Monthly Archives: February 2017

Why did the Guthrie administration shut the water off when the house was on fire?

By Gerry Barker

February 27, 2017

Late last week, I finally received a response from the Closed Session Investigator, employed by the city, after almost four months of “investigation.” On November 2, 2016, I requested that the minutes of the closed session council meeting of December 10, 2015 be released to the public.

The reason? That was the meeting in which the public learned four months later, that the top three senior managers of the city had been awarded a total of $98,202 in increases for 2015.

That decision was hidden from the citizens until March 31, 2016 when the provincial Sunshine List of all public employees earning more than $100,000 a year was published.

And there it was. Chief Administrative officer, Ann Pappert, got $37K, Deputy Chief Administrative Officer (DCAO) Derrick Thomson, $33K and DCAO Mark Amorosi, $26K

The city administration currently led by Mayor Cam Guthrie and CAO Derrick Thomson has never publicly acknowledged even paying the increases let alone the rationale.

The conclusion by the special closed session investigator Amberley Gravel, stated: ”That the council did not breach the provisions of the Municipal Act where it went into closed (sic) for consideration of the non union compensation adjustment on December 10 part of the council budget meeting of Dec 9 and 10 2015.”

This five-page report detailed how the Amberley Gravel investigator arrived at this conclusion.

First, the open public discussion of council to approve the 2016 city budget was spread over two days. I know because I covered it both days. During those deliberations, council sandwiched, in a closed session, to approve the non-union compensation isncreases of the three top managers. The details of which were not revealed.

The reason for the closed session as stated in the Municipal Act was s.239(2) (d) was “with respect to labour relations or employee negotiatio

Denying the right to know what we are paying our staff

Do you think this explanation gives council the right to deny the public to know what stakeholders are paying their professional staff?

How long had these labour negotiations with the three senior staffers, occur before that Dec. 10 meeting? In my opinion council, before that meeting, had an excellent grasp of what the three managers were going to receive. All they had to do was vote to approve it and they did it behind closed doors which the Amberley Gravel reports interprets as quite legal under the Municipal Act.

There was no one to protest or comment as for four months the people were unaware. Our society demands that public boards apply the rule of law and ensure checks and balances. City council abandoned this responsibility and acted to cover it up. To me this was moral turpitude and cowardice.

The report states: “At 8:45 p.m. December 10, Council reached the matter identified as the 2016 Non Union Compensation adjustment recommendation. This is identified as item #8 of the 2016 Tax Supported 4 (sic).”

Okay let’s offer an explanation of this Amberley Gravel statement.

They are referring to the 2016 budget. I contend, and the provincial Sunshine List concurs, that those increases were awarded for 2015, not 2016. If Amberley Gravel can’t keep it straight, how do they expect the citizens to understand … or maybe they don’t.

The top three managers’ increases were for 2015. In my opinion, this only exacerbates the sloppy financial management that has plagued the citizens.

Here’s why. In March 2015, council approved the 2015 budget. It is certain that non-union compensation for 2015 would have been included in that budget. Why did it take a special closed session meeting Dec. 10 to approve the $98,202 staff increases? Would this not generate a negative variance of the 2015 Budget when the 2015 Financial Information Report (FIR) is filed to the province?

As an aside, the 2015 FIR was not completed until August 2016 chiefly because the financial staff was missing two key employees, General Manager and Treasurer Janice Sheehy, who resigned in March 2016 and Tara Baker, a financial analyst who went on maternity leave mid year.

Now, two of the recipients of this Dec 10 event are gone, leaving just CAO Thomson as the third employee who received the increase in 2015. And neither he, nor any member of council who approving the award, has said a word about this exorbitant public expense that has been covered up for the last 14 months.

Was it just coincidence or a cover-up?

Even stranger, there was another closed session of council, just four days later, December 14, 2015, to approve the Indemnification Bylaw. Thus it authorizes repayment of legal costs incurred by any staff member, or elected official if they are charged with a legal procedure onitiated by any citizen or corporation.

There is one legal case currently in play in which a former city official has sued a citizen for alleged defamation. This case is a reversal of the intent of the Indemnification Bylaw.

Even more important, was it just coincidence that after the recipients received a boatload of money council, in its wisdom, decided to make sure that no one complained and sued the city or its officials?

On November 2, 2016, I requested an investigation by the city’s closed session investigator who was on a retainer with the city since 2008, the request was denied. As far as I can find out, this is only the fifth such request that has been investigated since 2008. None of them were granted or in favour of the complainant.

This investigator is a part-time employee of the city who represents the staff and elected officials but not the public interests.

I should point out that an investigation implies that all affected parties are interviewed. I never heard from the Investigator, Amberley- Gravel, located in London.

Why are citizens paying for this “independent” service that apparently always sides with the administration? Particularly when more than half of the 445 Ontario Municipalities use the services of the Independent Ontario Ombudsman’s office for such closed session investigations.

