Yet another bombshell was dropped at the multi-million dollar civil trial between Urbacon Building Group, contractor of the new city hall and the City of Guelph.
City Engineer Murray McCrae testified the decision to fire Urbacon for failure to meet a completion deadline was not made by one person. Instead, he named Mayor Karen Farbridge, former Chief Administration Officer (CAO) Hans Loewig, now retired solicitor Lois Payne, and some unnamed members of council who were involved in the decision.
Obviously, the buck had to stop with Mayor Farbridge.
The city was determined to occupy the new city hall in September 2008. McCrae testified the costs of storage, moving and expiring building leases could see the city losing $15,000 a day.
Another reason given was that Urbacon would take another nine months to renovate the old city hall into a provincial court house. This project was part of the original contract.
Let’s see if we get this straight.
The new city hall was 95 per cent complete. Urbacon has stated that another 60 days would finish the job. Urbacon lawyer Marco Drudi commented that “a two month delay on a two year job is inconsequential.”
Drudi told the court that CAO Loewig sent an email to Urbacon which said he was ”hopeful” that the city would be able to move into the new city hall by early 2009.
The CAO went on to state: “Like you, I’m frustrated but the setback is far from monumental and we have to keep in mind that we are building a long-term legacy and the delays are inconsequential.”
So, who pulled the plug and tossed Urbacon off the job? With the exception of McCrae, of those persons he identified as participating in the decision, one had to make the final decision.
It had to be the Mayor, the top elected official of the city. Who else was qualified? To top it off, none of those named has been called as witnesses in the trial.
The irony is that the city hired Burlington-based Alberici Construction limited to finish the job. That cost or its deadline has never been revealed.
Did the city ever experience losses of $15,000 a day as McCrae testified because of its actions to fire Urbacon before the project was completed? The city’s costs of this nine-week trial will eclipse that predicted loss.
This is another unanswered question for the taxpayers to ponder.
From the day Mayor Farbridge and her 10 supporting councillors took office, this project was doomed. Not only were the changes many but some fundamentally changed the whole project including the decision to upgrade the environmental standards of the building.
The city argued that they sent “change directives” to the contractor that created delays and increased frustration levels. When does a “change directive” become a “change order”?
Two events come to mind. One was the $100,000 retrofit of the green roof demanded by the city. The other was removal of the sound deadening materials throughout the building to save $1 million.
It reminds one of putting seven people in a boardroom to design a horse and they end up with a camel.
It is yet another example of mismanagement by the Farbridge administration.
They are, indeed the gang that can’t shoot straight.
The detailed annual report of the 2012 Organic Waste Processing Facility (OWPF) reveals the actual performance of the operation.
In all it received 17,338 tonnes of which 87 per cent or 15,048 tonnes was mixed organic materials. Some 719 tonnes were composed of brush, leaves and yard waste. Chief source of this feedstock was the City of Guelph and the Region of Waterloo. The report does not breakout the amounts from each supplier.
The record shows that Guelph’s contribution is estimated to be 10,000 tones per year while its agent, Aim Environmental, has contracted with the Region of Waterloo to supply 20,000 tonnes.
On the surface, it would appear there were operational difficulties that prevented reaching the tonnage estimates in 2012.
The 60 page report, prepared by Markham-based consultant Aecon, said the organic facility produced 3,414 tonnes of finished compost. That represented 19.69 per cent of all wet waste treated at the plant.
That composted material was shipped to a farmer (not named) in Atwood, Ontario.
Another 257 tonnes were shipped to the St. Thomas landfill being unsuitable feedstock for plant operations.
The $37 million OWPF is only part of the waste handling centre that includes the main transfer station, plus recycling and sorting of waste for shipment.
The centre received and processed 105,915 tonnes in 2012
That breaks down as follows:
17,338 tonnes or 16 per cent from the OWPF
40,037 tonnes or 38 per cent recyclables, dry materials
8,163 tonnes or 8 percent of brush, leaves and yard waste
40,377 tonnes or 38 per cent processing mixed solid waste, medical waste and contaminated soil
Where the stuff went.
Of the grand total, 48,715 tonnes were shipped to the St. Thomas landfill. Another 105 tonnes were shipped to a Niagara Falls, NY waste facility.
It’s time to question the financials.
In the entire report, that covered a myriad of engineering and environmental data, there was no reference to operating costs of the facility and the adjacent waste management operations. Obviously it was not Aecon’s mandate to analyze the finances.
For example, how much is it costing, per tonne, to keep the OWPF operating? Is there an operational deficit or profit?
