The Urbacon affair is an explanation jigsaw with many pieces still missing

Posted September 28, 2014

Mayor Karen Farbridge has published a description in her blog of what happened to cause the city to lose $8.635 million building a new city hall.

But first, let’s review from the beginning what citizens were told about the project.

In June 2006, following extensive study and public input, the Kate Quarrie administration awarded Urbacon Buildings Systems Corp a $42 million contract. It called for building the new city hall and renovating the old city hall into a provincial offences courthouse. The citizens were informed of this decision.

The citizens were not told by the newly elected Farbridge administration in 2007, that the original design would be substantially changed by a series of more than 300 change orders. The nature of these changes were not revealed to the public. Nor were they told about the project completion date extensions, due to to the contract change orders demanded by the city.

The mayor says in her blog: “Council was regularly briefed on the significant risks associated with the inability to secure a completion date,” (of the entire project).

Again, this information was never revealed to the public. In fact, the public was never informed of the project’s progress right up to the firing of Urbacon in September 2008.

The mayor reveals that the administration hired an external legal counsel, experienced in construction contact law, to study and comment on the Urbacon contract. The public has never been given the name of this legal counsel or its recommendation.

But she adds that former Chief Administration Officer, Hans Loewig, “terminated the contract with the builder to gain control over the completion of the project.”

But many questions still remain. Why wasn’t council involved in this major decision? If council was not involved, who was? Is it true that council passed a special bylaw that allowed Hans Loewig to fire Urbacon? And why would that kind of power be vested in an employee? Was the expert legal counsel’s recommendation revealed to council? How much did that advice cost?

In her blog the mayor says “key staff involved with the cancellation of the Urbacon contract are no longer with the city.” She does not explain the four-year contract awarded to Hans Loewig, two months after the Urbacon termination in which his starting salary was $198,000 annually, plus benefits. He was also granted the right to take up to 12 weeks of unpaid leave on top of his regular paid vacation. Draw your own conclusions. It should be noted that Loewig was not a permanent employee at the time of his alleged firing of Urbacon.

There were no details of a settlement in the dispute reported by the media or the city for more than four years. Not until the Urbacon lawsuit trial started in February 2013, did the public start to hear what happened in September 2008. The trial produced several facts over which the city had no control.

The evidence was revealing in what was stated and who was not called to testify. Chief among the missing witnesses was the recently retired CAO Hans Loewig. Keep in mind the mayor now claims that Loewig fired Urbacon. Convenience is the mother of alibis.

Despite not tesifying, an email introduced in evidence and sent in late August 2008 by Loewig to Urbacon, expressed how pleased he was with the progress of the project and looked forward to the official opening in January 2009. The city hall portion of the contract was 95 per cent completed yet Urbacon was ordered off the site September 19th 2008 and the police were called to back-up the order.

Justice Donald MacKenzie ruled the city did not have the right to fire Urbacon and now we know the rest of the story. Or, do we?

There are several outstanding issues that the mayor glosses over: Such as the cost and details of hiring two contruction firms to complete the original contract. Or what were the costs due to Aviva, the bondholder, who the city sued and lost. Or any termination costs of city employees. Or the money spent on paying off the project’s subcontractors.

She stated:“Let me be clear – every dollar of the Urbacon settlement that wasn’t spent on the people of Guelph is a wasted opportunity.” Hello! More details, please.

Despite that explanation the citizens still don’t know who authorized the firing of Urbacon or the total costs. The mayor refuses to accept responsibility, so who’s left?

Ask yourself, should you re-elect a mayor and her council supporters who have orchestrated this multi-million financial disaster without informing the public of their decisions and the fallout for five years?

It remains a deliberate abuse of the public trust by its elected officials.

Think about that when you go to the polls October 27. It’s your only chance to change the way our city has been managed for the past eight years.

The dog must have eaten the Mayor’s homework

Posted September 27, 2014

This election has evolved into two polarized factions: Those who support Mayor Karen Farbridge and her team of elected supporters and those represented by GrassRoots Guelph (GRG) who oppose the policies and management of the city.

There are fundamental differences between the two.

GRG, from the first day of founding in the summer of 2011, emphasized informing and encouraging citizens to vote October 27 to elect a new council.