This is another tactic used by the administrations headed by the former mayor, Karen Farbridge, to suppress public opinion and participation in the business of the people’s government.

In the past nine years, the record is full of examples of the misuse of closed public sessions of council to conceal, thwart or de-politicize important events and decision involving spending the public’s money.

So the cover-up remains. Mayor Guthrie and his council could have prevented this abuse of the public purse and right to know. I know there is a minority of council who probably did not go along with this decision to grant large increases to three staffers.

But because of the implied threat of being investigated by the Integrity Commission for speaking out about the details of closed session meetings, they are politically hogtied. That’s how the former mayor kept the troops in line.

While the majority of council sits back and believes they are immune from criticism and confrontation when the public objects, they will discover the wrath of the public come the next election in 2018.

I think about this a lot. Our city is being run by a collection of weaklings on council and a depleted senior staff. That is a double whammy against the citizens. Nine years of abuse of the public trust has done n irreparable damage to the citizen stakeholders.

This is why the cost of operations in Guelph are 50 per cent higher that comparably-sized cities. That’s why our taxes are among the highest in the province. That’s why our user and service fees are higher than other municipalities of similar size.

Administrative weakness at the top

Today, there is little strength at the top of city management. By the latest count the city has lost 12 senior managers since Mayor Guthrie was elected. The city has no Chief Financial Officer, no City Solicitor, is minus two DCAO’s and a bloated city staff that needs rationalization.

It’s ironic that in the 2016 budget discussion, there was an attempt to conduct a total staff rationalization to strengthen the administration. The majority of council pooh-poohed the plan saying it would cost too much and the current senior staff had made all the staff realignments to reduce costs that were possible. It was defeated.

In the preparation of the 2917 budget, council approved hiring 13 additional employees costing more than $1million annually.

Yet, February 15, 2017, this same council voted to spend $500,000 to conduct a search of options available to sell, merge or just leave Guelph Hydro alone. The irony of this decision is to hire some nameless outside consultant to solve their problem in the next four months is like shutting off the water when the house is on fire.

For those members of council who are planning to seek re-election, here is some advice: Vote to conduct an independent audit of the city’s finances; conduct a public hearing to review all bylaws, particularly those passed by the three administrations.

Open all city meetings. If a legitimate closed session is necessary, publicize the reason and conclusion of the discussions and recommendations conducted in private.

Memo to council: Please stop treating your constituents as dummies who are manipulated and coerced. Remember whom you work for.

Just think about that

10 Comments

Filed under Between the Lines

How ten years of socialistic fascism has dominated and cost Guelph citizens millions

By Gerry Barker

February 28, 2017

Judging from the comments on the guelphspeaks blog, there is a lot of confusion about what happened to the Guelph Municipal Holdings Inc. (GMHI) and its control of Guelph Hydro and the Guelph Junction Railroad.

Remember, confusion is the tool of authority.

But what is socialistic fascism?

The fabric of political socialism is a fair description in which most Canadians believe. Fascisim means total control. And the two previous admiistrations were experts at denying the right of the public to know, using closed sessiona to discuss important public business.

Even afrer 11 years of the former federal administration led by Stephen Harper, our basic beliefs in socialism pervaded. Remember Mr. Harper steered Canada through the world’s greatest global economic disaster. Canada survived for the most part thanks largely to the Canadian Banks that were not exposed to the mortgage-backed worthless securities securities that were being flogged by the major U.S. Banks as well as many banks oversears.

But when you drill down to the municipal level, Guelph’s two Farbridge administrations have introduced and then concealed projects by adding radical energy and environmental projects that, by latest count, have cost $96 million with miniscule tangible return.

I know there is the doyens of the socialist Left, including the former mayor and her supporters, who disagree with this. There is the old expression in the financial business, “you can’t fight the tape.” But that’s what is going on right now as our elected officials, aided by senior management, are fighting the tape by trying to seek solutions to avoid what has already been revealed.

The shades of grey and black of the cover-up

A former mayor created it. Her ambitions of energy self-sufficiency and unproven theories of accomplishing her goals have led to this debacle.

It ended October 27, 2014 when she was defeated as mayor of Guelph by Cam Guthrie by more than 5,000 votes.

In early 2015, Mr. Guthrie suffered through a couple of political events as council approved the 2015 budget including a property tax increase of 3.96 per cent. It was not what he campaigned on, promising voters that he would keep property tax levels at the rate of the Consumer Price Index. The second shock was the state of the city-owned GMHI, that had been chaired by the defeated mayor.

What they learned was GMHI was a money losing, failed operation that was virtually bankrupt. The one big GMHI asset was Guelph Hydro that the former mayor had quietly incorporated in GMHI.

Protected by a closed-mouthed administration, who knew of this development?

Guthrie became chair of GMHI along with Councillors Cathy Downer and Karl Wettstein.

