Monthly Archives: June 2016

The high price we are paying for going “Green”

By Gerry Barker

June 30, 2016

Happy Canada Day to all our readers and viewers.

We live in a great country, and I’ve been in enough other countries to make that claim. We are not the greatest but are fortunate to live in an advanced society that is diverse and prosperous. I remain distressed over the Alberta wild fires that almost destroyed Fort McMurray. The David Suzuki enviro commandos will say: “We told you so.”

Here in Guelph, our home and native city, the burden of paying for our very existence is the result of nine years of assets and operations squandered to fulfill the promise of sustainability and doing our bit to reduce the threat of climate change. “Bit” is the operative word here.

The recent revelations of the cost and failure Community Energy Initiative, is but one example of the legacy of former Mayor Karen Farbridge, a disciple of David Suzuki, the multi-millionaire guru of all things environmental. She even had an endorsement from the man in her failed attempt to be re-elected in 2014.

Suzuki’s latest paying job was with the Ontario Government. Premier Wynne brought him in to bolster her whacko Green Plan for Ontario. What got me was the Suzuki commercial sponsored by the Ontario Government. He was shown warning children that they had to stop climate warming.

That was totally inappropriate. The production was lit to show Suzuki, complete with white hair and flowing beard, doing his shtick on saving the world. That’s a great approach; threaten the vulnerable to make a point. This is pure charlatanism, smoke and mirrors, what ever you want to name it, by using children to make your point. And folks we paid for it.

But don’t get me wrong. I am alarmed about climate change. But we can’t fix it in Guelph or in Ontario. This is a world-wide condition that requires all nations to take steps to control carbon emissions.

How low can the Premier Wynne sell her plans to remake Ontario into a world-class example of reducing global warming and electrifying basic transportation? One particular portion of the Wynne Green Plan is that by 2025, if you have two cars, one will be powered by electricity.

But that has a familiar ring about it as that was similar to the Farbridge eight years of trying to change the city into a “world class” social engineered example of environmental management. It includes reduction of waste; sustainable sources of power; squeezing vehicle lanes on major streets to accommodate bicycle lanes.

Also the Farbridge legacy provides a heavy taxpayer subsidy to Guelph Transit; increased the city staff by more than 50 percent in eight years; spent more than $22 million on litigation and employee severances; an estimated $28 million on cost over-runs of city projects.

The project that gave community energy a bad name

And now the most expensive Farbridge inspired plan known as the Community Energy Initiative (CEI) that, so far, has cost taxpayers an estimated $40 million. It involved setting up two district energy plants in the Hanlon Business Park and the Sleeman Centre.

Then her administration folded Guelph Hydro into the mayor’s Guelph Municipal Holdings Inc (GMHI). This set the stage for a new Guelph Hydro subsidiary called Envida Corporation that was used to manage the various schemes to fulfill the Farbridge dream. It was a sustainable energy plan including geo-thermal piping to supply hot water to two new, downtown high-rise apartment buildings built by TriCar.

Since the GMHI plan was announced in 2011, the business of GMHI, Envida, and Guelph Hydro has been conducted behind closed doors. There was no publication of the activities of these various corporate entities except for some glowing annual reports by GMHI.

In 2014, GMHI reported sending a $1,500,000 dividend to the City of Guelph. It also stated that since inception, GMHI has sent some $9 million to the city treasury. What they did with these funds remains a mystery. GMHI also reported in the 2014 annual report that it lost $2.8 million.

The bizarre official reporting on this situation is convoluted and murky due to the intertwing of three corporations and the funding. One thing is certain, there is a $26,637,244 cost as reporteed by GMHI CEO Pankaj Sardana.

This is a major-league scandal that is still unresolved. It remains a shameful exploitation of the public trust and treasure.

So, when all this is going on, city council approves an $110,000 grant to 10 Carden Street to renovate the second floor of the former Akers Furniture building. Yjod is to provide studio space for budding artists etc. To be clear, 10 Carden Street is a self-standing cousin of the Guelph Civic League (GCL) who occupy, Tah Dah! 10 Carden Street. Again it is unclear how this money is to be spent, who is accountable and will there be a building permit issued? Just asking.

Coun. James Gordon was a founder of GCL and now the question arises, did he vote on council to award this grant to an organization to which he remain connected? Did he recuse himself when the vote was held?

It remains another extension of maintaining power by the bloc of seven leftist members of council.

A rapid promotion

Then there is the appointment of Coleen Clack to Deputy Chief Administrative Officer (DCAO) responsible for operations, Guelph Transit and liaison with first responders.

In 2015, as General Manager of Culture Tourism and Community Investment, Ms Clack was making $142,017 plus a taxable benefit of $1,599. The city has not revealed her new salary or benefits as a DCAO.

However, let’s look at the 2015 salaries of Derrick Thomson and Mark Amorosi. Thomson earned $207,544 plus a taxable benefit of $6,472. Amorosi earned $209,629 plus a taxable benefit of $6,472.

Neither of these senior managers live in Guelph. Amorosi lives in Hamilton and has done so since joining the city staff in 2008. Thomson lives In Caledon, where he had accepted a job before being named CAO of the City of Guelph to replace Ann Pappert.

It’s an interesting coincidence that both managers share identical taxable benefits. Are the taxpayers paying these two employees a stipend just for getting to work?

This is another example of the dysfunctional culture that still exists in Guelph. It is one that has cost citizens millions of dollars wasted to meet the demands of a former mayor who was determined to change Guelph in her image.

Well, so far she seems to have succeeded.

If two neighbouring cities, Kitcher and Cambridge, can manage their operational and capital costs more efficiently and costing less than Guelph, what is the problem?

On that happy note, have a great Canada Day and remain hopeful that the House of Guelph will survive with determined and responsible leadership.

