How an out-of-control city administration is picking you pocket

Posted February 7, 2014

The city has announced it is seeking a chief executive officer to run the shadow holding company know as Guelph Municipal Holding Inc (GMHI) with its chief asset being Guelph Hydro and its subsidiary, Envida Community Energy Inc.

The administration has hired Odgers Berndtson, a headhunting firm with global contacts to find the candidate. The successful candidate will replace the current CEO Guelph chief administration officer, Ann Pappert. The board of directors is entirely composed of the mayor as chairman, her council supporters and two independents known for their loyalty to the mayor.

The question is why does Guelph need another layer of expensive talent to run a holding company with one asset? Guelph Hydro has a management structure that has functioned well for many years. Will someone explain to the citizens why more management is needed?

The holding company, it has been revealed, will manage the latest Farbridge vision of supplying underground thermal heating and cooling to the downtown area.

Even more interesting is the how GMHI is paid a dividend from Guelph Hydro. In 2012, the dividend was $2,900,000 forwarded to the city and swallowed up in general revenues.

It was paid despite a decline in Guelph Hydro’s revenues in 2012.

The bottom line is that it is another sneaky way for citizens to be taxed, every time they turn on the lights, heat the house, heat the water, refrigerate the food and watch television. The same thing is happening when providing water and water treatment services. The alarming trend of increasing water costs to consumers reached 77 per cent from 2007 to 2012. The electricity and water revenues play an important role in propping up the shaky Farbridge vision of turning the city into some kind of environmental wonderland.

This takes money. Lots of it and that’s why there is the constant scramble to find ways to excessively tax people, overcharge user fees and now use two vital services, power and water to pay for it.

Trouble is, the Ontario Municipal Act frowns on municipalities taxing those two vital services, directly or indirectly. The subterfuge of using the municipal holding company to launder the Hydro “dividend” so it does not appear as another tax is egregious and probably unlawful.

So here we have an announcement that hydro rates are going to increase by 42 per cent in the next fours year. The same thing will happen for water rates and property taxes and will continue their upward spiral by as much as 18 per cent during the next four–year term of council.

These are facts with which the electorate will have to face October 27.

Another four years of a Farbridge administration will bury this city financially.

Here’s why: People will not want to live here because of the high property tax rates. In fact, some people may not be able to afford to live here. Industrial and commercial development will not grow because of high taxes, operating fees and a complicated system of obtaining approvals from a dysfunctional city administration.

Throw in the plight of the University of Guelph, a major economic contributor to the city.  The institution’s budget is showing a current deficit of $34 million. This has prompted staff layoffs and cut backs in programs.

On top of that, the university staff pension plan is currently underfunded by $741,300,000 and that is not shown on financial statements. On an ongoing accounting basis the deficit was $484,3000,000 in 2011.  That’s a 65.3 per cent increase in just two years.

The provincially mandated sunshine list revealing those public employees earning more than $100,000, show the University of Guelph had 175 employees on the list in 2002. In 2012, there were 788 employees on the list, a 350 per cent increase.

The same thing is occurring in the city administration where salaries and wages, plus soaring pension costs have created a financial crisis that will have long-range consequences, regardless of who takes over next October. A lot of the damage has been done.

Fixing it will take heroic action on the part of the next elected council. There is a sense of entitlement among many public employees that they deserve endless higher salaries and benefits. And it’s an epidemic that covers public servants across the province.

The Farbridge administration has already demonstrated how to milk the electorate in a variety of ways to fulfill their agenda.

This lame duck bunch, in the final year of its mandate, has abused the public trust and it’s time for them to go.

 

 

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5 Comments

Filed under Between the Lines

5 responses to “How an out-of-control city administration is picking you pocket

  1. Glen N. Tolhurst

    It would appear that once again the old shell game is being played with Guelph taxpayers’ money. It is well known that in the shell game there is a shyster and innumerable suckers who are separated from their hard earned funds. It doesn’t take any stretch of the imagination to label the suckers in this latest round. But wait, is there a “strategic vision” (now that’s a phrase which permeates the corridors of city hall like human green house gas emission byproducts of eating pickled eggs) to hire a minion for a substantial 6 figure salary, sign him/her to a multi-year contract complete with an onerous golden parachute to add another bureaucratic roadblock to transparency? Thus, when the current tax and spend members of councilors are turfed out in the October civic elections,their legacy in the form of the minion is left to implement their aborted vision unless the new council pays an extravagant buyout. For those who haven’t dealt with retained executive headhunters of the type engaged for the CEO search, up to 33% of the first year’s salary and benefits is typically paid when the search begins. Thus, the sucking sound of funds being siphoned from taxpayers has already begun. The lame duck bunch trudges onward with its hand firmly on your wallet. What a legacy!

    • DAVID BIRTWISTLE

      Who exactly are the members of the board of directors of GMHI and how are they selected/appointed/annointed?What is GMHI’s mandate?Does GMHI have a website that provides its “owners/shareholders”(the taxpayers of GUELPH details of its operations/staffing/budget/etc.?
      david.birtwistle@sympatico.ca

  2. Mary Heyens

    Thank you for asking these important questions David Birtwistle. I found this newspaper clipping today: May 11, 2011, Guelph Mercury. Severance packages could cost city more than $1 million
    http://www.guelphmercury.com/news-story/2693266-severance-packages-could-cost-city-more-than-1-million/
    Why does 1% of the population earn the highest wages, benefits and pension while the rest of us stand in line at the Food Bank AFTER we leave work?

  3. geo

    If Guelph brings on another CEO their total compensation should consist of half of Pappert’s salary and benefits since she can not do the job as described by herself.

  4. DAVID BIRTWISTLE

    Ask your councillor what details they are privy to when a new staff member is hired to work for the City and why is the public not made fully aware of the termination benefits of departing staff.Should not contractual arrangements specify that such information will be made public upon hiring or termination-who’s money is it anyway?
    david.birtwistle@sympatico.ca

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