Monthly Archives: April 2014

Brace yourselves for the looming fallout of the Urbacon lawsuit

Posted April 2, 2014

We’ve learned from the announcement of the judge’s ruling, finding for former city hall contractor Urbacon Buildings Group Corp. (plaintiff) and the city’s crude attempt to foist the blame on others.

You will recall that more than a month ago, the Minister of Municipal Affairs and Housing announced she was not prepared to order an audit of the City’s finances and operations. It was prepared and sponsored by GrassRoots Guelph, an independent activist organization.

The triumphant response from the Mayor and CAO was the petition was a “waste of time.” The Minister never said that or inferred it. Nevertheless, the city’s spin machine went into high gear with a childish and unwarranted response.

On Monday, the city’s spin-doctors were at it again blaming the former Kate Quarrie administration for a “poorly worded” contract. Then they claimed the city fired Urbacon in the best interests of the taxpayers.

Really! This administration has rarely placed the best interests of the taxpayers at the top of its priority list.

Instead, when the proverbial stuff hit the fan Monday, the CAO offered the specious argument that failed to address the core issue of competence. The Mayor issued a statement on her blog but did not conduct a press conference and has not commented since.

The ball was tossed to deputy city solicitor, Scott Worsfold, to handle the press and state the city’s position.

Where were the CAO Ann Pappert, CFO Al Horsman, or city solicitor Donna Jaques?

The city’s spin machine entered a no-comment mode as the administration reeled over the lawsuit fallout.

Worsfold gamely released information that further exacerbated the growing doubts about the competence of the administration.

He said the yet to be determined costs that will have to be paid by the city, were not insured as a protective shield because it was considered, at the time, as unnecessary. The case was considered a slam dunk. In short the taxpayer’s interests were once again shuffled to the bottom of the deck.

Then the solicitor said that payment of costs could come from various reserve funds or “the municipality has identified funding sources related to paying damages … would require repayment over an extended period of time.”

Take that to mean the city may have to borrow money to pay the costs.

Next question: How will this impact the capital spending program that includes a new $34 million police headquarters?

For this city council, the chickens have come home to roost. For many years the administration’s spending has been front-running the revenues, i.e. they have been spending more than they have been receiving in the normal course of business.

As it turns out, the city property taxpayer was being soaked with high annual tax increases. In eight years of the Farbridge administration, the increases, compounded, amounted to 32 per cent. This council turned your property into its ATM machine.

This situation was raised in the GrassRoots Guelph petition presented to the Ministry, requesting an audit of the city finances and operations. One of the key problems discovered was the city financial staff’s failure to accurately forecast expenses and revenues.

The Ministry officials sent to interview GRG stated that the petition figures and supporting facts were accurate.

The Urbacon case fallout will reverberate around our community for months.

But the key question remains. It is all about competence, and lack of it, in the highest positions of our city government.

 

 

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An open letter to Guelph Mayor Karen Farbridge

Posted April 2,2014

April 2, 2014

Dear Madame Mayor:

As a follower of your administration for more than seven years, I am appalled over the latest legal set-back by your administration. A judge is holding the city responsible in a $19 million lawsuit brought on by city hall contractor Urbacon. It brings into play a failure of your administration to act in a responsible manner befitting the Chief Magistrate of the City of Guelph.

We now learn this lawsuit not only upheld the Urbacon claim for damages but also was not insured by the city’s insurers to pay for the impending cost. The judge also dismissed the city’s counter-claim of $5 million.

At this point costs of this defeat are unknown. Just estimating the legal costs of the city’s lawyer, Derek Schmuck from Hamilton, will stagger the imagination of most Guelph citizens.

It’s pure fiction to even suggest that your administration’s firing the contractor because he was behind schedule was done on behalf of the taxpayers. In fact, most of the work of your council is performed behind closed doors denying the public the right to even observe, let alone participate.

You have operated chiefly in secret, making deals and approving projects without proper public scrutiny or knowledge.

Accordingly, with respect, the time has come for you to withdraw your nomination and complete your term with dignity, truthfulness and some sense of accomplishment.

The alternative is to face certain defeat at the polls next October.

I want to emphasize that we are only speaking as citizens. My colleagues at GrassRoots Guelph will undoubtedly be commenting on this and other issues in the future.

Madame Mayor, do the right thing for Guelph. Withdraw your name for Mayor.

Do not make another mistake by underestimating the publics’ mood in our city.

Sincerely,

Gerry and Barbara Barker

Citizens

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The blame game, the Mayor fingers the Quarrie administration for the Urbacon lawsuit

Posted April 1, 2014

The finger pointing has started in earnest with Coun. Cam Guthrie attacking the Mayor for bungling the $42 million contract that resulted in the contractor being thrown off the job despite the building being 95 per cent completed.

The contractor, Urbacon, sued for $19 million over wrongful termination of the contract.

This week the judge in the case said the city was guilty of wrongful dismissal. But that’s all he said. The actual judgment and costs of this case are still to come.

Mayor Farbridge writes in her blog that her administration inherited a poorly written contract. The result, the Mayor stated, was a breakdown of communications with missed deadlines and deficiencies accumulated.

To set the record straight, former mayor Kate Quarrie was out of the picture at the time and the responsibility of building the new city hall and renovate the old one for a provincial offences court was Mayor Farbridge’s task.