GRG is the only citizen’s organization that has examined the city’s official financial reports and exposed serious errors. This was performed by a professional financial analyst. It then culminated in a petition to the Ministry of Municipal Affairs and Housing requesting an independent audit of the City of Guelph’s finances and operations.

Ignoring her own staff’s confirmation that the figures and data in the four-page petition were accurate, the Minister, at the time, rejected the request stating it was a local issue and the two parties should resolve their differences.

Nothing has changed and GRG stands by the content of its petition to this day.

Then along came Urbacon. Following a five-week trial in early 2013 between Urbacon Buildings Systems Corp., general contractors for the new city hall, and the City of Guelph who terminated the $42 million contract before completion.

The contractor sued the city for $19.2 million following termination September 19, 2008.

In late March this year, almost six years after the dismissal, Justice Donald MacKenzie found the city wrongfully dismissed Urbacon. In June, the Justice released his reasons for judgment in a scathing, 54-page indictment of mismanagement of the contract by the city.

The city attempted, in a separate trial, to delay the damages portion of the Urbacon trial until after the civic election in October. That was dismissed and reaffirmed the order that the damages portion of the trial must begin October 14.

In mid-September, the city announced a settlement with Urbacon paying $6.635 million. It also revealed its legal expenses were $2.3 million.

Now even if you recently arrived from planet Pluto, you would quickly see that the Farbridge administration made a gigantic mistake, one in which the citizens are paying for.

While the administration and its supporters spin the $8.635 million as not affecting the city’s property taxes, the fact remains that the loss is on the shoulders of the citizens regardless if they own property or not.

The city says the funds will come from reserves, but not specifying which ones. Further they say the reserves will be replenished within five years. Sources? It will come from future revenues including property taxes.

See? It didn’t cause an increase in property taxes at all, right?

But let’s take a look back at how taxes have increased in Guelph since the Farbridge administration has been running the show.

This is a personal experience. We have lived in Guelph for 11 years. In that time our taxes have doubled to just under $7,000. Taking an average cost over 11 years of $5,000 our tax contribution during that period is $55,000.

Because we live on street that is designated as a land condominium, we must pay a private contractor to pick-up our unsorted waste, pay to have our streets plowed in winter and are responsible for the infrastructure of our street including water and sewer pipes feeding into the city system.

But the city does not give credits to property taxpayers for services they do not provide. People who choose this type of housing, end up paying double.

Now let’s compare the property tax rates between the University of Guelph and the 6,400 residences who live in condominiums of different types but are not serviced with waste pick-up, or streets being plowed, or leaves being picked up.

The university is the largest landowner in the city of Guelph. Yet its provincially invoked system of paying property taxes has not changed since 1987. Here’s how it works. The university pays $75 per student in lieu of property taxes. There is an estimated 22,000 students attending so that works out to $1,650,000 per year.

Comparing what our property taxes averaged over 11 years, $55,000, to what the university pays, $825 in the same period reveals there is a huge disparity that favours the university. Historical note: In 1775, they held a tea party in Boston dumping tea in to the bay in protest of taxation without representation.

This unfair system does not include the city-subsidized transit service provided to university students. Or supplying city services to the ever-expanding institution. Or considers the income the university receives from leasing its lands along Stone Road to commercial and residential developments.

Here’s another example. A single, modest industrial operation in the city pays more than $200,000 in property taxes. That’s 12 per cent of the total paid by the university and it’s just one of hundreds of industrial and commercial operations in Guelph that have endured excessive property taxation. Is it any wonder that the city has failed to increase its industrial and commercial assessment from only 16 per cent in eight years?

Taxes are just too high compared to peer municipalities and it discourages development and job creation.

This is the basis of discontent of most of the city residents, especially those on low or fixed incomes facing property taxes that have increased by more than 3.5 per cent annually since the Farbridge administration took over. The argument that properties have increased in value is specious because taxes must be paid annually. Property appreciation doesn’t occur until it’s sold.

Now, two letters in the Mercury from obviously die-hard supporters of Mayor Karen Farbridge, state it’s not her fault or responsibility. In one, the writer says the Urbacon lawsuit was the fault of city staff. The other is a love-in for the Mayor and what a wonderful, accomplished person she is winning all those awards for which she applied.