 

 

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Why does this council perpetuate what 45 per cent of the voters rejected in 2014?

By Gerry Barker

June 27, 2016

It’s a revelation that two city-owned facilities, managed by the city and used by the public, lose a total of $780,000 a year. Not just in 2013, but also by admission of the former General Manager of Tourism and Culture, Coleen Clack, it has averaged that for the previous four years.

This is a stunning admission by the newly appointed Deputy Chief Administrative Officer (DCAO) of all city operations including infrastructure maintenance and repairs, Guelph Transit and public first responder operations, Police, Fire and EMS.

Now we don’t know Ms Clack. But as a taxpayer and shareholder in our city’s corporation, I find it difficult to understand why Ms. Clack would be promoted to such a senior position without experience or accreditation in managing such a large portfolio and attendant responsibility.

We understand there was urgency in appointing Operations Senior Manager in view of former DCAO of Operations, Derrick Thomson’s, and appointment as the new Chief Administration Officer (CAO).

But why the haste? The city operations won’t cease because of a temporary gap in leadership. There are capable middle managers that are able to keep the city working.

Coleen Clack may be capable of handling the job. I have been told she is an able and good manager.

But wait a minute! If this is true, why under her responsibility as a manager of these two facilities, is the RiverRun Centre losing more than $531,000 and the Sleeman centre losing almost $249,000 every year?

Now that Ms. Clack is in a most senior management position, how can we taxpayers be assured that she can handle the job in view of her past record?

Perhaps the powers making this decision should have put Mark Amorosi in charge of Operations awaiting arrival of the new Chief Financial Officer has been hired.

What we do know is that we don’t mind paying taxes as long as I get value. In 14 years that has not been the case. This is our personal beef about not getting value for our taxes. My wife and I live in a community of 22 homes that is a land condominium corporation.

The City of Guelph does not plow the street in winter, clean the street of winter debris in the spring and fall; does not pick up our garbage, saying we live on a dead end street and the trucks cannot turn around, although the fire department has no such difficulty. As members of a Home Owners Association, we own and are responsible for the infrastructure of the development that includes paying into a reserve fund to replace roads and aging underground water and sewer pipes. The reserves are based on an engineer’s study estimating when the infrastructure needs replacement or maintenance.

Our little community is a self-sustaining village within a city. The rub is that this development was approved by the city and regardless; we must pay taxes for basic services that the city does not supply.

So, for the privilege of living in Guelph, we must be double taxed for basic services.

Seems to us that is reminiscent of the kind of thing that started the American Revolutionary War in 1755 when the citizens, protesting the tax on tea, boarded a ship in Boston Harbour and dumped crates of tea from England into the harbour.

As we said, we don’t mind paying our way but this is a parallel tax grab by a corporation dominated by the political activists who are hungry for revenue.

We can hear the complaints coming that we elected to live here and must accept the responsibility. That’s true but the city has created ghettos of condominiums in which its planners disregarded access to public service vehicles. The number of households affected by these policies is estimated to be more than 6,000. That’s 13 per cent of the total property taxed properties in Guelph.

The misguided war on cars

The previous Farbridge administration developed policies that emphasized restrictions of vehicular traffic on major streets. Often well-travelled major streets were remarked to accommodate bicycle lanes by reducing four lanes for vehicles to two lanes.

In eight years in office, the Farvridge administration permitted new housing in the area bordered by Arkell, Victoria, Clair and Gordon streets. There are few single-family homes in the area but scores of low-rise condos and linked, strip townhouses. The residences are not welcoming to cars or commercial vehicles because of narrow interior roads that prevent street parking and interior connections to major roads. Driveways barely accommodate a full-sized vehicle and there is little visitor parking.

It’s an example of social engineering to create intensified housing in accordance, the administration claimed, was the Ontario “Places to Grow” directive. The administration believed that single-family housing created increased dependence on the automobile. Instead, it spent millions creating bicycle lanes that are used by a small minority of residents in many cases as basic transportation but chiefly not in the winter months.

This same group of cyclists ignores the law that states they cannot ride on sidewalks when those bike lanes disappear on major roads.

These measures contributed to increased property taxes and user fees in Guelph. Today, the city’s legacy of those forced collectivization efforts has forceded the citizenss into a state that reflects major changes in lifestyle. It has been done in the name of reducing carbon emissions and abortive sustainability projects costing millions.

None of this was discussed or approved by the vast majority of citizens save for loyal supporters of the Farbridge administration. These included the civic labour unions that now represent 80 percent of the city staff. Also the remnants of the Guelph Civic League and its successor 10 Carden Street, that is a publicly funded political action organization.

The trouble is Guelph’s operational and capital costs are 50 per cent higher than either Cambridge or Kitchener, due to the excessive spending of the previous administration.

The underlying problem in the city is the culture of entitlement that has grasped not only the minority of leftist citizens who support the social engineering changes but most of the senior staff who are beholden to the previous regime.

It becomes a struggle to change the culture because of the bloc of seven councillors supporters who support and are dependent on the senior staff. For them, it’s business as usual despite replacing the Chief Administrative Officer whose performance over five years led to her resignation.

The cost of financing these projects plus multi-million operating deficits of city- owned facilities is still prevalent among the staff administration that is currently undergoing major senior staff changes.

How the culture is perpetuated

It’s like a game of Whack-a-Mole, when one is whacked down another immediately pops up.

In our view, there are two councillors, June Hofland and Karl Wettstein, who have been deeply involved supporting the former mayor’s policies from the beginning of her mandate in 2007. These policies have squandered the public trust and treasure. Accordingly, as key enablers of these failed costly projects and financial management, both these councillors should resign.