Wettstein, a four-year member of the GMHI board, told the October 24, 2016 council meeting that he and Guthrie had “ a negative impact” on GMHI operations.

Mayor Guthrie angrily replied: “That is the most inaccurate statement I’ve heard in the past two years.”

Wettstein knew what GMHI was up to because he was on the board. To now say that he played a role in its discovery of waste, secrecy and politics, is the height of arrogance and of covering his behind.

Then, at the same meeting, Coun. June Hofland made the following statement: “I feel very sad because I feel we have been moving backwards but we don’t have the sophistication or leadership at this time to move forward with the holding company.”

Okay June, as chairperson of Finance, you get two minutes for forgetting your fiduciary reponsibility to the citizens as their elected representative. And June, this is a game for adults.

These are comments from two members of council who were paid to serve on the GMHI board for four years. Did they sit on the board like birds on a wire? Did they not realize what their sworn responsibility was to the citizens who elected them as their representatives?

And on the February 15, 2017 they voted to sell Guelph Hydro as recommended by the Strategic Options Committee (SOC).

But wait! This 8-5 vote not to sell Guelph Hydro was not necessarily a vote not to sell Guelph Hydro, according to some councillors. Coun. Phil Allt voted to sell the utility but then hedged his decision by saying he wanted more alternatives. Some councillors who voted not to sell Guelph Hydro also said their vote depended on the SOC phase two report in midyear.

Was this motiob a vote to instruct the SOC to “explore further options?”

Huh? While it was an up and down 8-5 vote not to sell Guelph Hydro, or so we thought, it was not necessarily a vote by council to not sell Guelph Hydro.

Are you still with me?

Why are there no council representatives on the SOC? Any volunteers?

For baseball fans, this is called a politiclal squeeze play. This is when a runner is trapped between the first and second basemen and is tagged out., because there is no place to go.’’

In this case, the metaphor seems to fit.

No elected official wants to be caught between selling Guelph Hydro or not. What they do know is the people they represent are dead against selling the utility. Councillors wanting to sell Guelph Hydro are motivated by the cash the city will receive from the highest bidder, It is estimated the proceeds could be as high as $150 million.

Is this any way to run our city? Do we have to spend $600,000 to get some outsider advisor to tell us about the options? We just lost $96 million on the abortive GMHI schemes. Why are we now spending more money to placate those councillors who still believe the Community Energy Initiative was an important contribution to the city?

Remember, confusion is the tool of authority.

It remains the most epic mismanagement of the operation of this great city in its 200-year history.

Last October, the strategy of unwinding the money-losing GMHI entwined with Guelph Hydro was discussed by city council. A staff report to council recommended to “shelve, cease or park” the failed city-owned corporation.

Mayor Guthrie was thrilled when council voted 10-2 to investigate the future of GMHI using the term “rationalization.” That’s muni-speak for investigation and taking action.

That action has wrapped up GMHI by about 90 per cent. The remaining obligation to support the District Energy Nodes (pumps) is to continue supplying hot and cold water to five buildings downtown. The Hanlon Business Park Node has been written off.

It all started with the Community Energy Initiative (CEI) created by the former mayor, Karen Far bridge, in 2007. In 2011, the then mayor, supported by her majority of council, approved setting up GMHI. The first board of directors included the Mayor as chair, four members of council, June Hofland, Karl Wettstein, Todd Dennis and Lise Burcher. There were two independent members and the CEO of Guelph Hydro.

The Mayor also brought in her city Chief Administrative Officer, Ann Pappert, to be Chief Executive Officer of GMHI. She remained in that job for four years. On December10, 2015 in closed session, council awarded Pappert with a retroactive pay increase of some $26,000.The reason for this was never disclosed.

Is it possible that this incresse to the CAO, that totalled $37,501, was followed four days later when council approved a new Indemnification bylaw, It stated that the city would reimburse legal expenses of any elected or staff member if they were the subject of a legal procedure initiated against them.

Guess you may describe that timely action as locking the barn door after the horse has been stolen.

On May 16, 2016, council, acting as shareholders, was told that GMHI had lost $26.6 million and had no financial ability to pay off a loan from Guelph Hydro.

Now that loan sits of the city books as an “impaired” asset totalling $69 million in 2015 as reported by the city.

Now, supposing you are a major Canadian bank risk manager and based on the GMHI business plan, considered loaning the money to GMHI. With the state of the GMHI balance sheet showing a loss of $26.6 million, would you take the risk and loan GMHI the money?

It is safe to conclude that the former mayor, having control of Guelph Hydro, convinced the publicly-owned utility to use its credit rating to allow the loan of some $60 million.

Here are two city-owned corporations, both controlled by the former mayor as chair of GMHI and serving on the Guelph Hydro board.