So now Farbridge supporters are turning on the city staff for losing the Urbacon Lawsuit. Gotta love this line from the letter to the editor: “The Mayor has no responsibility for a mistake made by city staff.” Well, assuming that writer’s statement is correct, if not the mayor and council, doesn’t that just leave the hired hands holding the bag?

Now hold on. Of the city staff, 80 per cent are members of a union. They are the bedrock of financial support for the Farbridge candidates, including the mayor, in the upcoming election.

With that kind of comment, is organized labour going to be less enthusiastic supporting the Mayor and cohorts?

Bottom line? Four more years of Farbridge will result in more of the same abuses of the public trust: More taxes and user fees, special levies for downtown projects, neglect of other parts of the city in order to support downtown development and finally, more secrecy in operating the city.

This time, stay tuned because there are alternatives about to be presented to end these destructive policies.

How the Farbridge supporters are trying to salvage the city’s battered financial record

Posted September 25, 2014

There have been two articles published recently in the Guelph Mercury that demonstrate an abysmal understanding of the facts regarding the Urbacon Buildings Group Corp lawsuit that has cost this city to date, $8.935 million.

Underlying the op-ed page article by Aaron Massecar is the clumsy defence of his leader, Mayor Karen Farbridge. But first, what is a mayor? What are her responsibilities?

Mr. Massecar goes to great lengths to parrot the administration line that the mayor and her council were not responsible for the termination of Urbacon. He says, according to the judgment delivered by Justice Donald MacKenzie, the responsibility fell on Chief Administration Officer, Hans Loewig, and project manager, Murray McRae.

Well, not so fast Massecar. Hans Loewig never testified at the five-week trial. In fact he retired before the trial began. That fiction came from his successor, Ann Pappert, who laid the blame for firing Urbacon on him, allegedly because he had the power to terminate contracts. But canceling a $42 million contract, without the approval of the council who are fiduciarily responsible? Come Massecar, you should acknowledge where the buck stops.

Keep in mind there is more to come with the city facing to pay the costs of the Aviva lawsuit it started and lost. Now the mayor says that judgment of costs will not cause an increase in the tax rate because the money will come from reserves and will be replenished in full within five years.

Just pause for a minute. Where did the reserve funds come from and who will be replenishing the amount removed? It’s coming from the people who pay taxes and user fees that citizens use daily. Yes, the Farbridge administration has even set up water/sewer and Hydro charges as profit centres.

Which brings up the focus of the Farbridge supporters who claim this is not just about taxpayers. Really. Property taxpayers contribute some 46 per cent of all city revenues. They are the stakeholders in this $450 million corporation.

The Farbridge administration, in two terms, has increased property taxes by more than 38 per cent. Going forward, within eight more years, Guelph’s property taxes under a Farbridge administration will double.

On a personal note our property taxes have doubled in 11 years.

There is sufficient evidence Mr. Massecar that there are no snap judgments, just the plain truth. To blame Mayoralty candidate Cam Guthrie, for politicizing the Urbacon affair is wishful thinking. He’s just reflecting what people are saying. Your mayor and her council supporters have yet to accept responsibility for this financial debacle.

So “taxpayers” is a bad word. In a letter to the editor, Darina Griffin writes that pandering to self-worth by calling us (?) taxpayers is exploitive and is a cynical use of the label.

She goes on to state: “That there are no facts that support the notion that our finances are mismanaged.”

You can’t help these people. They are so indoctrinated into believing the Farbridge propaganda distortions that obliterate the truth, lie by omission, and do most of their work behind closed doors.

Let’s try to help them understand what has happened under the Farbridge watch.

The Judge’s detailed 54-page judgment made it very clear that the city wrongfully dismissed Urbacon. The contract was not badly worded as the mayor alleged. The problem lay when there were more than 300 change orders demanded by the city that made the contractor’s completion schedule impossible to meet.

In fact, the city hall project was 95 per cent completed at the time of termination. Further, four weeks before the firing, Hans Loewig sent an email to Urbacon expressing how pleased he was with the progress and looked forward to an official opening in January 2009. This email was introduced as evidence at the five-week trial.