What is the Atwood farmer paying for all that compost? And why him?
Was that contract to sell compost tendered? Did facility operator Aim Environmental arrange the sale? Was there a commission paid?
How efficient is the recycling operation in terms of cost and revenue per tonne?
How much does the city have to pay to outside processing facilities to receive almost half of the entire 105,015 tonnes shipped in 2012 to the St. Thomas landfill that is owned by the City of Toronto?
How much is it costing the city to have Aim Environmental manage the OWPF and have the right to sell capacity of the taxpayer-funded plant?
How was the OWPF financed? What are the terms, including term of the loans and interest rates? What are the future projections of costs and revenues of this facility?
Was there ever a business plan developed before the project was undertaken? And if there was, does the facility meet production targets and costs?
Why not share this with the taxpayers? What is the taxpayers’ liability in this multi-million dollar gamble?
The Region of Waterloo contracted to ship 20,000 tonnes to the OWPF but how short were they in 2012?
The irony of this is that the original idea of composting wet waste was created by the former Farbridge administration in 2000. It blew up during the Kate Quarrie administration and was shut down with a major rebuke from the province and the manager was fired.
Along comes Ms. Farbridge re-elected and like Lazarus rising from the dead, sets this grandiose scheme in motion.
Yikes! $52 million later we still don’t know the details of this environmental monument that does not appear to be functioning as predicted.
Testimony this week by city engineer Murray McCrae, at the trial concerning the termination of city hall contractor Urbacon Building Group, reveals that in September 2008, the police were called to remove the builder from the site.
Police cited that Urbacon staff were trespassing and ordered them off the site. Contractor staff hurriedly tossed personal property and documents over an eight-foot fence. Police refused to allow them to return to the site to recover such materials.
That’s one way the Farbridge administration enforced its decision to fire the contractor before completion of the project. The administration was decisive and determined.
Now, let’s move back to summer 2009 when assorted urban terrorists occupied the city-owned Hanlon business park that was under construction. The contractor evacuated the site leaving heavy equipment behind.
The occupiers thumbed their nose at the city and police who stood by and did not force them off city property. They built a campsite including a watchtower to spot intruders. When the park was officially opened with bused-in dignitaries, the masked terrorists cursed and spat and rocked the bus, while police videotaped the melee but made no arrests.
If there ever was a case of trespassing, the Hanlon was it.
But city council, with its Farbridge majority, refused to act. Indeed, former Coun. Mike Salisbury met with the occupiers and offered support of their cause to save the property from destruction of the rare Jefferson salamander. The Ministry of Natural Resources determined the premise to be false. As a footnote: Salisbury was not re-elected in 2010.
And what did that exercise, the failure to enforce the law of trespass, cost taxpayers?
More than $1 million because the project was delayed for a year, the park to this day has only two occupants. The city’s investment is more than $10 million to prepare the site for commercial and industrial development.
These are examples of two unnecessary costs to the taxpayers that city council has bungled. They failed to exploit a project that would bring assessment and jobs to the community.
Number Ten: Spending $25,000 on a Terry Bradshaw video to which nobody responded or cared.
Number Nine: Spending $25,000 to retain a Caledon lawyer to act as Integrity Commissioner to monitor elected councillors’ service.
Number Eight: $5 million to buy three Wyndham street properties for a parking lot on the pretext that the proposed new Downtown Library should have Wyndham street exposure.
Number Seven: Paying Chief Administration Officer Ann Pappert $20,000 to move to Guelph. The question arises, what other senior staffers have received moving and travel bonuses since 2007?
Number Six: Cashing $30 million note owed by Guelph Hydro to help pay for stimulus and other projects. The most curious was spending $750,000 on a new time clock at the Sleeman Centre. That’s infrastructure?
Number Five: Spending $2 million of stimulus money to build special bicycle lanes on Stone Road.
Number Four: Without public consent or participation, spending $52 million on a new wet-waste processing plant and collection system. The irony is that the city has never revealed the operating cost of the plant. Maybe they don’t know? But its agents are selling capacity at $141 a tonne to the Region of Waterloo. Guelph builds a $37 million plant to service other municipalities? What are we? Environmental Mother Teresa’s?
Number Three: Spending some $7 million to narrow Norfolk Street from four lanes to two lanes north of Paisley. Traffic starting north from Waterloo to Woolwich run a gauntlet of which lane to use. Result, vehicles cutting in and out when they discover they are in the wrong lane. Now that’s 2013 transit engineering!