The reason is that collectively, they have failed their responsibility to represent the people by morally abandoning them and forcing an agenda to which the majority of citizens did not agree. This was proven in the 2014 election, in which Cam Guthrie won the citywide mayoralty race by more than 5,000 votes.

Despite that overwhelming victory, the supporters of the former mayor won ward by ward contests in which it allowed victories with a small number of voters in each ward. Ms. Hofland won by only five votes in Ward Three. Mr. Wettstein ran second in Ward Six almost 900 votes behind newcomer Mark MacKinnon.

These two councillors during their four-year involvement on the Community Energy Initiative (CEI) from its active inception in 2011, provides ample proof that they were complicit in initiating and participating in the failed $26, 637,244 loss implementing the project. This figure is the amount presented to Council May 16 by the GMHI Chief Executive Officer and Chief Financial Officer, Pankaj Sardana and then CAO Ann Pappert.

The two councillors had to know what was going on through their membership on the board of directors in Guelph Municipal Holdings Inc (GMHI), the operating corporation running the CEI. They are the only two serving councillors, appointed by the former Mayor, who are still on council

Wettstein has already recused himself from the probe of GMHI by claiming he had a pecuniary interest because he received a stipend for serving of the board. For her part, Ms. Hofland voted against further investigation by council into the GMHI record. Only she and Coun. Mike Salisbury voted against the motion.

Councillors Hofland and Wettstein not only shared responsibility along with the former mayor for the GMHI financial disaster but also are now stonewalling any investigation including an independent forensic audit of the affair.

They have abrogated their responsibility and there is no back door to escape. They must resign.

Do you believe this is corruption at its very worst? Or is it just business as usual?

 

Editor’s note: I’d like to read your opinions of this post. Please use the comment section of the GuelphSpeaks postings page. Your ID is protected.

 

 

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The truth about the failed Community Energy plan and the $26,637,244 cover-up

By Gerry Barker

June 23, 2016

Reading the Thursday edition of the Mercury/Tribune the lead story, written by Doug Hallett, consists of a rewrite of the annual report of the Guelph Municipal Holdings Inc (GMHI) chaired by Mayor Cam Guthrie.

It is the sloppiest, most inaccurate report I’ve read since the story broke about GMHI losing $26,637,244 as reported by former CAO Ann Pappert and GMHI Chief Executive officer and Chief Financial Officer, Pankaj Sardana.

If they didn’t know the facts, who did?

That’s what they signed off on May 16 at a meeting of Council representing the shareholders of GMHI. First, let’s try to follow the manipulations of how the former Farbridge administration covered up its excessive spending of citizen’s money.

The Farbridge administration formed the GMHI in late 2010. The public was told that this off-books corporation was to manage city holdings including Guelph Hydro, the Guelph Junction Railroad and the Eastview methane-recovery generating plant.

Now the picture gets murkier. Guelph Hydro through a subsidiary, Guelph Hydro Electric Services Inc, created a third corporation called Envida Community Energy Corporation.

At this point you have to start following the money.

GMHI was the conduit to fund the ambitious Farbridge sponsored Community Energy Initiative (CEI). It included two planned district energy plants in the Hanlon Business Park and downtown in the Sleeman Centre.

Mr. Sardana told that meeting that GMHI had no equity to support a projected loss of $18 million in so called tax losses. To explain, in a corporation, tax losses are carried as an asset because they may be used to offset future capital gains. But it’s still remains a loss. In addition GMHI owed some $5.3 million for a loan held by the Royal Bank.

So, the Far bridge-controlled GMHI amalgamated Guelph Hydro with GMHI because Hydro was owned by the city. Shortly after, some $23 million was transferred to GMHI from Guelph Hydro.

Now let’s turn to the Tribune’s page one account of the GMHI 2015 annual report.

When asked by Coun. Christine Billings if Envida was a going concern she was told by Mr. Sarsana that inter-company loans are keeping Envida afloat. “Absent that,” he added,” I would say that Envida is not a going concern. He added, “It becomes a going concern because of that parental support.”

So, who is the banker of Envida? GMHI has little or no equity; the City of Guelph that owns the whole CEI Field of Dreams project does not have anything in its budget to support Envida.

The best guess is that Guelph Hydro, (Sardana said it had a good year in 2015), is bankrolling this CEI scheme including propping up Envida. Even if it did work, less that 1,800 households and businesses would benefit out of more than 55,000 in the Guelph and Rockwood service areas.

Wait a minute! Guelph Hydro services are among the highest in the province. Ask yourself, is this what a vital public utility should be doing, gambling on a scheme that may cost millions before Envida turns a profit?

It already has cost $26,637,244 by the admission of Ms. Pappert and Mr. Sardana on May 16.

It is apparent that some $14 million has been spent just to set up the two district natural gas-fired energy plants that have yet to deliver power to the grid. Only a limited number of clients are receiving the benefit of geo-thermal hot and cold water.

In fact, Mr. Sardana has pointed out that the equipment was installed without regard to the minimum thermal customer requirement of 4 million square feet, just to break even. Today, each plant is nowhere near attaining the required thermal customers to become profitable.

The GMHI audited report says on the one hand that Envida lost $750,000 in 2015 due to lower expected revenue from the two district energy plants. But then the GMHI report goes on to state that factoring in the write-downs and write offs, Envida reported a net loss of $9.4 million in 2015.

Try to overcome these losses; Envida has promoted solar energy facilities starting with the Guelph Hydro and Guelph fire department headquarters plus other municipal buildings and fire halls. So here’s how that allegedly works. Envida installs the solar panels on the municipal buildings and then pays a leasing fee for use of the roof.

The GMHI annual report says that 204,000 Kilowatt Hours (KWH) were generated by these solar panels in 2015. I believe that’s a total of 20.4 Megawatts for the entire year. The report switches from KWH to Megawatt Hours.

