cent and user fees for using our own dump and managing our storm water.

 

 

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Former CAO Ann Pappert received $489,818 for 17 months work when she resigned

By Gerry Barker

March 16, 2017

I woke up the other day to read a city press release about the City of Guelph’s Sunshine list of employees earning more than $100,000 a year. I was not aware the city had its own Sunshine list.

There were some astonishing inclusions and exclusions.

According to the just released 2016 Provincial Sunshine list, former Chief Administrative Officer (CAO), Ann Pappert, was paid $263,757.32 in 2016. Now you would assume that was for the year but Ms. Pappert left the city May 26, 2016, Seems like a lot of money for less than five months work.

So I checked the 2015 Provincial Sunshine list and it showed Ms. Pappert was paid $226,060.96.

The only possible conclusion was that Ann Pappert was paid $489,818.26 for 17 months work as CAO, from January 1, 2015 to May 26, 2016.

This was reported by the city to the Province for inclusion in the 2015/2016 official Sunshine lists of those public employees earning more than $100,000 a year

First, let’s do a little math. We’ll divide the money the Province says she received in 2016 by 5 = $52,757 per month. Now multiply that by 12 to determine what her annual salary would be, $633,084. That can’t be possible.

But, the 2015 salary reported last March showed that CAO, Ann Pappert, received a $37,591 increase for 2015. This increase was 17.11 per cent more than her previous base salary of $219,657 earned in 2014. Apparently, it has been assumed, Ms. Pappert was paid $257,248 in 2015. That was not the case. According to the 2015 Sunshine List, she received $226,060.

Hmmm, there remains a serious difference of Ms. Pappert’s employment payments.

Deputy Chief Administrative Officer (DCAO) Mark Amorosi explained that the payment to Ms. Pappert was discussed in closed session prior to the approval of the 2015 budget, March 25, 2015.

For the past year, guelphspeaks has been trying to get at the truth because Mr. Amorosi said the increases decision was made by council in closed session, December 10, 2015. It included a retroactive payment of some $28,000.

Why does the Sunshine List show Ms. Pappert received $263,757 for five months work in 2016?

Does the city report what it pays its employees each year in the audited Financial Information Report (FIR) as required annually?

Or does it play games shoving expenses to the next year to avoid a negative variance that the city is not allowed to do and is required to balance its books when presenting the FIR at year end.

For the past five years of Ms. Pappert’s tenure as CAO, there has been a negative variance each year. That means the budget, of which Ms. Pappert oversaw, was overspent and money was taken from the reserves to balance the books as required by law.

Trouble is the reserves became seriously depleted dropping from a reported $70 million in 2009 to around $11 million in 2015. The BMA consultant group warned the city in 2014 that the reserves were in a “red flag” condition and required action to replenish.

Why was this allowed to occur?

But there is more:

Former Chief Financial Officer, Al Horsman, left the city in August 2015. Today his name shows up receiving $188,999 in 2016, the equivalent of a full year on the job. Not bad for eight months work … in 2015. The question is why did Horsman leave? He was deposed as CFO in the November 2014 reorganization of the senior management and switched to the Waste Management, Environmental Services and Engineering portfolio.

Horsman took over to discover the debacle of the deal made with the Rizzo brothers of Detroit to recycle material shipped from the motor city. The deal fell apart and was reported to have cost Guelph some $2.5 million. In December 2015, Solid Waste Manager Dean Wyman, who was involved in the Detroit deal, left for a similar job in Edmonton.

With Horsman gone, it left just three Senior managers, CAO Ann Pappert, Deputy Chief Administrative Officers (DCAO) Mark Amorosi and Derrick Thomson.

The revelation of the large increase awarded by council to the remaining three top managers in March 2016, triggered the resignation of Mr. Thomson who said he was taking a job with the Town of Caledon. In April, Ms. Pappert announced she was resigning.

Along with her duties as CAO, Ms. Pappert was also Chief Executive Officer of Guelph Municipal Holdings Inc (GMHI), for four years. As CAO she signed off, along with her successor at GMHI, Pankaj Sardana the jointly presented the report to council, acting as shareholders, May 16, 2016. It revealed that the city-owned GMHI was broke and had lost $26.6 million. Ten days later she left her job.