Number Two: Spending $15 million to renovate a derelict convent into a civic museum. If only the 2007 Council had used its noodle and merged the civic museum with the proposed new downtown library, the citizens would have been better served and for a lot less money. And we don’t even own the building.
Number One: To date the costs of the new City Hall and old city hall restoration into a provincial courthouse have not been revealed. The original contractor, Urbacon Building Group was fired, resulting in massive lawsuits involving millions of dollars and five different participants. The trial is now underway and concludes March 28. Judgment will no doubt take time to determine. A clue may lie in a cost- hearing scheduled to be held in October.
The dismal record of the six years of the Mayor Farbridge’s administration is the utter failure to stay on capital budget and manage costs. The city engineer testified during the trial that at a meeting between the city and the contractor, he attempted to cool relations by starting the meeting with a prayer. You get the idea that this was such a colossal blunder that not even God could fix.
As usual, the overburdened taxpayers get to pay the bills, regardless of the outcome and beseeching the Almighty.
There is growing evidence that former premier Dalton McGuinty allowed the provinces’ teachers and public servants to gradually grab a huge slice of the public pie in the seven years of his administration. The result is that Ontario residents are stuck with an overpaid and over-benefited group of public employees. Collectively, they will drain the treasuries of provincial departments, municipalities and school boards for years to come.
And the taxpayers of Ontario are left holding the bag having to fund it.
It is an unworthy event that has already reduced the provincial government’s ability to balance its budget currently with a $12 billion deficit. If not brought under control, the public employee costs will exacerbate the taxpayer’s ability to pay.
The intransigence on the part of the Ontario teachers unions who, despite legislation to stop them from closing down the schools, still participated in job action that impacted negatively on students and parents. It resulted in McGuinty’s exit as premier.
This problem is not unique to the provincial staff. Ontario’s municipal governments must balance their budgets annually. They are experiencing rising costs for staff including gold-plated pensions costs and liability that taxpayers must guarantee … forever. The problem lies in that public servant pension plans are defined, as a guaranteed amount on retirement, indexed to the cost of living.
An example in Guelph is the recent retirement of Police Chief Rob Davis who will enjoy a guaranteed indexed pension of $140,000 per year for the rest of his life. Enter the new chief Brian Larkin who is 57 and could retire at 65 and be eligible for pension. Now we have two former police chiefs on taxpayer-guaranteed pensions for life. A new chief replaces Chief Larkin and he will be eligible at 65 to retire. And so it goes.
The threat is that the Ontario Municipal Employees Retirement plan (OMERS) is actuarially underfunded by $10 billion for 268,000 public employees. Most of Guelph’s civic employees are members of the OMERS retirement plan.
The big problem is that we are living longer. That means that Chief Davis has a potential of living past 85. Chief Larkin now is retired and enjoys the potential of 20 years on pension. Larkin’s successor will have the same opportunity.
Don’t misunderstand. These men have earned their pensions under present rules.
The defined pension for public servants at one time was a major perk because the opinion was that it helped even the benefit field between public and private employees. That is no longer the case with Guelph civic employees enjoying a total of 24 benefits beyond the pensions including free downtown parking.
The situation in Guelph has mushroomed in the past six years as the Farbridge administration approved excessive numbers of staff. Additions that are not justified in terms of the growth of population and assessment. In fact, the city staff in 2012 consumed 89 per cent of the operating budget. That was a 61 percent increase in staff costs since 2006. More than 400 fulltime equivalent staff has been added since 2007, since Mayor Farbridge took command. Compare that to a population growth of just 5.8 per cent in the same timeframe.
The bottom line is that Guelph’s public servants are now doing much better in terms of salaries and wages and benefits than private sector comparable jobs.
Guelph taxpayers are faced with two key problems:
How to stop the growth of staff to limit future liability of employee costs. This calls for a careful, independent study of city operations.
How to slow the exponential growth of capital spending that is creating long-term debt that will take years to pay off.
These are the basic issues underlying the 2014 municipal election that voters will have to seriously consider.
It boils down to whom among us will accept the responsibility of running for council and reforming our city government? These are folks who believe that a balanced council should have members dedicated to provide public services at a reasonable cost. Not grandiose schemes that have polluted the public’s confidence or its ability to pay.
The next council with its work cut out for it, will bring good management practices to the table and open the administration to public access.
It will be like putting Humpty Dumpty back together again.
Not an easy job but a satisfying and beneficial one for all Guelph citizens.