One part of the report is interesting. Guelph Hydro that 350 private solar installations generated 11,784 megawatts in 2015. The report claims it was enough solar energy to power 1,250 homes for one year. Let’s see, only 350 private solar installations provide enough power for 1,250 homes for a year. Where does all that excess power go? You can’t store the stuff. How does the owner of a solar system get paid to produce excess power into the grid?

Further, what does this enterprise have to do with the district energy operations that have already cost $5.5 million for the Sleeman plant and $8.7 million for the Hanlon plant, just to build? The report fails to explain that but it’s assumed its either a write down or write off on the Envida books.

Then there is the shut down costs of the entire district energy and thermal energy system. Mr. Sardana quoted a figure of some $15.7 million.

The along comes Mayor Cam Guthrie who says: “GMHI and its subsidiaries have much to be proud of.” Tut tut Mr. Mayor, you ended your sentence with a preposition.

The reality is how can the Mayor who is also chairman of the GMHI board, make such an irresponsible assertion? Does he not understand the financials of this abortive social engineering plan?

The negative numbers are there but he merrily skips over the details making such a fatuous statement.

Mr. Guthrie there is nothing of which to be proud in this CEI experiment that has failed in its four-year grip on other people’s money. The former mayor knew the city was unable to finance it, so she used the capital and cash flow of Guelph Hydro to finance it. The complicity of the Guelph Hydro board in this multi-million dollar exercise is incomprehensibe.

The result is the diminished value of Guelph Hydro and its subsidiaries. That’s because of the debt load the utility has assumed that is totally of the city books.

The question remains: How many dollars does it cost to screw in a light bulb? Answer: Apparently, about $40 million and counting.

 

 

 

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Noted on returning Guelph’s administration to common sense and sensibility

By Gerry Barker

June 20, 2016

The rapid changeover of senior management of our city staff indicates that there will be a return to responsible management or will it more of the same?

It is now well established that there have been many instances when public money has been wasted and money-losing operations rampant throughout the city.

Two city icons of sports and the arts, the Sleeman Centre and RiverRun Centre are examples of where your money is being wasted.

Coleen Clack, the new Deputy Chief Administrative Officer, (DCAO), is now in charge of operations, replacing newly minted CAO Derrick Thomson. Ms. Clack was formerly general manager of Culture and Tourism, the department in charge of the two city-owned facilities..

In response to a query by Tim Girouard, July 18, 2014, Ms. Clack said the two city-operated facilities were budgeted to lose $780,801 in 2014. The RiverRun lost $531,440 while the Sleeman lost $249,361. Operational budgets are not available for years 2015 and 2016. Regardless, it now is apparent that these losses, paid by the taxpayers, are the rule and not the exception.

The problem of course, is how long have these two facilities required a substantial subsidy to remain open? The main client of the Sleeman Centre is the privately owned Guelph Storm junior hockey club. There is little attempt by management to utilize the facility that is manned by full-time staff. In fact, the ice is removed for three months in the summer and the staff are either laid off or redeployed to another city position.

The city has not revealed the terms of the Storm contract. One curious aspect learned is that the advertising revenue on the time clock, is retained by the hockey club. The clock was purchased by the city in 2010 based on the demand of the team allegedly to match the facilities in other arenas where the Storm played. The $75,000 new clock replaced a perfectly operating time clock. Further, it was paid out of the 2009 federal/provincial/ municipal infrastructire fund to create jobs after the financial collapse in 2008.

In her reply to Mr. Girouard, Ms. Clack said to track usage of the RiverRun Centre was measured in “event numbers.” She stated that the number of events average over the previous three years averaged 436 per year.

So here’s how that works: One event counts as a single space use for one day. Single space means only one of the two theatres is used. When two theatres are used in a single day, that counts as two events. David Mirvish, where are you when we need you?

That is how the cost of operating the RiverRun Centre is calculated, not revenue collected at the box office. How do these “event” days have any bearing on managing the facility? The basic costs of opening the doors every day, promotion of productions, salaries and benefits, insurance, maintenance, fees and taxes, depreciation and performer’s fees. These are the basic considerations when preparing a budget. Then, how many days are the theatres dark?

Obviously, in four years there has been little change in increasing revenue and reducing costs. It just became too comfortable letting taxpayers to pick up the annual tab of more that $500,000.

In the case of the Sleeman Centre, Ms. Clack says the administration calculated the annual loss as $249,361. She adds that they use 3,000 hours of use as the base for budgeting. Let’s see, there are 8,760 hours in a year. Let’s knock off 2,529 when we all asleep (8 hours a night). That leaves 5,840 hours. When reducing that by the three-month shutdown and statutory holidays, (100 days) we are left with 3.490 hours. That’s a 17.1 per cent overage from the 3,000 hours used by the administration tocalculate the cost of operation..

The question is, was the three months of closing the Sleeman Centre each summer part of the $5.7 million instalationof the District Energy plant to provide power to the grid and heated water via a thermal energy exchange network downtown?

Is this more Farbridge voodoo financial planning?

How this makes sense in preparing the annual budget appears to be accepted by staff and the Farbridge dominated council for at least four years.

Multiply the admitted total annual subsidies to the two facilities by the average of just a four-year span, 2011 to 2014, and it totals $3,123,2014.

By her own admission in July 2014, Ms. Clack revealed these details and did not question why this was the consistent case or what should be done to reduce the annual liability of these two facilities.

In my opinion she was snared in the Farbridge web of wasteful spending, mismanagement and special treatment of the mayor’s friends.

We can only hope that Mr. Thomson, Ms. Clack, Scott Stewart, the new, yet to be named, Chief Financial Officer, and Mark Amorosi start cutting costs to return an open and transparent government to the people.

There are five pillars of change that the new senior management team needs to adapt to return the public trust and fiscal responsibility.