In June, the city persuaded Mr. Thomson to return and take over as CAO.

The 2016 Provincial Sunshine List states Mr. Thomson received $214,026. Due to turbulence in the executive offices, Mr. Thomson revealed in October his new CAO salary is $230,000, plus a taxable benefit of $9,664. Sigh! The more things change, the more they stay the same.

Last week, the 2016 city’s “Sunshine List” release said that in 2016 Mr. Thomson earned $245,302 plus the taxable benefit for a total of $254,966. Mr.Thomson should be commended for giving the citizens his salary details despite the fact that they do not jibe with the official provincial data.

Here’s another strange development. DCAO Scott Stewart was hired in November 2015 to replace Mr. Horsman. There is no record in the provincial Sunshine Lists of his hiring including pay details, in either the 2015 or 2016. He obviously performed his duties in 2015 and 2016 but the record shows he doesn’t exist. Well he does and he is doing a fine job.

Yet another example of Voodoo accounting

In the case of DCAO Colleen Clack who was promoted in June to replace Mr. Thomson as chief of operations and public transit, there is no evidence that reflects her new responsibilities. She is listed at $145,316, the rate of her former job in 2015.

I believe that when someone holds a job in the calendar year, his or her remuneration should be reported in that year. How can the administration budget accurately when it conducts its business this way? We’re not talking about a few dollars here but thousands. It represents a deliberate distortion of the staff costs in the reporting year.

In 2015 the city listed the payments made to police staff earning more than $100,000. This year according to the city release, the police are not included because they file their own Sunshine List to the Province. But are the police numbers included in the total staff count?

Finally here is my favourite example of Voodoo management practices.

In 2014, Guelph Police Chief Bryan Larkin is pushing the Police Services Board to spend $33 million for a major renovation of police headquarters.

The city representatives on the Police Board, Mayor Karen Farbridge and Coun Leanne Piper support him.

Remember in June 2014 he announced that he is leaving August 31 to take over as Chief of the Region of Waterloo Police Department.

That did not stop Larkin from promoting that the city coughs up the money for the renovation. So his final payout of $183,553.80 was reported in the 2015 provincial Sunshine list. He only worked eight months in 2014, but received a full year of pay,

But citizens in 2015, were also paying his replacement, Jeff Deruyter $188,283.56. According to the Provincial Sunshine List in 2015, the cost of two police chiefs was $371,836.

When the 2015 budget was prepared after Mayor Guthrie took over, the finance department had ample time to adjust the 2014 Larkin figure to reflect the exact time he was on the job. It is now clear that our city, despite the fact that he resigned in August 2014, paid him for the whole year.

And you wonder why our taxes and user fees outpace the Consumer Price Indexes promised to be reduced by Mayor Guthrie in his election campaign.

The 64 firemen plus those paramedics in the $100K bracket are included in the 2016 list.

These folks are public employees and the public has the right to know who they are and what they earn if it’s more than $100,000. It appears the same rules do not apply to the non-union managerial staff.

When comparing the two Sunshine lists, 2015 and 2016, the number of employees who have left the city also struck me.

The city release states there are 2,235 full-time and part-time employees. But what is the composition of staff and where do they work? How many full-time and part-time contract workers are employed and are they counted in the staff total?

This mismanagement of senior staff salaries, bonuses and taxable benefits has to stop. It is not transparent or accountable.

The people have to act to hold their elected representatives accountable. That means the council must stop conducting the city’s business in closed sessions thwarting the public’s right to know. Finally they must stop making stupid decisions that end up costing citizens its treasure.

The reserves are depleted, the debt is up and too many deals have been made based on potential future revenues such as the Police Headquarters project that is dependent on future development fees.

I hate to use the word “purge” but it applies here based on the evidence of financial mismanagement.

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GuelphSpeaks annual Top losers and winners for 2016

By Gerry Barker

March 12, 2017

It’s time to review 2016 when we look back and pick those events and people who won some and lost some. It was not a great year for our city as political reform is still a bridge too far. No matter what good things happen and there are a number, they are offset by the frequent absence of transparency, accountability and common sense governance at City Hall. Feel free to add or pooh-pooh the picks.