This action was all done in secrecy over four years. The public was not informed nor participated in the merger of the two corporations owned by the citizens. Nor was there any information regarding the justification for obtaining the loan.

There are no underlying asssets of GMHI to justify calling the loan an “impaired” asset.

The citizens were double-duped by the whims of an eco-centric former mayor whose actions went far beyond her capability to manage fiscal responsibility. It was a monumental echo of the Urbacon affair that cost the city more than $20 million to complete the new city hall. It occurred on the former mayor’s watch.

Fortunately, her blind ambition was halted upon her defeat in 2014. By then most of the damage had been done.

In my opinion, I believe the SOC and Community Energy Initiative should be scrapped. In its place we need an independent audit of the financial impact of the Governmental and financial relationships of the three three public institutions, the Corporation of the City of Guelph, GMHI and Guelph Hydro.

Why, you may ask? Guelph currently has no Chief Financial Officer or City Solicitor. They are key players in administering life support to an administration that is bereft of qualified senior management.

If council is ready to spend $500,000 to obtain additional information on how to deal with Guelph Hydro and wrap up GMHI, the money should be spent on the audit.

Since October 2014, there is evidence that an independent audit is indicated. Here are the 11 senior staff managers who have left:

Janet Laird, Executive Directort of Environmental Services; Derek Mcaughhan, Executive Director of city Operations; Dean Wyman, General Manager of Solid Waste management; Al Horsman, Chief Financial Officer; Bruce Poole, Chief Building Inspector; Don Kudo, Deputy City Engineer; Janice Sheehy, General Manager of Finance and city Treaurer; Ann Pappert, Chief Administrative Officer; Mark Amorosi, Deputy Chief Administrative Officer of Corporate Services; Donna Jaques, City Solicitor.

If the audit reveals criminal action by the three corporations, the Ontario Attorney General should order a police investigation.

 

 

6 Comments

Filed under Between the Lines

Headline of the week: Mayor chooses Taco Bells over sale of Guelph Hydro

By Gerry Barker

February 20, 2017

Last week the news was a mixed bag of burritos. Mayor Guthrie exclaimed in print that Guelph was getting two Taco Bell restaurants. It was an artful attempt to deflect a critical personal defeat by using the trivial Taco annoucement ignoring his abortive support of selling Guelph Hydro.

And all this time we believed things at city hall couldn’t get any worse.

Wednesday night, in a special meeting of council, there were two main discussion points on the agenda. On was to receive the report of the Strategic Options Committee’s (SOC) recommendations for the disposition of Guelph Hydro.

The other was to discuss the future of Guelph Municipal Holdings Inc. (GMHI). As it turned out, there was no discussion or conclusions reached about that defunct organization that has cost taxpayers an estimated $96 million.

When the former mayor and chairperson of GMHI officially added Guelph Hydro to its short list of municipally owned properties, it created a deliberate comingling of assets. That resulted in a ruptured financial debt of epic proportions coming about three months after the defeat of the mayor. By March 2015, Mayor Guthrie became the GMHI chair and was joined by Councillors Karl Wettstein and Cathy Downer, and the GHMI board was fired.

2015, the year the truth started coming out

That was in the spring of 2015, a year of faceless fumbling including the awarding, in a closed session of council Dec. 10, of $98,202 to the top three senior executives of the administration. That was followed December 14 by another closed session when council approved an Indemnification Bylaw. It essentially protected any employee or elected official, by paying their legal bills if sued by any citizen or corporation. This bylaw’s timing, as it turned out, played a role in protecting the top three managers from any procedure brought against them by the public.

That GMHI/Guelph Hydro investigation included a long period of behind-the-scenes checking of the linked GMHI and Guelph Hydro books. In fact, the process took 14 months.

The public was never told whom in the administration, or outside consultants, performed the autopsy on GMHI and Guelph Hydro or if financial experts conducted the process. What was eventually learned was devastating in terms of the citizen’s liability to pay the bills.

Fast forward to May 16, 2016

This was the day that outgoing Chief Administrative Officer, Ann Pappert, and CEO and CFO of GMHI, Pankaj Sardana, reported some of the details of the financial implications created by the GMHI Board of Directors including the former mayor. Ten days later, Ms. Pappert left the city job.

As guelphspeaks.ca has reported on the details of the May revelations, we will move on to July 13, 2016. The city staff produced a detailed, no punches pulled, report showing where most of the money went and how it was spent.

Two current councillors, Karl Wettstein and June Hofland, received a stipend to attend the GMHI board meetings for four years. Yet, on Wednesday, both voted to sell Guelph Hydro. Why? Did they know about the financial mess GMHI was in on their watch but never said anything? Was this the silence of the lambs?

Here’s the real punch line

In September, the council appointed a committee of five called the Strategic Options

Committee (SOC) to investigate the future of GMHI, Guelph Hydro and the Community Energy Initiativem created by the former, mayor in 2007.