Finance

* Improve budget forecasting; report the city financial status to the citizen’s, quarterly.

* Commence restoring the depleted reserve funds

* Staff to recommend a workable restrained spending budget and stick to it.

* Avoid political influence by certain members of council – always remain neutral.

* Involve the public when planning the budget.

* Streamline financial reports to allow the public to understand the documents.

* Ensure that Council receives a monthly financial statement of city operations.

* Restrict travel and membership expenses.

* The new CFO to have carte blanche to investigate all department budgets.

* The 2017 budget to emphasize updating the city infrastructure.

Governance

* Review procedural bylaws allowing councillors to participate without fear of        retaliation.

* Cancel the Integrity Commissioner’s contract.

* End the council’s closed sessions by only being used for the basic reasons such as union contract bargaining, real estate negotiations, and personnel discipline issues.

Open the city administration to open and transparency of doing the city’s business.

Communications

* Cancel the city advertising in the MercuryTribune with the exception of legal notices.

* Rebuild the city website to make it more accessible and organized to serve the public.

* Reorganize communications to integrate facilitation of the Internet and social media.

* Publish minutes of committee and council meetings within 24 hours on the city web site.

* Set up a graphics and video team to improve citizen comprehension.

* The mayor holds a monthly media conference to comment on city business.

Political

* Council committee to select members of a consultative Mayor’s Citizen roundtable.

* Reset the membership of committees and board memberships of councillors.

* Appoint June Hofland to permanent staff position to coordinate external meetings.

* Hold a ward three bye-election to replace Ms. Hofland.

* Conduct an off-premises council retreat without staff or advisors to resolve differences.

Operations

* Conduct a study of effective manpower use and overtime costs.

* Conduct overviews and cost reduction measures with Guelph Transit management.

* Survey all first responder services on improving efficiency and management.

* Review Service Guelph operations to improve service and citizen needs.

* Open city hall to the public and access to all departments.

With respect, a lot of this will take years not months, to accomplish. The cue is for council to focus on serving the needs of their constituents. This is accomplished by dropping the political baggage that had created a cultural of waste and mismanagement. Worse, it has created a dysfunctional council that the new senior management team will attempt to turn toads into frog’s legs.

We wish them Godspeed.

 

 

 

 

 

 

 

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GuelphSpeaks Weekender 6/18/16

The shifting sands at City Hall

You’d think that Superman played a role in the musical chairs being played at the executive level of City of Guelph administration.

Never has so much evidence of performance revelations piled up by such a few in charge. The blistering condemnation of the former Chief Administrative Officer marked the ending of a failed administration.

But has it?

Derrick Thomson was persuaded to cancel his resignation on his move to the Caledon civic administration at a substantial salary reduction. Instead, he accepted the top staff job in our city. The public now has the right to know the details of his contract including, the term, the salary, a bonus to move from his home in Caledon, and other rules of engagement.

This is not intended to be a criticism of Mr. Thomson. In view of the past five years of the stagnant and gross mismanagement of the city. It includes annual budget overspending totaling some $24 million. Most of us are hopefully expectant of a new order and an open and transparent administration.

It’s not hard to accomplish provided those seven members of council who want to maintain the same methodology of running this city, they had better smell the coffee.

Say goodbye Conrad

When the story broke this week that the Canada Revenue Agency was chasing former Canadian citizen Conrad Black for $12.3 million in back taxes, one has to wonder why is this convicted felon and non-citizen is allowed to stay in Canada? Is this part of our renowned refugee plan?

Black renounced his Canadian citizenship in 2001 when then Prime Minister Jean Chrétien denied citizenship if he was named to the House of Lords and became a British citizen (in order to be eligible). If remembering correctly, he was knighted Lord Black of Cross Harbour.

Of course, that was before the United States Justice Department intervened and charged his Lordship with racketeering, among other things. Citizen Black of Cross Harbour spent six years in a Florida medium security facility as a result.

Following his release, he and his wife, Barbara Amiel, moved back to Canada to their Toronto Bridle Path multi-million dollar mansion with the acquiescence of Prime Minister Stephen Harper.

Conrad recently sold the property to an unknown buyer for $14 million and leased it back for an annual rent of $155,000 for two years. The buyer had to know that Black had mortgaged the property up to $13 million. By the time the taxes and fees are paid, the deal had to be one of Conrad’s worse.

But there will be no tag days for this British couple. They still have considerable interests and investments.

But his Canada visa expires in September. The opportunity for Canada to rid itself of this former Canadian embarrassment, unless he pays the $12.3 million owed the Canada Revenue Agency, in back taxes.

Good-bye, Conrad.

Back to the classroom, Kathleen

Well, our premier announced a cabinet re-shuffles this week that was constituted by the rarified academic cognoscenti influencing her administration. The cabinet titles were changed, enlarging the cabinet to accommodate an executive body of 30 members. It enlarged the cabinet from 27 making it one of the largest in Ontario’s history,

Even the Toronto Star, that bulwark of Liberalism, questioned the change compared to moving the chairs around the deck on the Lusitania … before the torpedo struck the ship in the Irish Sea in 2017.

Da Prem has the lowest rating of any premier in recorded history, okay, maybe either Bob Rae or Mike Harris. And it is justly earned.

The manufacturing base in Ontario has shrunk to record lows. All three of the major automakers have come to the province with their begging bowls to keep the manufacturing plants humming. But hundreds of jobs have been lost as the sector downsized and shipped the jobs outside of Ontario, Alas, the suppliers of parts have not had the support of the Wynne Liberals and the number of those vital jobs keeps dropping.

Look no further than what has happened in Oshawa where the largest auto manufacturing plant in the General Motors stable, AutoPlex, has been reduced to one shift.