All it took was an outburst by an eager councillor that painted a rosy picture of competence of the city of Guelph’s administration.
It’s Dijon vu, the same mustard as before.
Here are the five steps that paint a picture of mediocrity by a long in the tooth administration that struggles to overcome the litany of bad decisions, sloppy oversight and a dollop of arrogance.
LONGEVITY – No matter how long a government is in power, the act wears thin with the voters. After six years of unchecked spending accompanied by bone-headed decisions, the Farbridge administration is showing its age. Hey! It happens to every government. Eventually they die a natural death to be replaced by new people and new direction. The only exception to that theory that comes to mind is Mississauga where Mayor Hazel McCallion has owned the job for what seems like a hundred years. Rest assured, that will not be Mayor Karen Farbridge’s destiny. So the longer the “gevity”, the death of the government creeps closer. Of course some of it may survive the wrath of the voters but it won’t be the same. Just ask Christine Billings and Gloria Kovach who survived the Farbridge onslaught in 2006. They were the only members of council that fought for the people against the ideological charge of the Farbridge majority.
ARROGANCE – Following the election of 2006, the Farbridge administration decided it had carte blanche control of the city and proceeded to dismantle the senior management by firing the chiefs of administration and finance. It portended sweeping changes that deflected residential and industrial growth, introduced plans to preserve heritage buildings and management of waste, created systems that required hundreds of additional staff. For four years the Mayor’s majority on council did as they pleased with little consultation with the citizens. Meanwhile financial management was barely existent as new people came and went leaving a dysfunctional staff.
ENTITLEMENT – Power corrupts, absolute power corrupts absolutely. Shortly after her election, the Mayor hired a personal public relations person to assist her in managing the job. The position paid $80,000 and was funded by the taxpayers. So the Mayor charges her needs to the taxpayer when she needs her image burnished. In the past six years this attitude of entitlement pervaded the council and senior staff. What made taxpayers vulnerable was that many of the Farbridge majority were rookies having never served on council. They pushed their ideological ideas without due diligence or the ability to pay. It was chaos on a grand scale that went mostly unchecked for the first four-year term. Today, the fallout remains as the city debt has almost doubled and costs of operation sees staff costs representing some 89 per cent of the annual budget.
ILLUSION- When no one knows the truth, it’s easy to get away with lying. This administration is adept at using the tools of propaganda in which the truth gets submerged in manufactured data by the 10-person communications staff. The illusion is manifested on the city website’s “Newsroom” and paid advertising in the Tribune. The cost of this alone exceeds $500.000 annually. The blogosphere is cluttered up with the Mayor and councillors spewing the company line as manufactured in city hall. What’s wrong with that?” one may ask. Most of it is boilerplate, as we in the news business say. And the Tribune unabashedly editorializes on the city operation favouring the administration. The city is run mostly behind closed doors away from the public gaze. Before every council and committee meeting there is a closed meeting to set up the public meeting…even down to which councillor will make a motion and second it during the public session. This is a convenient control method of managing the message. Question: When was the last time Mayor Farbridge held a real press conference? It has not happened in more than six years because she doesn’t want to be exposed to real questioning about her administration.
CHOICES– We are all governed by our choices throughout our life. Most people learn to absorb the lessons of making bad decisions. Alas, many don’t. It’s the same with the City of Guelph council. Among some of the bad choices is the relationship with the University in which the majority of council genuflects and bows to the wishes of the university management Most members of council see the university as a huge economic and cultural benefit to Guelph. And the institution employs three members of council. The school has grown exponentially in the past six years by more than 5,000 undergraduates totaling 22,000 in 2012. The university, largest landowner in the city, pays approximately $1.65 million in lieu of property taxes. But rapid expansion in the past six years has demanded additional taxpayer-funded city services including water, sewage disposal, emergency services, transit and housing development. Compare that to auto parts manufacturer Linamar, that pays regular property taxes for its 22 plants in the city. These boil down to choices and citizens expect their elected officials to look after their interests better.
The recent dust-up regarding the assessment of how well the city is being run by the audit committee, leaves out a massive amount of history that paints quite a different picture.
The belated naming of an internal auditor of city operations and finances after six years, amounts to a miniscule piece of operations under Mayor Karen Farbridge and her loyal cohorts on council.
It’s a lot of smoke and mirrors that paint a glossy picture of management practices in which there are few checks or balances. The audit committee assesses a small portion of current operations but does not dig into the tawdry past of city operations. It examines a recent history including social engineering inflicted schemes and strategies and multi-million dollar capital expenditures that lacked business planning and oversight.