Coming up is the 2016 Sunshine list in a couple of weeks that will reveal all the names of public employees earning more than $100,000 a year. In June the 2016 audited Financial Information Report should be made available to the public on the city website.

First, Here are the losers:

  1. Mayor Cam Guthrie abandoned his promises to reduce property taxes to the equivalent of the Consumer Price Index (CPI). In three budgets over which he has presided, the property taxes approved by council were increased by 10.08 per cent. He, along with eight councillors, voted to approve the 2017 budget.
  1. Waste management and the struggle to unwind costly business practices and losses by the former management of waste control, collection and environmental services. The leadership is gone but citizens remain stuck with the financial fallout. The former internal auditor said the waste management operation was losing $270,000 a year. That flies in the prediction that controlling waste and diverting it from the landfill would be self-liquidating. Help is on the way, (see number 5 in winners).
  1. The hundreds of Canada geese who make their year-round home in Guelph paddling in the rivers and munching on parkland grass. Well, you know the rest of the story when they leave their calling cards. What ever happened to that $50,000 approved by council a couple of years ago to study the goose problem?
  1. Those two councillors, June Hofland and Karl Wettstein, who were members of the GMHI Board of Directors for four years and paid for their service, never said a word about the collapse of GMHI. During a GMHI discussion by council, Wettstein recused himself because he had a “pecuniary interest.” That’s not all he had.
  1. The privately owned Guelph Storm Junior Hockey club successfully extracted $5 million over ten years in a new rental agreement with the city. It effectively ties up the Sleeman Centre for 12 months each year. Under the old agreement, taxpayers were subsidizing the arena by $249,000 a year. Release the details of that contract including revenues, expenses, cost sharing and insurance. Go figure!
  1. To the eight councillors who usually vote as a bloc. They believe in the agenda of the former mayor and perpetuate her theories of a new Guelph. A city with a vibrant downtown, self-liquidating waste management, reduction of carbon emissions and approving high-density development but few single-family homes. Is this what you voted for?
  1. To Coun. Mark MacKinnon goes the annual Chutzpah Award for his assertion that paying taxes is not only an obligation but also a privilege. His rationale was because house prices have increased then people should be prepared to meet their ever-increasing tax bill. Even if it means taking out a second mortgage to pay their taxes. This sounds a little self-serving, isn’t Mark in the mortgage business?

Tah Dah! The Winners:

  1. Those three city councillors, Christine Billings, Dan Gibson and Bob Bell, who had the courage and understood their responsibility to protect the public trust in city government. When the mayor called the vote to approve the 2017 budget, these three Councillors voted no. They deserve your support no matter where you live in the city.
  1. While GS is not a big fan of Coun. Phil Allt, he performed a courageous act donating a kidney to his brother.
  1. The approval of a rationalization of the waste management and environmental services is the right step cleaning up a system that is out of control. Citizens spent $33 million building a compost plant but we cannot even buy the finished composted mulch. It’s sold privately.
  1. The resignation of Chief Administrative Officer Ann Pappert who left May 26 only after she had secured a job as an Assistant Deputy Minister in the Culture Tourism and Sports Ministry. Goodbye, hold the luck.
  1. The unfolding details of the Guelph Municipal Holdings Inc. story of mismanagement, deception and a loss of $26.6 million. There are still many questions about this abortive project that conducted its business in closed sessions led by the former mayor. This is what happens when you operate in an opaque vacuum shutting out public participation.
  1. To former Chief Building Inspector, Bruce Poole, who was fired without cause and sued the city for $1 million for wrongful dismissal. The case broke wide open when, in the process of examination for discovery, Mr. Poole’s lawyer received an external drive from the city Information Technology department that contained 53,000 files, most confidential and unrelated to the case. The city demanded a return of the drive after the story broke in Guelph Today. The result was a rapid mediation of the Poole case that produced a settlement. The outcome remains confidential. Well, I guess this is another case where the city loses another lawsuit. City Solicitor, Donna Jaques, has left for greener pastures joining the exodus of more than 14 senior and upper management employees who have left the city administration in the past 17 months..