Little did anyone know what the GMHI plans were, how they were determined and what the business plan was to develop two District Energy Nodes (gas-fired pumps). Both were designed to perform a number of tasks. First, a contract was signed to supply ten megawatts of power to the grid from each Node. That never happened. Then contracts were completed to connect the two large Tricar downtown condominiums with hot and cold water. There has been no mention of the city’s liability in regard to these service contracts.

Next, a system of underground pipes was connected to nearby buildings, five at the Sleeman Node and one in the Hanlon Business Park node. Cost of these Nodes was $8.7 million. Cost of this co-generation piping is presumed to included in the $2.6 million GMHI admitted losses.

This was the dream of the former mayor to generate power and supply hot and cold running water to those connected buildings. Only recently, it was revealed that GMHI was also planning two large natural gas-fired generating plants, one downtown and the other in the Hanlon Park. In fact, land for these plants had been secured.

Thoughts for your consideration: How was all this financed? Who knew of the sources of funding? How did this affect your tax bills and electricuty charges for four five years? Why were there no checks or balances concerning this waste of public monet that was shrouded in secrecy?

Most of the GMHI players are gone

Only two councillors remain as survivors of the GMHI financial disaster, Karl Wettstein and June Hofland. There is more on them later.

Wednesday, the Mayor, much like his predecessor in 2008, urged council to accept the SOC recommendation to sell Guelph Hydro.

It was soundly defeated. With only the Mayor, Councillors Mark MacKinnon, Karl Wettstein, Phil Allt and June Hofland supporting it, the sale of Guelph Hydro is off the table.

Now, during its five months of deliberations, why did this committee invite the public to offer opinions on the sale of hydro or a merger with another utility? The answer is simple: If you know the answer, why pay attention to the outcome? The response was overwhelmingly negative. Yet the SOC recommended it. The cost of six months of this SOC operation was $100,000.

But there was agreement to review the recommendation and investigate further for other “options.” Council was told that would cost an additional $500,000. The SOC says it will report mid-2017.

Are we not chasing moonbeams here? The public has already spoken about the sale and is lukewarm about a potential merger with another electric distribution organization. Even the SOC co-chair, Pankaj Sardana, warned that mergers are not always successful and the culture clash between merged utilities warrants serious consideration before buying in. Remember, it is the provincial government that is promoting amalgamation of publicly owned power distribution centres.

This is nothing but a political move to allow municipalities to free up cash. Already most of the muncipally-owned Electric Distribution Untilities have been snapped up by private corporations. Then see the value and it explains the comments of Mr. Sardan that mergers don’t always work.

Before the SOC continues it task, the public should be told how, when, and to whom the money is to be spent.

In my opinion, the SOC should wrap up the Community Energy Initiative, the over-riding influence of the demise of GMHI and its quest to make Guelph self-sufficient in use of electricity.

Let the next council decide the direction these energy issues should take.

Why the urgency to sell Guelph Hydro?

So why is the Mayor anxious to sell Guelph Hydro? He has a king-sized financial problem on his watch that 100 Taco Bells can’t solve. He wants to open his 2018 re-election campaign with a clean boatload of money to build the South End recreation centre and the Wilson Street parkade.

With a book value of an estimated $150 million, the sale of Guelph Hydro would have solved a lot of pressing demands for funds.

There are other solutions to reforming the administration. The city overhead is choking growth. When you are faced with a loss of $96 million, there are only three ways to solve it:

Enter an aggressive, cost cutting of operations planned by an experienced and qualified financial expert, or sell off your assets to pay for the shortfall. There is another option, pay it off by using the city’s Standard and Poor’s credit rating and borrow more money (see cost cutting above).

Spending another $500,000 seems like a last ditch effort to salavage the reputations of former GMHI participants who, collectively, must share the responsibility of failure..

The $23 million Urbacon settlement costs are are penny ante compared to GMHI’s flight from financial reality.

15 Comments

Filed under Between the Lines

The meeting that left the GMHI eight ball still on the table

By Gerry Barker

February 17, 2017

Follow guelphspeaks.ca on Facebook and Twitter

Thank goodness there were eight councillors who voted not to sell Guelph Hydro plus 11 delegates saying the same thing. The city spin does not quite describe it this way but as a vote against selling the utility as recommended by the Strategic Options Committee (SOC).

The more than four and a half hour meeting failed to discuss the Guelph Municipal Holding Inc, (GMHI), financial disaster that has left a $26,637,244 million loss in its five years of operation plus a stranded debt, a $65 loan from Ontario Hydro. It has been artfully morphed into an asset now parked on the city books, one that is “impaired” because GMHI is bankrupt and cannot even pay the interest.

In the city’s 2015 Financial Information Report this ”asset” was listed at $69 million.

Yet GMHI was not discussed during the meeting that was called by council representing the shareholders of GMHI, that’s us. The topic was on the city agenda for the Wednesday meeting but never brought up.