So Mr. Massecar and Ms. Griffin, there is ample evidence that your beloved leader can no longer dodge the responsibility. She is the chief magistrate of the city and must answer for this and other mismanaged events that have proved costly.

Taxpayers are citizens. But not all citizens are property taxpayers. So get over it. Save your rhetoric for the union and other cell meetings. This “we are citizens” campaign smacks of old time labour rhetoric creating class warfare.

It is an attempt to create division among the voters. It’s driven by the unionized employees who represent 80 per cent of all city workers. It is obvious they are supporting the Mayor because they have a lot of skin in the game.

And Ms. Griffin, suggesting that the facts of financial mismanagement are a “notion” only underscores your ignorance of the facts.

But then, you are entitled to your opinion.

Is the new Internet voting system another boo-boo by the Farbridge administration?

Posted September 24, 2014

Well if it didn’t work in this week’s New Brunswick provincial election as advertised, what makes it workable in Guelph?

It seems Dominion Voting Systems Corp. has signed contracts with dozens of Ontario municipalities to use its integrated Internet and manual voting systems.

Yep! Guelph has signed on.

When council voted to introduce Internet voting, the administration songbirds touted it as another progressive step to bring the city in lock step with the growth of technology. Guelph is not alone in signing up with this company. Other cities and towns include Halton, Burlington, Peterborough, Markham, Oshawa, Kingston, Chatham-Kent

The City of Toronto passed on this system in favor of its own Internet voting system for the visually impaired. Do they know something the others don’t?

The Dominion Voting Systems Corp. contract requires two options: To buy online voting services or lease the vote counting machines.

It is not known at this time which option Guelph chose.

The experience in New Brunswick revealed that first, the poll results are called into the returning office where they are manually entered into the system and posted online.

Later on, memory cards from tabulation machines are brought from the polling stations to the returning office The memory card results are uploaded to the provincial website, replacing the results that were entered manually.

The New Brunswick election officials admitted there was “slight discrepancy” between the data from some of the memory cards and the numbers that were entered manually.

It would appear that a “slight discrepancy” is an indication that the system contracted by the City of Guelph is open to human error and the potential of manipulating the vote.

Absent is no apparent checks or balances system to ensure validity of the vote. The Chief Electoral Officer (CEO) for Guelph is recently appointed city clerk, Steve Vincent. He’s been on the job about three months replacing Blair Labelle who was moved to head up the IT (information technology) department.
As this is probably the most important vote in recent memory, the administration must ensure the system operates without error, that all is above board and transparent.

Another important aspect for this CEO is to avoid the debacle in recent elections where certain voters deliberately voted more than once. One student bragged that he voted five times.

On the surface, the Dominion Voting Systems Corp has experienced some glitches that may or may not be the fault of the system purchased by Guelph.

You can be assured that today, there are some very concerned electoral officers in two dozen municipalities across Ontario who signed contracts with this company.

The last thing we need is a contested election based on a breakdown of the voting system and or fraudulent voting.

After all, Guelph has the dubious distinction of being the home of vote fraudster Pierre Poutine in the last federal election.

Our apologies: The Farbridge candidates refuse to play in our sandbox

Posted September 19, 2014

It only took a mere day for the social media to claim that GrassRoots Guelph had a list of candidates to endorse. It was nothing but a fake, a fantasy and fabrication.

Of course, GRG is a political action organization programmed on bringing responsible change to our civic government. The current intent is to continue researching the candidates.

Interestingly, there are 19 nominated candidates supporting the Farbridge regime. At best, only 12 can be elected. Their uncertainty lies in the fact that the mayor is extremely vulnerable chiefly due to the $15 million Urbacon city hall cost overruns. Some of that vulnerability will spray onto her chosen nominees

This includes the four Farbridge incumbents who were part of that decision to fire Urbacon in September 2008. There are two who have chosen not run again, Ian Findlay and Lise Burcher and a former defeated councillor, Mike Salisbury who is running again in ward four. Their irresponsibility led to the lawsuits that found the city wrongfully dismissed Urbacon.

Oh, they say they were not responsible. If not them maybe it was the elusive Mr. Yahoodie

With the complete rejection of the GRG sponsored and neutral ward debates by the 19 Farbridge allied candidates, virtually makes GRG’s gesture to sponsor debates a useless exercise.