Besides, the audit committee has no say in how the city is being managed it only addresses and reports on current operations as pertaining to budget.
The result is an ever-increasing city debt exacerbated by a huge taxpayer guarantees of city staff pensions for years to come.
The city debt has more than doubled in the past six years. The staff has increased by more than 400, accompanied by increasing salaries and benefit packages. The staff operating costs are 20 per cent higher than neighbouring cities.
Changing the system of waste collection and disposal has cost more than $52 million. Yet, the volume of recyclables sorted in Guelph is steadily dropping following the opening of a new, Waste Management Corporation automated plant in Cambridge.
Yet, the population of Guelph has only increased by 5.8 per cent in five years.
The financial management of Guelph’s $400 million corporation has seen five top financial managers since 2007. The current Chief Financial Officer (CFO) arrived last summer with experience in senior civic management but no formal degree in financial management. Two of his predecessors were fired and both had formal financial training. One hire only lasted a week. Another, an assistant treasurer, acted as CFO for a year until resigning and moving to the Wellington County financial department.
Ask yourself: Is it not essential to have a CFO who possesses academic credentials as well as experience in managing a civic public corporation? Isn’t continuity in this vital position vital to the financial health of the municipality?
Well, we had a good one but he was terminated because he wasn’t ready to accept the Farbridge agenda in 2007. The capable Chief Administration Officer (CAO) was also dumped about the same time. Both the loss of these key executives cost the taxpayers more than $500,000 in severance not including the loss of invaluable experience.
The current CAO has no formal degree in financial management and a civic management track record that lies chiefly in the cultural and social areas. She is currently paid more than $200,000 a year plus perks to oversee the staff. She reports to the mayor.
The real story of Guelph’s current six year history lies in the dodgy social engineering schemes, proliferate hiring of outside consultants and the high cost of litigation.
The most current lawsuit being adjudicated in Brampton is an example of how the Mayor and council choose to gamble with taxpayer’s funds. The case involves the dismissal of contractors of the new city hall, Urbacon Building Group in 2008. Urbacon sued for wrongful dismissal claiming $19 million in damages. The city’s gamble is that it will win including its counter suit of $10 million, plus $4.2 million for paying off the subcontractors, architects plus the legal costs of conducting the city’s case against Urbacon.
On the other hand, the evidence may have the judge conclude that evidence showed Urbacon was dismissed without cause. The city’s downside is massive in this event. First, awarding the $19 million that Urbacon is asking, plus losing the $4.2 million already paid to subcontractors and the legal costs. Hamilton lawyer Derek Schmuck was hired by the city to handle its case. Legal costs will be substantial given the length and preparation for the trial.
This will be a difficult case to adjudicate. Evidence so far indicates that there were many “change directives” coming from the city and the architects. Whether this contributed to the delays in completion remains to be seen.
In 2014, the citizens will have their opportunity to judge the performance of this administration. While it seems a long way off, there is widespread discontent with the leadership of the city today.
As for the role of the new audit committee, that dog is off the porch.
Guelphspeaks is growing in popularity with more comments and expressions of points of view submissions. It is the blog for everyone because it was created never intended to be a one-man operation. The slogan of guelphspeaks is “The blog for the people by the people.” Adding comments is quick and easy and I encourage citizens to send opinion pieces as well.
Guelphspeaks is the blog that offers a platform for free expression and commentary.
The rules are simple: No profanity, no character assassination including personal attacks, no libelous statements and the editor reserves the right to edit for clarity.
Plus a little humour is most welcome.
Today there is a growing concern by citizens of the way their city is being managed. Recent events are pointing to a public distrust of the administration for a number of reasons.
Editor’s note. Mr. Guthrie’s responses are unedited. His comments are countered with comment from the editor of guelphspeaks. We apologize for the length of this posting but believe the material is of importance to all taxpayers in the city.
Will the real Cam Guthrie please stand up?
Posted March 11, 2013
Recently Coun. Cam Guthrie wrote an email to the local weekly that stated: “As chair of the audit committee, I can honestly say this city is being run very, very well.”
Guthrie: I am the chair of audit. Within that role I don’t have the luxury of saying I don’t want to audit something that I might not have agreed with in the first place. It’s my role to see if the right risk management, controls, staff/management responses to our external auditor concerns, proper oversight etc. are being done. Through this lens as chair, I can say that these oversights are being done very well. However, we can always do better.