Checking with Bloomberg Financial Services, there are no executives listed. GMHI is defunct and as a wholly owned subsidiary of the Corporation of the City of Guelph. And on Wednesday, there was no discussion, of the status of this company by city council, aka GMHI shareholders. It was to be discussed at the February 16 special meeting of council according to the council meeting agenda.

GMHI is dead

Now we know why. GmHI was not discussed. It’s dead without identified officer of the corporation, no apparent surrender of its charter. Next question, where does the city-owned Guelph Junction Railroad fit into the new order?

The former mayor created the Municipal Energy Initiative (MEI), using the city-owned Guelph Hydro. Part of the plan was to create, through GMHI a $37.1 million District Energy system that combined electricity and co-generation to supply hot and cold water to nearby buildings.

The cost of this failed, massive project was not made public until May 16, 2016, following four years of operation and development, in closed session meetings of GMHI and city council. The secret GMHI plan included the construction of two, large natural gas-fired generating plants. One was to be built in the Hanlon Business Park and the other on city-owned property downtown. It is possible that the Hydro loan was to be used for these separate district energy plans.

It was the GMHI plan to make Guelph self-sufficient by creating its own power. What is this SOC bunch thinking are they trying to convince council and the public that we must endure another scheme to improve Guelph Hydro? The ramblings of the committee offering electrcity storage batteries in every basement are something out of Star Wars. It’s that spacey.

The citizens have just gone through a pricey, failed plan to turn Guelph into a community of self-sufficient power. Thanks, but no thanks.

The complicity of Guelph Hydro in this convoluted secret project is apparent and contributed to the soaring costs of electricity, up 45.5 per cent in four years, to its more than 55,000 customers.

Wearing two hats can be a recipe for disaster

Council and the city-owned Guelph Hydro, did not question the former mayor’s decision to amalgamate it with GMHI, of which she was chairperson before her defeat as mayor in 2014. That’s when the people decided enough was enough.

So why is this minority of council, led by a Mayor who wants to sell Guelph Hydro is the right thing to do?, paying another $500,000 to continue this examination of the future of Guelph Hydro?

While council, by an 8-5 margin, voted not to sell Guelph Hydro, it failed to even discuss GMHI, the MEI and District Energy system. Why is an independent committee composed of citizens with special interests and futurism, examining the operations and making recommendations?

Another odd element was the absence of CAO Derrick Thomson who is co- chair of the SOC composed of Pankaj Sardana, Hydro Board member Robert Bell (not Coun. Bob Bell) Richard Puccini and a former GHMI board member?

In the 2015 Financial Information Report, the city reported that there was an impaired asset outstanding of $69 million. The reason the amount had increased was because there was no money in GMHI to pay the interest. Presumably, there are no hard assets underlying this $69 million because GMHI is essentially bankrupt.

So the city takes on this debt, lists it on its books as an asset. Since the city has folded Guelph Hydro into its financial orbit, it’s only a matter of time before the “impaired” asset becomes a liability and will have to be written off,

Because of the operational secrecy employed by GMHI over the four years, there are still many questions that need answers. The ultimate hypocrisy employed by GMHI was sending a so-called $1.5 million dividend to the city each year to justify its existence. It was just a return of our money while GMHI in its entire history never made a dime. That’s a “Ponzi scheme” in which shareholders are repaid with their own money that is, paying through your hydro and water bills.

Writing off $96 milliom has cost every citizen

I don’t know how you feel about this, but the prospect of writing off some $96 million is one of the main reasons that the administration has no money for needed capital projects such as a new Downtown Library, Wilson Street Parking garage, and the South End Recreation Centre.

Another odd element was the recommendation of Mayor Cam Guthrie urging council to vote to sell Guelph Hydro. Councillors Mark MacKinnon, Karl Wettstein, Phil Allt and June Hofland joined him.

Two councillors, Karl Wettstein and June Hofland had a lot of nerve even participating in the Hydro vote. For four years, they were GMHI board members who were paid to serve on the board and never questioned or revealed the growing financial disaster of GMHI. Is this not an abuse of the public purse?

With MacKinnon and Wettstein, both representing Ward 6, they were salivating with the belief that the sale of Hydro would lead to building the $60 million South End recreation centre. Phil Allt’s said he was firmly opposed to selling Guelph Hydro but wanted more options. So why did he vote for the sale? Along with the Mayor who also said he was in favour of having the committee come up with more options.

The SOC has spent $100,000 since it inception Last September and is now projecting spending another $500,000 to complete phase two and report to council mid-year. So the $600,000 cost of all this jerking the public around will change the minds of those who voted against selling the utility?

It only points to the sheer desperation that the city administration is facing due to the GMHI financial disaster. Selling off Guelph Hydro is not an option to fix the mistakes of the past.