 

 

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City staff report places infrastructure bill at $491 million, double recent estimates

By Gerry Barker

March 8, 2017

The city’s Corporate Asset Manager, Daryush Esmaili, told a meeting of council’s Committee of the Whole earlier this week there is $491 million worth of city assets.

The dollar figures only include those assets requiring repair or replacing aging assets including roads, sewer and water services, rinks and technology used at City Hall.

The report broke on Guelph Today Tuesday and was written by Tony Saxon.

Cited by Esmaili as being in “the red zone” with less than 40 years of lifecycle remaining, includes city parking assets, where 72 per cent of those assets have less than 40 per cent of their lifecycle remaining. Other red zone assets include Guelph Transit, information technology and culture and recreation.

The most startling statistic is Esmaili’s projection of keeping up with infrastructure repairs and replacement that will cost the city $125 million a year for the next 100 years.

Last fall, city council approved a 2017 infrastructure budget of $93 million.

Council also approved a special property tax levy of 1 per cent to fund infrastructure. That doesn’t even come close to raising $93 million. But then Coun. Mark MacKinnon moved that the levy of property be increased to two per cent. But the extra one per cent was dedicated to “City Buildings.” The motion passed and Councillors MacKinnon and Karl Wettstein were happy, as more money would be dedicated to the $60 million South End recreation centre.

At the same 2017 budget meeting, council delayed spending $700,000 for new parking meters on Wyndham Street. Instead council would use most of the money to start the architectural planning of the recreation centre in MacKinnon’s and Wettstein’s Ward.

That was a backdoor move to use capital money to fund their pet project.

Those two decisions, made in open council, were, as it has turned out, a monumental error in judgment by a council that had to know what the City Asset Manager and his staff, were working on.

The fall-out is a much needed parking control and added revenue is shelved until next budget. The two per cent property tax levy is halved to accommodate the wishes of the councillors representing Ward Six.

Just for the record, those same supporters of the “City Buildings” levy were told that any pre-contraction planning, estimated to cost $3.5 million, might have to be reviewed and increased because there is lttle hope for the capital spending budget to even think about the south end project. It is particularly important in view of the City Asset Manager’s report on the real cost of infrastructure repair and replacement.

The staff report states that the infrastructure estimates used during the 2017 budget were $259 million, almost half of what the staff is telling us today.

Now, we run a billion dollar corporation like the village idiots who are incapable of making the tough decisions to properly maintain our city and its core systems.

Instead we are trapped in a series of terrible management mistakes ranging from the $34 million police headquarters to the $26.6 million lost by GMHI. Throw in the $23 million paying 50 per cent more for a new city hall, and it’s easy to see that Guelph cannot afford these grandiose schemes any more.

The biggest cost to the city is the overhead costs to run it. Starting with a staff that is bloated and laden with special interest projects that cost money.

Our council, except for a few responsible members, is tone deaf to any criticism. The majority are self-absorbed collection of elected officials. Most of whom are so reliant on staff that much of their judgment is flawed and incompetent.

The loss of management talent, with a few exceptions, has denuded senior staff of key personnel, leaving chaos and mistakes.

The eight-page report by Guelph resident Pat Fung, CPA, CA, that detailed how the city could reduce its overhead but not cut services, was delivered to all councillors and Mr. Fung made a personal presentation to council.

We learned later that council dumped on the report making fun of it after Mr. Fung left the chamber.

Did we elect six-year olds to run our city? Their words and conducting our business behind closed doors would seem to be the case.

October 2018 cannot come soon enough to get the majority of this council out of the civic sandbox.

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Get ready for more shocks from the Provincial Sunshine List published later this month

By Gerry Barker

March 6, 2017

Having waged a campaign to get the city to reveal why those three top managers in 2015 received $98,202 increases, I have received the ultimate cover-up by a city-paid independent agent to say the council acted within the meaning of the Municipal Act.

I complained about this Dec 10, 2015 closed-session council meeting where that was conducted by the closed-session investigator, hired by the city, requesting opening the minutes and the vote of council that approved these increases.

That was more that four months ago.