Evidence at the trial a year ago revealed there were more than 340 change orders thrown at the contractor. Many of the changes involved made the building as environmentally complete as possible.

The trouble was, there appeared to be no city manager in charge of overseeing the project; it was more like a committee. The contractor was faced with not only a flurry of change orders but trying to figure out whom they were dealing with.

The Mayor states now that: “Despite considerable effort, the financial and operational risk to the city simply became unacceptable and our administration believed they had no choice but to take control of the project.”

She admitted they received external legal advice before firing and terminating the firm’s contract. Whoever gave that advice should return the legal fees.

“Because we believed it was in the best interest of the community and the taxpayers.”

Well, that did not turn out the way the city expected. In fact, the litigation expenses are not insured by the city. The eventual costs will fall on the taxpayers.

The mayor’s lame excuses of why the city acted the way it did, shakes the confidence that citizen’s have in her judgment, to fulfill her fiduciary responsibilities to the stakeholders.

She concludes by saying that since 2006 the city has tendered almost 400 capital projects valued at over $300 million and less that two per cent of those tenders, including this one, were sent to litigations.

Here’s what she does not talk about.

How many of those projects had cost over-runs? How many legal cases has the city handled during that period? How much has the city spent on outside lawyers and consultants? How much has been spent firing people?

But Madame Mayor, you lost a biggie this time. The costs of which will be revealed in due course. To suggest now that staff should keep its mouth shut so not to “put the city further at risk,” is a little late and why put it on the staff?

If the mayor is smart, she should cut a deal and close the door. To suggest appealing the judge’s ruling would be an even greater mistake than the one citizens must now endure.

On that September day in 2008, the mayor’s competence and fidelity disappeared under a veil of ideology that ignored the inevitable unintended consequences.

Call it a learning experience.

 

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Now we have 200 city employees earning six-figure salaries but not working in six-figure jobs

Posted April 1, 2014

The full scope of the Sunshine List of those public employees earning more than $100,000 a year has been published by the province. You can see the whole list of names at: www.fin.gov.on.ca/en/publications/salarydisclosure/pssd/. The city finance department produced these figures mandated by the province.

Of the city employees list, the top earner was Chief Administration Officer Ann Pappert who made $214,605.59 in 2013 plus taxable benefits of $6,3217.28. The taxable benefit number seems puzzling given that she received a moving allowance of $20,000 to move from Waterloo to Guelph. Normally the cost of such a short-range move would average $10,000 depending on the size and number of household goods.

She could have had options including rolling the money over to an RRSP if the Canada Revenue Agency would allow her to do it. This would save her being taxed provided she had room in her RRSP account.

If that’s what she did, and it is legal, the taxpayers of Guelph added $20,000 to her retirement accounts and she received a deduction for the extra contribution. That’s a great double header!

You cannot blame Ms. Pappert for this largess. Most members of council approved it. The irony is that of the 12 members of council, who are paid part-time wages annually of $30,000 for work that has morphed into almost a full-time job. Is there something wrong with this picture?

The number of city employees earning more than $100,000 grew from 178 in 2012 to 200 in 2013. That’s a 12.3 per cent increase. Not included were 55 police officers bumping over the $100,000 benchmark

Down the road, the Sunshine list for the University of Guelph spiked at 753 staff, declining from 787 in 2012. Of course the University is facing a $34 million operating budget deficit so austerity measures have contributed to the decrease in Sunshine staff.

But the real wake-up call comes from Gregory Thomas, federal director of the Canadian Taxpayers Federation. “People working outside of government in Real Ontario are scrambling for every dime.” He further stated more and more public workers are working in jobs that do not warrant “six-figure salaries.”

Thomas said that competition for students and staff between universities, hospitals and other public institutions, continually drives up salaries, wages and benefits. “ But they are all funded by the same government, which is funded from taxes and that’s us.”

In Guelph, this process is almost entirely in the hands of senior staff. Then council rubber-stamps their recommendations.

Now we see the administration introducing measures to convince the citizens they are running a tight ship.

Witness the speculation story published in the Mercury that the city would have a $716,000 budget surplus for 2013. It was an unaudited figure. Then the ads in the papers stated the city was operating an open government.

These are calculated moves to present a positive picture of the seven-year train wreck of administration mismanagement, excessive spending, soaring taxes and lies by omission.

As the saying goes: “You can’t put lipstick on a pig.”

FOOTNOTE: GrassRoots Guelph (GRG) is inviting citizens to a special meeting Wednesday April 16 to meet Candice Malcolm, Ontario Executive Director of the Canadian Taxpayers Federation (CTF).

The CTF produced a report last summer about how 20 Ontario cities were controlling their employee costs, particularly the growing number of those earning more than $100,0000 a year. The study showed that Guelph ranked 18th out of 20 managing to keep those costs under control.

The breakfast meeting is being held at the Guelph Country Club on Woodlawn Ave. east of Woolwich St., starting at 7:30 a.m. until 9:30 a.m. Breakfast in included and the charge is $18 in advance of the event or $25 at the door. For additional information contact Rena at 519 837 4010.

Your attendance will not only be informative but you will meet many fellow citizens eager to support GRG.

Hope to see you there.

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