There was still no reference to the defunct GMHI situation.

But Panaj Sardana warned that the various merger options were not a slam-dunk. He said that on the negative side of the merger option, “Lots of mergers fail.”

“You’re talking about bringing cultures together and that has a huge impact on people, on companies, and you could have a very real culture clash,” he said. “If you don’t get this right, then you have challenges down the road.”

And the Mayor and certain members of council believe that investing another $500,000 will change things?

And how does a five-man (gender imbalance) committee justify spending $500,000 in the next four or five months?

Could it be that certain former officials of the city are complicit in corruptive practices and this failure to investigate the GMHI financial disaster is part of the cover-up?

Thanks to all you folks who influenced this Hydo NO Sale vote. As citizens we do have power the trick is how and when to use it.

19 Comments

Filed under Between the Lines

Tonight, it’s time to tell the truth about the failure of GMHI and Guelph Hydro

By Gerry Barker

February 15, 2017

Check out guelphspeaks.ca on Facebook and Twitter

Tonight’s meeting, starting at 6 p.m. at city hall, will be a challenge for council and the administration to tell the truth about the huge losses encountered by the Guelph Municipal Holdings Inc. (GMHI) and Guelph Hydro. And include future liabilities to the taxpayers.

It’s time for the administration to level with the people and tell them specifics about the multi-million losses that the Community Energy Initiatives cobbled together by the former mayor. Her agenda was to make Guelph a world-class leader in energy efficiency and its environmental bedfellow.

Here’s what we do know.

On May 16, GMHI CEO and CFO Pankaj Sardana, along with former CAO Ann Pappert revealed that GMHI had accumulated losses of $26,637,244 million. Both officials signed the report tendered to city council. Ms. Pappert resigned 10 days later.

On January 12, it was revealed that the former mayor had even bigger plans. GMHI secured two parcels of land in order to build two Natural Gas-fired generation plants, one in the Hanlon Park and the other downtown. The cost of these plants and the two parcels of land needed to build them have not been disclosed.

Here are the write-offs. The capital cost of the Hanlon District Energy Node of $5.1 million will be written off. With only two customers, it loses a reported $55,000 every year. The Sleeman Centre Node cost was $6.1 million with $3.6 million being written down. The Sleeman Node makes some $127,000 a year.

Next, we are not told the cost of the underground thermal energy system connected to two Tricar condominium buildings, the RiverRun Theatres and the Sleeman Centre. Instead, we are told that the thermal system, powered by the Sleeman Centre District Energy Node will continue to supply hot and cold water for heating and cooling. Again, there are no details of the cost to citizens. What does that commitment accomplish in perpetuating GMHI, at the public expense?

At this point, we should be told of the total and ongoing cost of these misguided projects now and in the future

Here’s what we don’t know.

Because of the operational secrecy employed by GMHI over four years, there are still many questions that need answers. The ultimate hypocrisy employed by GMHI was sending a so-called $1.5 million dividend to the city each year to justify its existence. It was just a return of our money while GMHI in its entire history never made a dime.

In polite circles, that would be described as a “Ponzi” scheme. Paying off the city or the city-owned Guelph Hydro with its own money.

Because the former mayor and chair of GMHI, did not allow public participation in her management of GMHI, we have been handed one of the most serious financial

operating deficits in the city’s history.

Then there is that $65 million borrowed from Guelph Hydro by GMHI. In his May report, Mr. Sardana admitted that neither GMHI nor Envida Community Energy, a subsidiary of Guelph Hydro, had any financial resources to even pay the interest on that loan.

In the 2015 Financial Information Report, the city reported that there was an “impaired” asset outstanding of $69 million. The reason the amount had increased was because there was no money in GMHI to pay the interest. Simply, there are no hard assets underlying this $69 million loan because GMHI is essentially bankrupt.

So, the city takes on this debt and lists it on its books as an asset. As the city has folded Guelph Hydro into its financial orbit, it’s only a matter of time before the “impaired” asset becomes a liability and will have to be written off by fitire councils.

The questions remain, where did the money go? Was it spent? Is it a legitimate asset of the city? Is it no longer on the Hydro books?

Is it possible that the city financial managers have conjured a plan to keep the loan off the hydro books because the council committee is preparing us for the sale/merger of our electric distribution system?

The temptation of getting its hands on the proceeds of a sale on Guelph Hydro that could reap more than $150 million to solve all its wasteful spending problems and mismanagement of our affairs.

We are not the lost tribes of Carden Street. We are all the citizens impacted by this impending bad decision.

Make no mistake. This plan is in a full court press to selloff the jewel of our city assets to right the wrongs of the past.

My advice? Only the people can stop it by pressuring the council by email, telephone, Twitter and Facebook to say no and demand the truth of what has happened to our city.

If you turn up tonight at 6 p.m. in force, council will listen.

If council fails to listen to the people, then they are all in peril in October 2018 of being re-elected.