This was an increase that concerned the non-union staff including CAO Ann Pappert, (37K) DCAO’s Mark Amorosi, (26K) and Derrick Thomson, (33K). Pappert and Amorosi are gone.

The city staff is 80 per cent unionized. That leaves 20 per cent of the remaining staff covered as “non-union staff.”

There is nothing in the Ontario Municipal Act that states that non-union staff compensation does not have to be made public. Ah! But it is, once a year when the Sunshine List is published in March.

You see, the city is required to report these salaries and taxable benefits to the Province to be published every March in the Sunshine List that includes the names, taxable benefits and job title of every publicly paid employee in Ontario.

So why does our council conceal these settlements, knowing full well they will be published every March?

Are they afraid to tell their constituents of the non-union staff increases for fear of political fall-out?

Do they honestly believe that the people will not notice?

They did not inform the public on the city website, nor through the local weekly newspaper that rarely attempts to question the city’s news releases or get two sides of the story.

Last March, I broke the story that revealed the $98,202 increases awarded to the then top managers of the city in the close-session city council. Dec. 10, 2015.

To this day, not one member of council has admitted or confirmed these increases.

On Marck 23, council will receive the report of Amberley Gravel, (A/G) the city-hired closed-session investigator, concerning my request.

This is when members of council should stand up and admit it was a mistake and state the A/G Report should by filed in the circular disposal where it belongs. Even braver councillors should move to fire this outfit that has been on retainer to the city for nine years.

In that time, it has adjudicated only five complaints, all of which supported the right of the city to conduct closed meetings.

In 2007 former Premier Dalton McGuinty mandated that every municipality must have a closed-session investigator on retainer by January 1, 2008. The Liberal government recommended the Association of Municipalities of Ontario, {AMO). This is an organization financed by the provincial government and over the years, several Guelph Councillors have been members.

But some 220 Ontario Municipalities have dumped the private closed-session investigators to have the independent Ontario Ombudsman’s office to assume the responsibilities.

Here is how Guelph citizens are in a bind when it comes to protesting closed sessions by city council who deny public participation.

Our closed-session investigator A/G is only interested in the interpretation of the Municipal Act. It does not investigate why the meeting was conducted or the impact on the public purse. It is nothing but a taxpayer-paid tool for the use of the administration at the expense of the public’s right to know.

Are we not entitled to be informed by our elected representatives of what our managerial class is earning on our behalf?

I am a taxpayer. I am sick and tired of the manipulated flow of information, to which we are entitled, coming from City Hall, or the lack of it.

Even when you question it, you get sued.

Sorry council, I’m not going away and will continue telling the truth about a city administrative staff that is now bereft of talent and is out of control.

Do the mayor and council really believe that those senior staffers who have benefited from the largess of city council and left city employment, really care whether you are re-elected in 2018?

If council’s performance continues the way it has, you can be sure the people will decide the outcome.

 

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Denial continues, aided and abetted by the “independent” closed session investigator

By Gerry Barker

March 3, 2017

You have to be amused when the lonely weekly reportedly quoted a report by the so-called “independent” closed session Investigator, chastising the council for holding its meetings past midnight because it denied public participation

The Investigator, London –based Amberley-Gravel, took four months to come up with t its decision that council acted legally December 10, 2015 when, in closed session, it awarded $98,202 to three of the top executives. Two of the three are no longer employed by the city.

There is still one of three remaining, Derrick Thomson, who, like a Phoenix, has risen from his almost job with another municipality. In the wake of the 2016 provincial Sunshine List revealing in March 2016, the $98,202 2015 increases, he became the Chief Administrative Officer (CAO). His current salary plus taxable benefit is $240,000.

He had the recent distinction of firing one of his colleagues, Deputy Chief Administrative Officer (DCAO), Mark Amorosi, who received a $26,000 increase for his service in 2015 taking his salary to $216,000. The day after firing on February 8, The CAO praised him for his “valuable contributions to the City of Guelph.” Mr. Amorosi had been with the city since 2007. He never explained why Mr. Amorosi was fired. Also, there was no mention of the financial package he received upon leaving.