It is mindful of Clint Eastwood’s embarrassing address to an empty chair representing President Obama, at the 2012 Republican National Convention. And we know how that turned out.

So GRG will not be holding the ward debates because the Farbridge nominees refuse to participate.

It demonstrates the lengths that the Farbridge nominees will go to discredit the only citizen’s activist group in Guelph whose single purpose is to dislodge the Farbridge regime’s hold on controlling our city.

That means recommending candidates who GRG feels can replace this regime. It is amusing that the Farbridge zealots are spinning the message by publishing the names of presumed GRG candidates.

Perhaps they are afraid, very afraid that if they don’t attack GRG then they would lose.

Even former Farbridge councillor Ian Findlay got into the tirade tweeting that the Fake GRG list failed to have any women candidates. We’re pleased to see he is not running again. He was another on the fateful Urbacon 2008 council. His other misguided effort was his tireless defence of saving the Wilson Farmhouse. As a reminder: Leanne Piper, Lise Burcher, Todd Dennis, Karl Wettstein, June Hoffland and Maggie Laidlaw supported saving the derelict farmhouse. Result: They were outvoted and it’s finally demolished after more than a year wasting council’s and staff time.

Well, if our research and polls done by other organizations are any indication, there is going to be a major shift by the electorate October 27 as the Farbridge bloc faces demotion.

Remember the Urbacon.

Farbridge candidates boycott GrassRoots sponsored ward debates

Posted September 17, 2014

GrassRoots Guelph (GRG) has been informed that most candidates supporting the Farbridge regime are refusing to take part in debates to be held in each ward and sponsored by GRG.

This collective decision only points to the existing paranoia being expressed through the social media by the 19 candidates nominated for the 12 council seats and supporting the Farbridge administration.

The most pointed attacks are coming from the five Farbridge incumbents seeking re-election and their surrogates plus two former Farbridge coucillors attempting to return to the job. Guelphspeaks has identified six candidates as being on the council in 2008 when Urbacon Buildings Group Corp, the city hall contractor, was kicked off the job.

What citizens have yet to be told is who made the decision to fire Urbacon? Evidence during the five-week trial showed that council was given regular updates of the progress of the project. So it is safe to suggest that council were aware of what was going on.

Assuming the premise, why didn’t any of them speak up and question the firing decision before it occurred? Were they convinced, based on the information coming from the city manager in charge of the project, Murray McCrae, CAO Loewig and the architects Moriyama and Teshima, that the project was failing to meet the completion deadline?

During the trial Judge Donald MacKenzie questioned the testimony of Mr. McCrae finding it “ contradictory.”

It is the weakness of Farbridge’s council that has controlled this city for eight years. That is, a failure to carry out their individual mandate of representing the people and maintaining the public trust.

This attitude of arrogance and dismissal of the public interest is still being played out today as the six Farbridge loyalists are seeking a third term.

Judge for yourself if you feel they deserve re-election.

Chief Administrative Officer (CAO), Ann Pappert, stated following the decision by the court, that the city wrongfully dismissed Urbacon and she placed the responsibility on former CAO Hans Loewig. She further said he acted alone and had the power to do so through a special CAO bylaw that permitted him to cancel any contract.
For his efforts, Loewig was working as a contract employee and was awarded full- time employment shortly after the firing. His reward included a four-year contract with starting pay of $198,000 plus an unusual benefit that allowed him to take up to 12 weeks in unpaid vacation plus his regular vacation entitlement. Is this the way to run a $400 million corporation?

Mr. Loewig retired in November 2012. He never testified during the Urbacon trial nor has publicly spoken of the events of September 19, 2008 in which the Farbridge administration claims he was solely responsible and did the dirty deed.

How convenient. No elected councillor gets his or her hands dirty.

For those Farbridge councillors to run on the premise that they were not responsible is an affront to every elector in the City of Guelph.

They are responsible and should be held accountable.

Is it no wonder that they don’t want to appear at the only set of ward debates that are held in the ward? They don’t want to expose their crumbling weakness that led to this Urbacon $15 million error in judgment.

The Farbridge nominees are facing an aroused electorate who are demanding answers that are truthful and not the lame statements emanating from city hall that the Urbacon defeat will not cost additional taxes.