Guelphspeaks: You and the external auditor may be doing a fine job, but that horse is out of the barn. The two of you have been on the job for less than a year. The spending and manipulation of taxpayer funding for the previous six years was not audited internally. The oversight you describe in your brief job description makes monitoring a $400 million corporation a fulltime not part-time job. Following your election as chairman of the audit committee last September, it could be considered presumptuous that a city has suddenly changed. An ideological majority on counciI has mismanaged the city in six years. Adding a new employee to monitor operations internally, does not change the spots on the leopard.
He later denied that he was interviewed by the reporter and demanded a retraction.
Guthrie: I asked for a retraction/correction of my voting record, which was reported incorrectly, as me voting in favour of last years budget increase when in fact I did not.
Guelphspeaks: You’re missing the point. You claimed as chairman of the audit committee that the “city was being run very, very well.” How would you know? Remembering that the Mayor sits on the committee, you and your committee’s job and Ms. Alonzo is to monitor the spending as it applies to the current budget. The committee ‘s basic function is to make sure the numbers match the budget as approved by council majority. In the past six years, there is evidence it has not been the case.
Now it appears he has joined the Guelph Civic League, stout supporters of all things Farbridge, as the new poster boy on the League’s blog site. His photo and comments lifted from the pages of the local weekly are prominently displayed.
Guthrie: I have not joined anything. You need to be a member of the Guelph Civic League, which I am not and never have been. I have attended a few of their meetings because they put on interesting seminars. I like to hear all points of views because I believe that makes me a better leader.
Guelphspeaks: Well you certainly managed to give that impression considering you deny association with this group. By admitting you have attended a few of their meetings only reinforces the public view that you have joined. It would be wise to tell the League to remove your statements and photo from their blog. They could be breaching the Tribune’s copyright using the material without the paper’s permission. Yeah, like that’s going to happen.
And all it took was being appointed chairman of the audit committee.
Guthrie: I ran for that position, needing to be elected by council as chair of audit. Yes, no one else stepped forward to challenge the post, but it was not an appointment.
Guelphspeaks: Did it ever dawn on you why you were chosen and unapposed? After battling with the Farbridge team for two years, did it not occur to you that your fellow opposition councillors and supporters may wonder which side you bat on?
In the same article, the Mayor praised the formation of the “new” audit committee that now has added the work of the internal auditor. Formerly the audit committee oversaw the mandatory external city audit. It was the shortest meeting of any city committee as they rubberstamped the work of Deloitte Touche, the external auditors.
GuthrieOur new internal auditor is amazing. She really is. Since becoming chair, council has now increased the work, scope and times that we meet throughout the year as I too felt that we needed to be meeting more. Rubber stamping and short meetings are not occurring I can assure you of that.
Guelphspeaks: How many external audits have you reviewed as chairman of the audit committee? I welcome an internal auditor as long as that individual has the scope and power to control spending and operations. Writing about this council for seven years, I’m from Missouri.
Just asking: Does internal auditor Loretta Alonzo report her investigations to the external auditor or to the Chief Financial Officer?
Guthrie: Her mandate, reporting role and terms of reference, (all public documents) state she reports to audit. Her independence is paramount. And as chair, I can tell you that she does exactly that. But please take a look at this link:
Guelphspeaks: This is a basic flaw in city communications. Not every taxpayer accesses the city website. Even when canned information is regurgitated from the city website, it is so slanted that most people don’t bother to enter the “newsroom”. It wasn’t too long ago that the city demanded that all journalists become members of a professional journalist organization before being recognized by city staff. It was done to muzzle fair comment by an individual who was critical of operations. Ms. Alonzo is a city employee and she must report to council who at present is dominated by the Farbridge faction. Independent? Check out what happened to former Chief Financial Officer, Margaret Neubaur.
As an employee of the city, which master does she serve?
Guthrie: She serves at the direction and/or will of the audit committee and then council as a whole.
Guelphspeaks: Cam, you gotta be kidding. You know the Mayor, her majority of cohorts and carefully selected executive directors tightly control the council and staff. The audit committee is a front for this bunch. The Farbridge administration has conducted most of its business behind closed doors and there is a lack of transparency, accountability and clarity. Boy! Have you got your work cut out for you.
It should be noted that the external auditors do not audit spending less than $600,000 as part of their job description. That leaves a lot of spending that is never audited.
