Shake-up of Guelph Municipal Holdings Inc. as mayor becomes chairman

By Gerry Barker

Posted March 9, 2016

The pieces are starting to fall in place regarding that January 25 walkout by five members of council following a closed session of council. You’ll recall that they refused to return to the regular council meeting.

When asked, Coun. Phil Allt said he could not “reveal what occurred.” He later added that the action was taken to “protect the integrity of the corporation and staff.”

Citizens were left wondering what really happened.

It now appears the reason for the closed session was to discuss the future of the Guelph Municipal Holdings Inc. (GMHI). It was another incident of using closed-door meetings to discuss matters that may be politically dangerous.

As guelphspeaks pointed out yesterday, the Ontario Municipal Act, is often used to justify calling a closed meeting. In fact, this has been the trademark of the previous administration in which much of its business was conducted behind closed doors, far from public exposure.

This is known as “controlling the message” and has been abused by councils in the past nine years to the detriment of the public’s interests.

In 2014, GMHI, operating off the municipality’s books, announced a loss of $2.8 million. Then it donated a $1.5 million to the general revenue account of the city of Guelph. The annual report also stated that some $9 million had been sent by GHMI as dividends to the city since the inception of GMHI in 2011. It defies explanation.

GMHI was set up by the previous administration to manage the city’s assets. Mayor Farbridge chaired its first board and the board consisted of city councillors plus two outsiders. The purpose, allegedly, was to buy, sell and create corporate organizations that the city owned or was to own. That’s the asset part and it included Guelph Hydro, the Guelph Junction Railroad and some properties. The crown jewel was Guelph Hydro that services more than 50,000 households and businesses in Guelph and Rockwood.

Yesterday, the city announced sweeping changes to the structure of GMHI.

The previous board was dismissed with the exception of Mayor Cam Guthrie and Coun. Karl Wettstein. Mayor Guthrie became chairman of the new board and Councillors Wettstein and Cathy Downer were named to the board. The city’s Chief Administrative Officer, Ann Pappert, was named interim CEO of GHMI.

“The change reflects this Council’s philosophy about governance. Direct Council oversight of GMHI decisions that affect the City of Guelph will ensure better alignment of City assets, resources and strategic planning,” says Mayor Cam Guthrie.

The intent of these changes is to provide more council oversight of GMHI operations. Now GMHI will report quarterly on operations, including compliance, and financial performance.

On the surface, this appears to be a step to making GMHI more transparent and accountable by reporting to council. The question remains, will its operations still function behind closed doors? There is now ample proof of the abuse of the Municipal Act rules governing closed-door meetings of council. It’s not just happening in Guelph but the Ontario Ombudsman has been given the mandate to investigate closed-door council meetings across the province.

Why is it necessary to even have a GMHI? Its only real source of funding comes from Guelph Hydro. The danger of this is the possibility that Guelph Hydro will pass through the funding it sends to GMHI to its customers. The revelation that $9 million has been sent to the city masquerading as “dividends” from GMHI indicates this operation is a money-losing charade.

It’s interesting that the subsidiary GMHI corporation, Envida, was set up to spend millions of citizen’s dollars to install a geo-thermal heating and cooling network in downtown Guelph and the Hanlon Business Park.

That plan is presumably dead, hopefully.

Council has set an 18-month deadline for reviewing GMHI operations. This whole operation, a signature project, was planned and executed by the previous administration. It remains an example of the self-serving policies of a mayor and council that has cost Guelph’s citizens untold millions in a variety of schemes and projects all in the name of wellbeing, environment and sustainability.

We now know the folly of these policies that left the city with a $23 million unbudgeted overrun cost of the New City Hall. It has left a legacy of costly systems and operations that we are stuck with, supporting a failed attempt to create a new city. Trouble is, that administration also left an aging infrastructure that the staff estimates will cost more than $250 million to fix.

That’s why our operating and capital spending costs are 50 per cent higher than Cambridge and Kitchener. That’s why we pay $28,000 per kilometer for road repairs and the provincial average is $11,000. That’s why an estimated 13 per cent of city households and businesses have to pay private contractors to remove garbage. Yet they still pay for those services through their property taxes.

It remains a legacy of financial mismanagement that citizens will be paying for the next 20 years.

Note: Read more about how the city uses closed-door meetings to conduct the public’s business, posted March 8.

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1 Comment

Filed under Between the Lines

One response to “Shake-up of Guelph Municipal Holdings Inc. as mayor becomes chairman

  1. Tony

    Wholly owned by the City of Guelph, Guelph Municipal Holdings Inc. manages selected City of Guelph assets to support municipal innovation, generate revenue, create jobs and strengthen community prosperity. * taken from Guelph today.

    This is what I want a Town hall about. Explain to me how this is good for Guelph and taxpayers. If you have to hide behind closed doors every time you discuss this then its not very open.
    But I guess the changes towards more open and transparent reporting that have taken place in the last couple days will be taken credit for by Andy Best. Sorry.Cheap shot but at $90,000 a year not really.

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