The mistakes of the former McGuinty government have been exacerbated by sky-high electricity fees to all Ontarians, our property taxes even the air we breath, the fuel we use, the property we own and the end of our lives.

Kathleen Wynne cannot use a cabinet shuffle to restore the public’s confidence of her stewardship of our province.

In our own backyard, we have endured our MPP, Liz Sandals, as Minister of Education, who condoned giving three teacher unions $1.5 million just to come to the table to negotiate … and not have to account how the money was spent. The Globe and Mail later discovered that more than $27 million was spent on teachers unions when former Education Minister, Kathleen Wynne, was in charge of the portfolio.

Sandals has now been assigned to President of the Treasury Board, Her authority is to rubber stamp the Ministries’ budgets. Is she qualified to perform that task in view of her record at Education?

Do as I say and don’t rock the boat. P.S. Don’t talk.

Trouble in cop-ville

It’s another Kathleen Wynne problem that needs fixing today, not in the future. The provincial administration of police operations comes complete with buggy whips and isinglass curtains in case of the rain. The Police Services Board system of management in Ontario is just not working in the public interest. Why? It works in scre6 and because it cannot dismiss officers for failing to conduct themselves or failing to carry out their sworn duty.

Here’s the problem. In our city there have been instances of police breaking the criminal code, stealing drugs from the evidence room. Shooting of a disturbed man in a crowded emergency department in the Guelph General Hospital.  The police services board has little power to control police oprations.  That rests with the Chief of Police.

Just this week the Chief of Peel police wrote a letter to the chair of the Peel Police Services Board, protesting that at a recent workshop, activists vociferally criticized the Peel Police operations. Their complaints ranged from a failure to have minorities on the force, carding and other alleged offences against minorities. The Chief blamed the chair of the PSB of failing to lose control of the meeting. She also said the police would not attend further workshop.

That is Peel, but this is Guelph.

The Guelph Police Services Board was complicit in jacking up the renovation of Police Headquarters from $13 million to $34 million. That deal was cooked in August 2014 just before the Farbridge administration was unable to approve further capital projects before the October 2014 civic election.

It was the last hurrah by outgoing chief Bryan Larkin who left as chief August 31, just a few days before the decision. He and defeated mayor Karen Farbridge, convinced council to approve the renovation.

This is another example of why the Police Services Act must be reviewed and changed to represent the people and their ability to pay for these services.

There is a long road to restore police services including costs and responsibility to the community in which they serve.

 

 

 

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They flew over the cuckoo’s nest if you believe the four councillors’ lame laments about the staff exodus

By Gerry Barker

June 16, 2016

In a story about Chief Administrative Officer’s (CAO) departure, the local twice-weekly newspaper asked councillors to comment on her departure. The responses reveal the political bias in that only four out of 13 councillors commented.

The four responses of course praised the departing CAO for her dedication and moving the city forward since her appointment in September 2011.

Councillors Cathy Downer, James Gordon and Phil Allt asked rhetorical questions as to why all these senior staffers were leaving the city. Coun. Karl Wettstein sidestepped the exodus question, instead praised Ms. Pappert for her “outstanding contribution.”

James Gordon said, “It will be a real challenge to keep the city’s governance moving forward … until we can provide a climate at city hall that will attract qualified executives as skilled as Ms. Pappert and Mr. Thomson.”

James, it’s not about attracting “qualified executives” when you and six of your colleagues, are party to promoting the discredited policies of the former mayor and her administration. And it isn’t about compensation. Ms. Pappert was one of the highest paid ($257,561) CAO’s in the small city category, (Kingston, Kitchener, Cambridge, Windsor). It boiled down to her failed performance over those years in charge.

So you have to wonder when Coun. Phil Allt blames the staff exodus on big money from “Halton and Toronto and elsewhere, can attract our well trained and seasoned staff, luring them away with more attractive compensation packages and working conditions.”

Well Phil, you hit the nail on the head. It’s all about working conditions and the poisonous culture left over from the previous administration. You, James and Cathy plus other members of the Group of Seven’s progressive caucus, are the enablers of this culture. It continues to plunge the city into deeper debt, destroy the morale of the rank and file workers, betray the public trust by conducting its business behind closed doors.

If you believe that people were lured away because of more money and a more comfortable working place, you’ve been listening to the arguments that Deputy Chief Administrative Officer, (DCAO) Mark Amorosi, keeps floating to the top. Mark is a deep thinker that unfortunately, is concentrated on self-preservation until retirement.

Remember those DCAO’s; Mark Amorosi, Al Horsman, and Derrick Thomson were all given major league increases as well as the CAO. Who decided those increases? Why did Ms. Pappert receive a 17.11 per cent increase December 9, for 2015 when all members of council rejected any increase October 13, two months earlier? Why not ‘fess up now how that vote was conducted and who voted for the CAO increase?

Tell us, Phil, what impact do you think that had on the more than 2,100 city employees whose unions will settle on less that 2 per cent per year? This is a major power outage of staff leaving.

Then there is sad Karl Wettstein who refused to comment of the staff exodus with the throwaway line: “I wish her the very best. I thank her for her outstanding contribution and I will miss her.” That’s like lifting your stick when the puck is passed to you in front of the net.

Councillor June Hofland, is chair of the council finance committee and board member of Guelph Municipal Holdings Inc since 2011. Last February when council approved a third party audit of GMHI, Hofland and Coun. Mike Salisbury voted against it. Either she didn’t understand what was happening with GMHI or she was hiding her role. Ms. Hofland, who, in 2010, was put in charge of city finances, won her seat by just five votes in 2014.