Guthrie:The suggestion that “Deloitte does not audit anything under $600,000 for the city” is incorrect. Deloitte (as do most external auditors) use a % random sampling technique based on materiality to focus their audit work. Once the entities are derived through this lens, Deloitte will drill down as far into the accounts and transactions as they feel necessary to satisfy their assessment that the appropriate level of risk and internal controls are in place. There is no threshold for how far Deloitte will go down to complete this assessment to their satisfaction. Any uncorrected adjustments from staff or management could be brought to audit committee. But with the C.A.S (Canadian Auditing Standards) it is practice to only show anything to the audit committee of $300,000 or more. Again, this doesn’t mean they ignore things under $300,000. For example, if they found a $500 bill not correctly noted in the right column, they would take that matter to management to have corrected. Having Deloitte come to the committee and report on all of these (minor) issues would not be a good use of our time. I had a conversation once with our external auditor and in his words “We’ll start at the first dollar and work up from there. Or drill down to the last dollar to make sure it’s correct”.
Guelphspeaks: Well, my information comes from reliable sources. Your response indicates you have sought advice about the methodology of the external audit. Your comment that your one conversation with the external auditor quoting him as, “we’ll start at the first dollar and work up from there. Or drill down to the last dollar to make sure it’s correct.” Those are reassuring words. What did you expect him to say? “Nah, we’re only interested in the big stuff over $300,000.” The standard used to be $300,000 but was increased to $600,000. Regardless, the cost of an externally-generated audit is high and is mandatory to be forwarded to the Ministry of Municipal Affairs. Having said that, why have final audit figures at year-end not carried forward when the next budget is being debated? As chairman of the audit committee, you might want to investigate why the official audit figures of the previous year are altered and usually show increased spending at budget time.
Guelphspeaks, along with other contributors and citizens, has protested some of the most egregious spending by council that falls beneath the $600,000 threshold.
Guthrie: I’m too on record to look out for pennies, because they are the taxpayer’s pennies, not the governments. Being chair of audit I can assure you I’m not dismissing any opportunity to route out and expose any waste, find efficiencies or processes that can impact us positively to make our city run better.
Guelphspeaks: The trouble is that city staff is dysfunctional and fearful. It is generated by senior management who are basically inept at handling staff and treating them with dignity. There is too much waste in operations and too much spending on creating programs that most people don’t want. Hiring consultants and lawyers when not necessary not only negatively impacts the bottom line but also demoralizes and disincentivizes the staff. The city staff is bloated for a city of our size. The long term liability for taxpayers is staff perks and pensions that are way out of line when compared to peer municipalities.
There are reserves that have been raided and are under funded.
Guthrie: Yes, some reserves were raided (which many I voted against) and some are/were under funded. But over the past two years our reserves have steadily been moving upward. I’m hopeful, as I’m sure you are, that this trend continues.
Guelphspeaks: Cam, get real. If you start dredging up previous spending and operational issues, how long do think it will take to be slapped down by council? How many reserve accounts are there and how much is in each. If the city is “run very, very well”, why are reserve accounts being raided or underfunded in the first place?
Money is moved around from account to account to accommodate the administration’s proliferate spending.
Guthrie:I have not seen this, if there is proof of such I would be more than happy to investigate.
Guelphspeaks: You make it appear that you, your committee and the internal auditor are on top of everything. That’s impossible because if previous financial statements are opened up (that will never happen), there will be ample evidence that money was moved around between reserves. Usually it is to accommodate such spontaneous items as the Terry Bradshaw video. Another is how much, over four years, the city invested general account funds in the Loretto convent conversion. Was it to mask the unanticipated costs of converting a crumbling building into a civic museum? The basic problem is the lack of leadership continuity in the city’s financial department. In the past six years there have been five employees acting as Chief Financial Officer. One, the experienced David Kennedy, was terminated, Margaret Neubaur was fired after three years on the job, another lasted a week, Susan Arum left to work at the county after a year and finally last summer Al Horsman was named CFO. Does this look like a city is being very, very well run?
Six years after her election, Mayor, Karen Farbridge decided it’s time to hire an internal auditor. This is a political move designed to make her administration appear it’s looking after business.
Guthrie:An internal auditor should have been hired a long time ago. But we have one now.
Guelphspeaks: Again, it took six years to appoint an internal auditor. Is it too little too late? It appears you and your committee are totally reliant on Ms. Alonzo to monitor and report on irregularities in financial management. Why doesn’t her reporting line go through the Chief Financial Officer, Is he not in charge of over-seeing and managing the city’s finances?
The next question is when does the public hear about the work of Ms. Alonzo?
