By Gerry Barker
January 30, 2017
We live in a liquid society in which change is constant, unsuspected and starkly inconsistent.
In the past ten years, our city has experienced this. A minority of citizens and their elected representatives has dominated our lives with their visions imposing change in which the vast majority of citizens do not agree.
People are always on the move; they sell and leave, people move here to obtain cheaper housing only to discover their costs are too high. People die, babies are born and businesses come and go. It’s a fluid condition that is constant.
Briefly, here are some of those policies that have failed not only operationally, but with multi-million dollar losses of public funding. The Community Energy Initiative (CEI) is currently holding the record for wasted time and resources. So far, losses by Guelph Municipal Holding Inc. (GMHI), total more than $26 million and is still increasing daily. It was founded and chaired by former mayor Karen Farbridge who created GMHI under the guise of managing city-owned properties including Guelph Hydro.
Keep in mind the taxpayers of Guelph are still responsible for GMHI’s finances.
Let’s just stop there for a moment. Guelph Hydro has an estimated book value of $170 million. Its monthly cash flow from more than 55,000 customers is estimated to be more that $13 million. Of that, Hydro must pay for the power it distributes, staff and overhead.
A few years ago, the former mayor, a member of the Guelph Hydro board of directors, attempted to convince council to merge with Hamilton and St. Catharnies distribution systems. It was one decision her council did not support.
Now Hydro is asking citizens to indicate preferences for selling or keeping the utility. It could be a prelude to selling the utility and using the money to bolster city finances. Wonder if GMHI is transferring that $1.5 million annual dividend to the city’s coffers?
The GMHI effect on city finances looks like, and smells like a gigantic Ponzi scheme in which the shareholders, that’s you and me, are repaid with our own money.
As chair of GMHI and a member of the Hydro board, Ms. Farbridge, with the support of four members of her council serving on the board, transferred the assets of Guelph Hydro to GMHI. Over four years it paid the city $9 million in “dividends.”
It is important to note that the Guelph Hydro Board does not hold public meetings. So the details of transferring Guelph Hydro are not known.
Then Guelph Hydro loaned $65 million to GMHI. When asked, CEO Pankaj Sardana said the money came from investors and did not identify Guelph Hydro or Guelph Hydro Electric Services subsidiary as the contributor. In 2015, that loan appeared on the city’s Financial Information Report as an “impaired asset” valued at $69 million.
Mr. Sardana and former CAO Ann Pappert reported to council May16, 2016 that GMHI
had no financial ability to even pay the interest on the loan. This is a liability, not an asset. It will never be repaid to Guelph Hydro because of the GMHI financial collapse in 2015.
With both Ms. Farbridge and her CAO Ann Pappert gone, there are only two members remaining of the GMHI board who served for four years. Neither Coun. June Hofland or Coun. Karl Wettstein is talking about their participation.
Mr. Sardana said the business plan was flawed and stated that the CEI project, the two district energy nodes (pumps) built in the Sleeman Centre and the Hanlon Business Park, have failed to meet contracted targets and performance. Most of the $8.7 million cost of these pumps has been written off or down.
But no one on Council or the staff is talking about the $65 million loan to GMHI.
All this happened behind closed doors with no public participation or information.
Ms. Farbridge set up a system of conducting council business in closed session. She did the same thing chairing the GMHI board.
Today, little has changed. Mayor Cam Guthrie has a dilemma. He is trying to maintain his base that includes former Farbridge supporters. He talks about reducing overhead but turns around and votes to hire 13 additional employees and level a two per cent property tax levy described as replacing the infrastrcuture. Except half isgoing to “City Buildings.”
He could have said: No.
The evidence shows that her eight years in office was a disaster of the former mayor’s own making as she attempted to change the city regardless of what the people favoured or cared about. Millions were spent and misspent on her agenda.
But her councils were unable to build a new city hall without going over budget by $23 million; could not install public washrooms downtown to meet the needs of visitors and folks out for the evening. In 19 years, her council did not build a new downtown library but spent $5 million for three lots facing on Wyndham Street that are now used for parking cars.
Along comes the planned Wilson Street Parking garage in which there is a pedestrian bridge between the Garage and City Hall. Question? Is this for the use of the public or to serve the staff working in City Hall? And whatever happened to that Canada Revenue charge when the city was offering free parking to its employees but not charging it as a taxable benefit?
It’s time for a new deal
We must work to encourage independent candidates to run in every ward seat. People with common sense who can establish a fresh responsible direction for our city, have business experience and who understand a balance sheet.
They should run on cutting the operational overhead, shutting down those closed session meetings, emphasizing accountability and open government. Past management practices have contributed to the drain of our reserves to balance the books and pay for ten years of mistakes.
We need new ideas, new direction and appeal to the younger demographic who will inherit the future by dealing upfront with the mistakes of the past.
These closed session meetings have to stop. Only those authorized session meetings concerning employee relations (not salary negotiation), public contracts and labour union negotiations.
From personal experience, I asked the city clerk, November 7, to request that the city appointed closed session investigator to open council’s closed session meeting Dec. 10 2015. This was the meeting that approved the $98,202 increases to three top staff executives.
I’m still waiting.