Councillors Leanne Piper, June Hofland and Mike Salisbury did not respond to the newspaper’s request for comment. Along with Coun. Wettstein, they were on city council when some of these fiscally-mismanaged projects were approved between 2010 and 2014. In contrast Coun. Dan Gibson, Mark MacKinnon, Andy Van Hellemond and Mayor Guthrie were not on that 2016 to 2010 council. Two members of the present council, Christine Billings and Bob Bell, did serve on the Farbridge first term but along with Gloria Kovach, were in a minority position.

So while the Group of Seven councilors grope to discover why top people are leaving, they all can just look in the mirror.

On Monday night, June 13, council deferred discussing the staff reports on the Guelph Municipal Holdings Incorporated (GMHI). They already know what’s in the document but pushed the matter down into next month. The excuse was there was an agenda that had other issues that would not allow ample time to discuss the GMHI situation. Chief among them are GMHI issues about who put up the $65 million long-term GMHI loan. What is the collateral, the terms including duration and interest rate?

It is a chilling account of out-of-control spending of the public’s money on a scheme to put Guelph in the forefront of sustainable energy and reduce carbon emissions.

The price tag of this Farbridge-led, self-serving project has already staggered citizens by the financial complexity of the project. The cost of mothballing the two district energy projects to staunch the operational financial bleeding will cost $15.3 million, according to the staff report.

The most disturbing part of a staff report quotes: “The impairment of GMHI investments is $68.3 million.” That’s 46 per cent of all property taxes paid in 2015. It only took less than four years to occur, and who knew what was happening? As it is becoming apparent, quite a few were aware, including certain members of council.

The cost of writing down the Downtown and Hanlon district energy programs: $8.7 million. Tax losses: $7.3 million.

With these details coming to open council, is it any wonder why senior and middle management staffers are leaving Dodge?

This foray into unchartered waters of power sustainability and carbon reduction, without a proper business plan is tantamount to corruption of public policy. The trust of the citizens has been shattered by those ideologues that believe they know better and they had the political power to do it.

So when Councillors Phil Allt and James Gordon suggest the cause of the staff exodus is due to salary competition, they had better re-think their views. Those exiting staffers all bailed for good reason. They looked for another job because they knew what was going on behind those closed doors and didn’t want to be any part of it

As for Coun. Piper, Wettstein, Hofland and Salisbury, their silence on the staff demolition tells the story of abandonment of their sworn duty to faithfully represent the people.

This is no trifling matter that will not go away soon. Guelph’s reputation of managing staff is now out in the open. Until the administration culture changes, the staff crisis will only be solved by major changes in the governance rules that exacerbated the problem.

The power of the office of the CAO of hiring and firing anyone under the rank of the CAO, was wrongly imposed and council must become more involved in restoring the staff confidence.

Part of the change required is to place more power with council in controlling costs and staff management. It’s not just about the CAO but conducting its business in an open and accountable manner.

For new CAO Derrick Thomson, the job ahead can be compared to the captain of the Titanic, struggling to keep his ship afloat. We wish him well.

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Who are these institution investors who loaned $65 million to support the failed Farbridge energy plans?

By Gerry Barker

June 13, 2016

The train wreck that represents former mayor Karen Farbridge’s Community Energy Initiative (CEI), was unanimously approved by city council in April 2007.

There was joy across the city as the newly elected council formed a consortium composed of the city administration, Union Gas, Guelph Hydro, business and industry representatives, University of Guelph, school boards, and the Guelph Chamber of Commerce.

Here are the goals set by the CEI by 2031:

* Use 50 per cent less energy per capita

* Produce 60 per cent less greenhouse gas emissions per capita

*   Encourage and facilitate community-based renewable and alternative energy  systems.

The staff report at the time, said that the CEI would position Guelph among the top energy performers in the world.

The wheels of this ignoble experiment started to come off in 2009 when Guelph Hydro’s subsidiary, Ecotricity Corporation reported a loss of $3,945,000. The report said the loss was due to declining methane gas from the Eastview landfill. An impairment charge of $2.984 million was taken that year.

What is the interpretation of an ”impairment” charge? If the recoverable amount of an investment is less than its carrying value, then the asset is deemed to be impaired. The value must be written down to the recoverable amount. Now most people know that the city must balance its books every year.

But because Ms. Farbridge formed Guelph Municipal Holdings Inc (GMHI) in 2010, as a separate corporation to pursue her dream of energy sustainability and reduction of carbon, the finances went off the city books.

It’s reasonable to assume that with the declining rate of methane gas supply at Eastview that the recoverable amount is fading fast, thereby increasing the impairment.

Let’s dig a little deeper. The problem occurs when the combined assets of GMHI and the renamed Ecotricity to Envida Corporations, are losing, on average since 2007, $1,967,625 a year. When factoring in the aging of these assets and the CEI enterprise, as organized by the Farbridge administration, the CEI becomes a major league loser.

The accountants like using the term ‘impairment” and describe actual losses of operations as “Tax Losses.” It’s still a loss by no other name. The argument that tax losses can be useful to offset future profits and capital gains, in this case it is an actual impossibility. Read on to find out why.

It is calculated that GMHI has an investment impairment of $68.3 million.

GMHI amalgamates with Guelph Hydro

It should be noted that in 2013, GMHI and Guelph Hydro (GHI) were amalgamated. This irrevocably pulled control of Hydro, a corporation with a book value of more than $150 million with a strong monthly cash flow from 55,000 customers, under control of the former mayor and chairperson of GMHI.

This was a little-noticed development that gave impetus and funding to pursue the CEI plan to develop two district energy units at the Sleeman Centre and Hanlon Business Park. These units cost $8.7 million to build. Powered by natural gas, they were linked to the geo-thermal underground water heating system then under contraction.

There were two developments that gave the green light to proceed with the CEI plans. The first, approved May 28, 2012, was a waiver of sending audited financial statements of GMHIL to the city as required under the shareholder’s declaration starting in 2012. But that’s okay, the mayor and four of her councillors were on the GMHI board and could monitor the finances. Surprise! The city council agreed to NOT receive the audited statements.