Guthrie: Ms. Alonzo and I have weekly conversations and/or meetings. She comes forward a minimum of 5 times a year to report to the audit committee. These are public meetings and anyone can come and be a delegate, send in their thoughts to the city clerk or contact me to discuss anything. She has many audits to do this year. This is all outlined in the last audit meeting report that’s available here:
Guelphspeaks: Until you made your “city run well” statement, there weren’t a hundred people in the city who knew they could attend an audit committee meeting. I presume citizens cannot speak, as the new council rules of communication will not even allow visiting councillors to speak at committees of which they are not members.
Guthrie: You and your readers will be pleased to know that at our last meeting, our committee passed a motion (not originally from staff), to have our internal auditor report back to us in April of potential further “value for money” audits. This passed unanimously.
Guelphspeaks: That’s commendable. Perhaps notice of the meeting should be advertised in the Tribune’s city “news” pages so that people may hear the results first hand.
That concludes Coun. Guthrie responses to the guelphspeaks post of March 11, 2013. The counter comments of the councillor’s responses reflect the views of the editor of guelphspeaks.
The best thing Coun. Guthrie can do now is hunker down and hire a public relations expert to guide him through the minefield of press and public relations.
Through all this, we have yet to hear Guthrie apologize for his statements. If he still believes what he said was true, then he hasn’t been on the job long enough to understand what has happened in the past six years to our city. Stating he made a mistake in his characterization of the city being “very, very well run”, will be judged by the electorate in 2014.
The need for water in the city goes without saying. The disposal of wastewater is the most expensive service supplied by the waterworks department. Yet, the rates are pushed up despite the reduction in water usage throughout the city. The city says the higher costs of energy, equipment repair and replacement are the causes. And, Ta Dah! Another cause is the increasing costs of existing as well as new employees “ to meet the needs of our growing community”. Since the city has grown by only 5.8 per cent in the past six years, why are the rates going up, again? Let’s see, water demand decreases but rates keep going up?
Is spending tax dollars on community groups really worth it?
Recently, this council approved spending $225,000 in support of 57 community groups. The original request for 2013 was $540,000 from 71 community groups. Adjudication of the requests was conducted by a review team composed of citizens (not identified) and staff. It was all part of a new community investment strategy according to Barbara Powell, general manager of community engagement and social services. Apparently the city dishes out money without sound follow up to see how the money is spent. This year, events include the Jazz Festival ($15,000), Guelph Contemporary Dance Festival ($11,000), Hillside ($15,000) and the all-time favourite, the Fairy Fest ($5,000), receive civic largess.
Guelph has more per capita Ontario Municipal Board cases than its peers
Since November 8, 2002, figures show that Guelph has 17 OMB cases to face, all involving disputes with the city. While the Region of Waterloo has double the number of cases in the past ten years, its population is 553,300 versus 121,000 for Guelph. On a 4.6 to 1 ratio, Guelph has open cases of 17 compared to Waterloo Regions’ 25 cases. On a per capita basis, Guelph’s outstanding cases are 276 per cent above the ratio of our neighbours. The question remains, why? Our council cannot get along with the county and apparently that extends to dealing with developers. A more recent case comes to mind regarding building two towers of residences for students as Stone Road and Gordon Street. That’s now in the hands of the OMB because the city and the university objected to the plans. Has Guelph earned the reputation of either you go along or you won’t get along?
Standing up to Loblaws
When Loblaws approached the city to remodel its Eramosa store, did anyone on the staff think they finally had some leverage? It is now some nine years since city council approved establishing commercial nodes in the four points of the compass. This included the east-end of the city where there has been substantial residential development. Alas no convenient major grocery store is to be seen. Loblaws owns an attractive piece of property on Watson Road but refuses to build a store. Instead the giant grocery chain wants to take over the old Zellars and enlarge its existing store. That’s not very convenient for those living in the east end. But who said anything about being responsible and fair?
Waste pick-up a definite Whoops!
When an enterprising resident photographed the waste pick-up crew dump organic waste in the back of the truck instead of the designated collection bin, It was met with a ”so what?” comment by senior staff. An editorial in the daily newspaper pointed out the obvious. How does the waste management department continue to make mistakes when it forces the public to pre-sort its garbage with the expectation that it will be collected in accordance with system requirements? Didn’t we just pay some $37 million to convert organic waste into compost plus another $15 million to pick up our waste and dispose of it in the correct sites? Let’s see, we spend $52 million for a system that is depended on guys who don’t know which bin to put it in. Management palming it off as “and error in judgment” is whistling past the graveyard.