The answer, friends. is to consider who paid for those reserves about to be raided to pay the judgment? Who pays to replenish those emptied reserves over the next five years?

They must honestly believe that their constituents are terminally stupid.

No wonder they don’t want to turn up.

How the Farbridge administration is destroying the way we want to live

Posted September 15, 2014

In a full-page ad in the Trubune, the Guelph Wellington Development Association (GWDA) disclaims the City of Guelph’s development strategy to intensify new development is at the expense of single-family homes.

In 2013, the city issued just 149 single-family detached building permits, a 33 year low. Yet most residential development approved in recent years has been approving high and low rise multiple-family units including row housing. The administration has encouraged this by offering grants and development charges holidays for up to ten years.

More interesting is the ten-year increase in average home prices from $207,000 to $391,000 or 88 per cent. During the same period, inflation rose by only 17 per cent. The question is, did your salary or wages increase by 17 per cent?

But another factor comes into play. The increase in property taxes has been 38 per cent in the eight years of the Farbridge regime’s management. The conclusion is that while income levels in Guelph have increased less than the 17 per cent inflation, the cost of owning property has more than doubled in the same period. This does not include the exploding cost of water and sewer costs, but also hydro supplied electricity.

Why are single-family detached homes so important to the Guelph economy?

The answer is the 3,200 jobs in the Guelph housing sector that makes it one of the largest collective employers in the city. Despite the eight-year lackluster development actions of the Guelph Chamber of Commerce, it now states it is working with the city to soup up the economy to create more good jobs. But where has the chamber been for the past eight years?

That chamber line has the sycophantic echo of a re-election promise to bring good jobs to Guelph currently being made by Mayor Karen Farbridge.

If the economic policies of the Farbridge administration have been so successful, why hasn’t the ratio of industrial commercial assessment in the city still stuck eight years later at 16 per cent as compared with 84 per cent residential assessment?

It has become alarming that the Farbridge administration is concentrating on eliminating so-called urban sprawl by building multiple family housing in a city that has more greenfield areas available for development than most in Ontario. The administration is doing this despite the basic wish of most Canadians, young and old, to own their own detached home.

A single family home represents the greatest single portion of wealth for its owners. It is the type of housing desired by most Canadians.

This administration doesn’t care as it follows the environmental line to pack people into one-stop enclaves where cars are no longer necessary. The line spoken by Coun. Maggie Laidlaw that in 20 years, there will be no cars or trucks on the streets on Guelph sums up the Farbridge policies. It’s part of the admimistration’s record that has become the “war on cars”.

Perhaps that’s why they built an underpass on Wyndham Street that fails to meet minimum height standards for commercial velicles. It is the only underpass in the city that fails to meet the minimum standard.

The war on cars includes the growing strangulation of vehicular traffic throughout the city. The driven desire to create special lanes for bicycles on major arterial roads has caused many major routes in the city to be squeezed from four lanes to two.

Here’s how it works. In the past few years any major thoroughfare that is repaved suddenly is remarked to allow wider bicycle lanes, a continuous left hand turn lane and a single lane going each way. Recent examples are Downey Road, SilverCreek, and Stevenson. Now the administration is proposing doing the same thing on Wyndham Street to cost $18 million including infrastructure renovation.

The proposal sitting in the weeds is to expropriate land along Speedvale and Woodlawn to incorporate bicycle lanes. These are two of the most travelled east/west routes in the city.

Yet this administration has approved spending $13 million over the next ten years on bicycle lanes.

The economy of the City of Guelph is reliant on growing a diversified housing mix and the movement of commerce by cars and trucks. By shutting down the growth of single family detached homes and spending millions to allow a minority of citizens to use unlicensed vehicles on public roads, borders on irresponsibility by city council.

The vocal bike minority contributes practically nothing to the city economy.

The Farbridge obsession with the prattling of David Suzuki and his doomsday environmental message is not only self-serving but also dangerous to our city.

These are two vital issues that voters in the October 27 civic election should consider. In order to retain power, the Farbridge forces have a total of 19 supportive candidates running for 12 council seats. That’s more than 50 per cent of all council candidates, excluding those running for mayor.

If anyone says that voting in a municipal election is a waste of time had better think twice this time. This opportunity to change comes only every four years.