The CAO also went out of his way to say that Mr. Amorosi would have his legal expenses paid by the city despite being summarily dismissed. He referenced the lawsuit commenced by Mr. Amorosi against me with a claim of $500,000 for alleged defamation.

Would someone explain to me just how that works?

He was apparently fired because he failed to monitor the Information Technology department of which he was responsible. This was because of the 53,000 emails contained in an external drive was sent to former Chief Building Inspector, Bruce Poole’s, lawyer. It was part of an examination for discovery regarding the $1 million lawsuit brought by Mr. Poole for wrongful dismissal.

Now follow closely because events occurred at warp speed

Tony Saxon, columnist in the online Guelph Today, revealed on Friday morning February 3, that the deluge of emails contained all kinds of private information about a large number of people and not related to the Poole case.

This information came from Mr. Poole’s lawyer and Mr. Saxon reported parts of it.

The city went into high operating mode and demanded the lawyer return the drive. It notified the Privacy Commissioner of the error and promised anyone mentioned in the emails would be notified.

That did not occur until a few days later when the Poole case was settled by mediation with the results being confidential. The drive was returned.

Once again, secrecy surrounds the outcome of this chain of events that would display incompetence, sloppiness, abuse of the public trust and yet to be known are further legal expenses by potential aggrieved victims.

In the middle of this, Donna Jaques, the City Solicitor, left her job. The city was forced to hire outside legal counsel to manage the situation.

So the city has no Chief Financial Officer, no City Solicitor. A rookie DCAO, Colleen Clack, was drafted to take over the Corporate Services department that was run by Mr. Amorosi, plus her regular responsibilities as chief of city operations.

The senior management team of CAO Thomson, DCAO’s Scott Stewart and Ms. Clack is running the city that three years ago, had six executive directors running the show.

In fairness, the three top managers have their hands full and it could take months to bolster the top management team. There is talent around but the city’s reputation as being a tough place to work because of the political control and atmosphere makes the recruiting complicated. It’s not a case about the money but the work environment. Losing 12 senior managers in the last two years has not helped the city’s reputation.

I have no confidence that city council will change its reputation or direction. Mayor Guthrie, whom I voted for, has been unable to rein in the spending as he promised. Also he has not been able to convince council to conduct an independent audit along with a staff rationalization.

Mayor took action to disclose the GMHI disaster.

The evidence is there to see that mismanagement of the city continues to spiral down, due to millions lost because of a series of social engineering projects introduced by former Mayor Farbridge. To his credit, Mayor Guthrie did trigger exposure of the Guelph Municipal Holdings/Guelph Hydro financial disaster.

But then he supports the Strategic Options Committee that has no elected officials on it, by agreeing to spend $600,000 to complete it’s work.

Then, he voted to recommend the sale/merger of Guelph Hydro. That 8-5 vote by city council sounded like a rejection, but the comments of councillors negated it because many, including the Mayor, wanted more options.

For another $500,000, we may get a definitive answer: To sell or not to sell, that is the question.

There were five councillors who voted to sell/merge Guelph Hydro. They are the Mayor, Councillors Phil Allt, Mark McKinnon, Karl Wettstein and June Hofland.

By mid-year (whatever that means) the SOC is to report its findings.

Here are some predictions:

First, a lot will depend on how much pressure is brought by citizens on members of council to reject selling or merging the utility.

Next, is the timing of the SOC recommendations following a series of closed session meetings of council. It won’t be in August because council is at the beach. It might be in July when a lot of citizens are watching their lawns and gardens wither from water restrictions or they are on vacation. These could include the members of the SOC.

The only card the administration has is to convince the citizens that they have negotiated this great deal that will flood the coffers of the city with cash.

Wettstein and McKinnon will get their $65 million South End recreation centre.

The Mayor will have a good news story to get re-elected in 2018.

Phil Allt will ask for more options.

June Hofland, well, she will feel vindicated of her role as chair of finance.

Happy days are here again!

And our electricity and water bills will soar under new ownership of Hydro. Water bills go up every year regardless of a diminished use of the stuff. In the summer we can shower but cannot water the lawn when it needs it.

We can’t blame that on Nestle.

 

 

 

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