The second, approved June 28, 2010 by GMHI, was: “The tender process as set out on the city’s Purchasing Policy be waived for energy efficiency and renewable energy generation projects that require access to city-owned lands buildings and rooftops.”

These two developments reinforced the mayor’s determination to proceed with her CEI plans without having to deal with pesky rules that would threaten her plans

In other words, due to a series of operational mistakes that remained unreported, due to the closed-session meetings conducted by GMHI for five years, recovery of this GMHI financing was seriously jeopardized.

To be blunt, this CEI enterprise is a disaster financially with little or no hope of ever becoming remotely viable or an asset of the city. Today, there is no benefit to the public to show for the huge $65 million investment made by the unknown institutional investors. The carrying costs of this loan are probably 2 per cent per year that is $1,300,000. When this is added over slightly less than three years, the debt is now stated as $68.3 million on the GMHI books. Now, add in the growing annual “tax losses” of $1,967 245 of GMHI and Guelph Hydro subsidiary Envida and you don’t have to be an accountant to figure out this is a growing serious financial disaster. It adds up to between debt servicing and so-called tax losses, to some $3,268,245 every year.

Did Guelph Hydro, through its subsidiary, Guelph Hydro Electric Services Inc (GHESI), mortgage the city by more than $65 million due to those institutional investors who provided the money?

Citizens now have a debt created by the former mayor, with the complicity of the board of directors of Guelph Hydro, costing even more millions to wind down the non-performing assets.

Any attempt to keep this failed project alive is just pushing more money down the rabbit hole with no guarantees we’ll ever get our money back.

Even the current Chief Executive Officer and Chief Financial Officer of GMHI, Pankj Sardana, admits the CEI district energy projects, including the thermal energy connections, were poorly planned, managed and should never have been started in the first place without a sound business plan.

Yet, there are still plans being made to continue this charade of incompetence and wasteful spending.

The two who kept their mouths shut

Two councillors who served on the GMHI board since 2011 supported the architect of this financial disaster, former mayor Farbridge. Coun. June Hofland has been chairperson of the city council’s finance committee since 2010. Why did she not act in the public’s interest, to protest the financial gyrations of this operation? Was she not aware, did she not understand what was going on? She was a member of the GMHI board for four years. She also received a stipend for serving on the board.

The other is Coun. Karl Wettstein who also served on the GMHI board. Just last February 29, Wettstein declared a potential pecuniary interest at the time because he served on the GMHI board. The pecuniary interest he was referring to, was the stipend he received for serving on the board. Again why did he and Hofland not blow the whistle on this situation? Their silence in this matter is deafening.

Just to get this straight. If you receive a stipend for serving on a board does that mean you don’t have to speak up when the organization is diving into a disastrous depth of debt and operational failure? Apparently it never entered their minds.

And there were other members of council who were part of the GMHI abortive energy project. Two, former Councilors Todd Dennis and Lise Bircher were not elected or did not run in 2014. Regardless, they did not raise concerns about the borrowed $65 million of public money flowing out the door to maintain Karen Farbridge’s dream of world recognition.

The sick joke about all this is the some $10.5 million that GMHI sent to the city ttreasury through Guelph Hydro over a six-year period. Was it just a book entry on the GMHI balance sheet or did the cash really get transferred? Following the money for that phony claim defies logic. How does a money-losing millions GMHI afford to send an annual dividend of $1,500,000 to the city?

It was all part of the Farbridge plan to make it appear the GMHI was making money, when in fact it was losing millions annually. It also could affect the city’s credit rating that the city needed. Because the GMHI operation was off the books, it did not affect Guelph’s credit rating. It remains all smoke and mirrors.

It’s disturbing how egotism transcends reason particularly when it comes to spending the public’s money.

Most citizens did not benefit from this CEI plan

This was a misguided program that affected a tiny minority of the Guelph populace. It concerned a handful of buildings downtown and a similar number of businesses in the Hanlon Business Park.

It’s safe to say that 98 per cent of Guelph’s households and businesses would not benefit from this multi-million excursion into an ego-driven experiment. It is one that has monumentally failed in planning and execution. Now we all must pay for it.

There exists a huge gap in trust by the public of those members of the council’s Group of Seven caucus that continue to support this boondoggle. Instead, they lament the exodus of management staff, excusing it as staff being lured away by more money and better working conditions. They don’t get it.

There has been a gradual disintegration of staff trust in the controlling majority in council. They know how money has been wasted. Former CFO Al Horsman, got it and left to be the CAO of Ste Sault Marie. He left a $209,000 job as a Deputy Chief Administrative Officer (DCAO). You have to ask yourself, why?

Even Ann Pappert took her leave soon after the report she signed with Pankj Sardana May 16, outlining the disastrous history of CEI was made public. Derrick Thomson, left his job as DCAO of Operations to be closer to home in Caledon, He was rehired to replace her.

This is the classic case of the chickens coming home to roost. The staff exodus of managerial staff is unprecedented but indicative of the staff malaise that has infected city operations since October 2014.

Using the vernacular of the business, Mayor Cam Guthrie was handed a king-sized financially rooted rock by the former mayor and her supporters. This should bring a long overdue political enema. Hopefully it is one that our mayor and council will return civility, consideration and compromise, managerial excellence and, return the city to the people.

Conclusions:

This entire project should be shut down and mothballed. That’s going to carry a large price tag. Also needed is clarification for the loan guarantees to the institutional investors.

Councillors. June Hofland and Karl Wettstein should resign for their failure to carry out their sworn duty to protect the public’s interests. But they’re not worried. GMHI bought director’s liability insurance for them giving them, some insularity from legal action.

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