If you don’t vote, you don’t count.

Special notice: GrassRoots Guelph is hosting a meet the Candidates Barbeque, Thursday, September 18 at the Guelph Golf and Curling club between 5 p.m. and 9 p.m. Tickets are $20 in advance and $25 at the door. All proceeds go toward the six all-candidate debates being held in each ward sponsored by GRG. Call Rena at 519 837 4010 for tickets.

Can this city continue to afford $15 million mistakes?

Posted September 14, 2014

When the Chief Administrative Officer, Ann Pappert, is quoted in the Guelph Tribune that the end-cost of the new city hall and provincial courthouse is $57 million, citizens must now wonder where the truth lies.

The contract for the work was $42,000,000 and awarded to Urbacon Buildings Group Corp in 2006. According to Ms. Pappert, that’s an increase of $15 million, and citizens are now asking what is the cost of those overages?

They might also ask why, in eight years, the two Guelph newspapers failed to investigate the Farbridge administration’s handling of this major project. Neither paper sent a reporter to cover the five-week trial held in Brampton last year. Indeed, Scott Tracey, the Mercury reporter responsible for covering city hall for seven of the Farbridge years is now a candidate in ward four. Could this be some belated form of redemption?

Let’s dig into it.

The project started to fall apart within weeks of the beginning of construction. The newly-elected Farbridge administration wanted changes in the contract to bring environmental standards to a higher level than the original contract.

Contract law states that a 10 per cent change in the original contract price requires a renegotiation of the original agreed price, in this case $42 million. That did not happen. Nor did the city use the provision in the contract to mediate differences.

Instead, after demanding more than 300 changes in the structure, and Urbacon being unable to meet a completion deadline, the city ordered the company off the job site. At that stage, according to testimony at the civil trial, the new city hall was 95 per cent complete. Due to the flood of change orders, work had not started on the renovation of the old city hall. That project was part of the original contract. There was a serious breakdown of communications between the architect, Urbacon and the city.

Following five weeks of testimony, Judge Donald MacKenzie found that the city wrongfully dismissed Urbacon. The contractor had sued the city for $19.2 million.

Recently the city announced it had settled with Urbacon for $6.635 million. It then announced its legal costs being $2.3 million. Still to come is a costs settlement with Aviva, the bonding company the city sued and lost.

So how does one figure where the real project deficit of $15 million went?

Some $8.935 million are current settlement costs. That leaves $6.065 million of unexplained costs.

The city hired two construction companies to complete the Urbacon contract. Those costs have never been revealed by the administration.

Then there are legal costs that the city says cost $2.3 million but does not provide details of the breakdown. For example, how much was paid to Derek Schmuck, the Hamilton Lawyer who acted for the city in two trials? There was the original Urbacon trial. Then the city requested the courts to delay the damages portion of the Urbancon trial until after the October 27th election. They lost on all counts. How much was paid to the lawyer who advised the city to terminate the Urbacon contract?

What were the costs of city staff supporting the city’s cases before the courts?

How much was paid to subcontractors after Urbacon was kicked off the job?

How much were the architects paid to act as overseers and mediators during the construction period?

Is it true that there was an HST charge of 13 percent on the $15 million overages totaling $1.95 million?

What were the costs associated with the creation of Market Square? What were the totals of the donations to create the skating rink and water splash pool? What are the annual operating costs associated with Market Square?

What are the annual operating costs of maintaining the “living wall”in the reception area and green roof on the new city hall?

Citizens will never know the real costs of this abortive project. Because the city administration mingles budgets and accounts to the extent that no one really knows the real costs and probably never will.

It certainly calls for a new management team to clean up the financial mess that has been created by Karen Farbridge and her elected cohorts.

To spin their way out of this situation, the mayor says that this debacle will not cost the taxpayers because the costs will come from reserves and will be replenished in five years.

Tell us again, Madame Mayor, what is the source of funding for your spin on this??

And this bunch is seeking your support on October 27.

Were the transit worker’s settlement costs a miscalculation or misrepresentation?

The following analysis of the Amalgamated Transit Union settlement with Guelph Transit, has been prepared by a contributor to GrassRoots Guelph possessing a background in financial analysis.

Posted September 12, 2014

A recent look at the report on the cost of the Guelph Transit contract renewal found that it is apparent that the numbers looked a little odd.

Using a spreadsheet and looking at the calculations in a more detail, the city is substantially under-reporting the “city’s annual cost of the transit operations increase”.

It has been reported that the total of the “city’s annual cost increase” will be 6.49%, versus the real figure of 8.83%.

The calculation is simple, just look at the cost of the wages for a driver for a quarter before the contract report; and the quarter at the end of the reported four-year period. The basic fallacy in their report
is that they reduced the mid-year increase by one half. This is okay for the first year but it fails to take into account that that increase carries over as an increase for the following and succeeding years.

A smaller error is that the annual increases were just added up, whereas financially, one needs to treat them like compound interest. Yes, you can play a bit of a game with the numbers by annualizing and extrapolating the January 2013 rate and come up with slightly lower figure of 8.57% but it is NOT 6.49%.

So 8.83% versus 6.49% may not seem like all that much, but it is 36% higher!

If the calculations are off that much, it would explain the city’s poor financial position. It could be that the person doing the calculations just failed to recognize the error, although that brings into question the
competence of our financial department since it’s a pretty simple calculation.

Another possibility is that it was done intentionally to paint a rosier pre-election picture. The latter seems to me to be more likely because the calculation is trivial and it was changed on the city website some time on August 6 or 7 (to paint an even rosier and less correct picture).

It’s situations like this that gives citizens great concern about how our city is being managed. It makes most residents really wish that the Ontario Minister of Municipal Affairs and Housing had taken some ownership and conducted the forensic audit as requested by a citizen’s petition prepared in 2013 by GrassRoots Guelph.

It’s not all that important to most people whether the cost increase is 6.49% or 8.83% but it is very important that the city is able to and report its business factually to the strakeholders.

When it smells like a fish, it’s probably a fish

Posted September 11, 2014

Between the Mayor and Chief Administrative Officer Ann Pappert, the city’s spin on the Urbacon disaster grows at warp speed.

Only, according to a report in the Guelph Tribune, the numbers don’t seem to add up. Quel surprise!

The Urbacon settlement is $6.635 million. The city then announced its legal and other costs came to $2.3 million. That totals $8.935 million.

The Trib quotes Pappert as saying “the full deficit to build a new city hall and convert the old one into a courthouse adds up to $8.35 million.” She goes on to say that when legal and settlement costs are added in, the whole project deficit is $8.4 million on a $57 million project.

Seems those numbers don’t add up. If the original contract price signed between the city and Urbacon in 2006 was $42 million, how did Pappert arrive at $57 million?

That represents a real deficit of $15 million, not $8.4 million.

Did something slip out that shouldn’t have made the public prints? Maybe the cost of hiring two construction companies to finish Urbacon’s contract has something to do with it.

When the mayor piously states what great interest she has informing the public of the settlement details, she said, “by releasing more information on the settlement than would typically be provided”.

“We are releasing the amount of the settlement, which is $6.635 million,” she states. “The specific language and details of the settlement remain confidential.”

Who is the mayor protecting? The people who have a right to know or her assumed pristine reputation? Reading the mayor’s mealy-mouthed explanation that the settlement will not cost the citizens any tax increases, is an affront to every citizen in the City of Guelph.

And her sidekick, Ann Pappert, is no better and seems to have trouble adding and subtracting.

What is astonishing to most people is the spinning of the truth coming from the two chief administrators at One Carden Street.

It is shameful that Mayor Farbridge chooses to whitewash this serious multi-million mistake by her council and senior staff. To suggest that it will not impact on property taxpayers because the money will come from reserves, is a specious argument. Of all people, Karen Farbridge should know where the money comes from; it’s from the citizens through taxes and user fees.

What is even more galling is that she is running for office regardless of this costly error in judgment and a host of other mistakes made in the past eight years of her regime.

Her supporters keep talking about all the great things the Mayor has accomplished.

At least there is one outstanding example. She knows how to waste our money.

And yet, she still refuses to accept responsibility for the Urbacon lawsuit outcome.

Does this a person, along with her sycophantic supporters on council deserve re-election?

She is grossly underestimating the people she represents.

They’re mad as hell and aren’t going to take it anymore.