That I can guarantee.

I know there are some coucillors who understand the ramifications of tonight’s decisions. But the majority of progressives can be defeated by the people.

I don’t know about you, but this is a no-brainer. Stop, tell the truth and lets start the process of returning Guelph to fiscal responsibility and meet those targets that almost all people want that are bring denied.

You know what to do.

 

9 Comments

Filed under Between the Lines

Citizens will hear the future of Guelph Municipal Holdings Inc. & Guelph Hydro Wednesday night

By Gerry Barker

February 13, 2017

Follow guelphspeaks.ca on Facebook and Twitter

Important note: The sale or merger of Guelph Hydro is scheduled for Wednesday night February 15, commencing at 6. p.m.  The fate of GMHI will also be discussed the same night. Sorry for the inconvenience. My advice still stands, please plan to attend the Wednesday meeting and make your voices heard. GB

On Wednesday, expect a different tactic employed regarding disposal of Gyelph Hydro.. A five-person committee, headed by CAO Derrick Thomson, is asking council to approve the sale of Guelph Hydro with the committee having the power to do so.

This time the method is different from 2008 when then Mayor Karen Farbridge was defeated in attempting to have council approve the merger with two other local distribution facilities in Hamilton and St. Catharines.

This is nothing but an end run to capture capital gain from the sale or merger, take your pick but someone is going to pay for it,

How can this committee, that has one member of council on it, Bob Bell, be given the power to dispose of the city’s most valuable, profit making asset?

How can the committee gain such power when the future of the Guelph Municipal Holdings Inc. misadventure into a $96 million disaster, hangs over the city like a vulture setting up his evening meal.

Ask yourself, where does the city, the one without a Chief Financial Officer for more than two years, plan to use this potential cash bonanza? Reduce the debt? Pay-off the $65 million hydro loan now sitting on the city books as an impaired asset. That’s because the borrower, GMHI, chaired by former mayor Farbridge, has no money to even pay the interest of the Hydro loan.

Apparently, the Wednesday agenda will discuss extending the future of GMHI to be targeted until mid year.

Are the potential Hydro sale/merger proceeds going toward the police HQ renovations? Or a new downtown Library? Or the South End recreation centre? Those items total capital spending of $140 million.

Is this prudent management of city assets? We live in a city that has higher operating and capital spending budgets than Cambridge and Kitchener, some 50 per cent higher. The disappearance of senior managers since 2014 has made matters worse. Our taxes are among the highest out of 445 municipalities in the Province.

Even more interesting, the Thomson committee debated for five months. They asked for public input and the response was overwhelming against the sale/merger of Guelph Hydro.

The committee also gave citizens little time to appear before council to comment on the committee recommendation to allow it to sell or merge Guelph Hydro. Is this fair?

This is nothing but a gigantic sham to shut down public protest and grab the value of Guelph Hydro estimated to be $150 million.

* If you want someone else to control your electricity costs, don’t show up Wednesday night.

* If you believe what this Thomson committee was told by outside consultants about the declining value of Guelph Hydro and the future of turning your home into a storage site costing thousands of dollars, then don’t show up Wednesday night.

* If you believe that your water bills are going to be reduced if Guelph Hydro is sold, don’t show up Wednesday night.

* If you believe that the proceeds gained by selling off Guelph Hydro will lower your taxes, don’t show up Wednesday night

* If you have faith that council will table the committee recommendation, don’t show up Wednesday night.

It’s time to call a halt to the sloppy and inefficient management that has been denuded of talent. Instead, it lurches on without reducing the city’s gargantuan spending policies that always are directed at the wrong goals at the expense of the necessary goals.

This is the citizen’s opportunity to protest this recommendation that lacks the credibility of public power.

If council passes the recommendation, say goodbye to public trust, power and the city’s most valuable asset.

Addendum

In my opinion, Councillors Karl Wettstein and June Hofland should not participate in discussions regarding Guelph Municipal Holdings Inc or the proposed sale/merger of Guelph Hydro. Their role of serving on the GMHI board of directors for four years and participating in the $96 million dollar losses, linked to Guelph Hydro, of that city-owned corporation, creates a conflict of interest.

15 Comments

Filed under Between the Lines

City dismisses a key senior employee for release of confidential information

By Gerry Barker

February 10 2017

NEW! Share this post on Facebook and Twitter.

Today marked the end of the Farbridge administrative regime existing for the last ten years. Chief Administration officer (CAO), Derrick Thomson announced that Deputy Chief Administrative Officer (DCAO), Mark Amorosi, was no longer employed by the city.

Reaction was swift as the Internet lit up with comments from citizens supporting the departure.

As the editor of guelphspeaks.ca, involved in a lawsuit commenced by Mr. Amorosi, at this time, I will have no comment until the details of the dismissal become more relevant to the case.

While the CAO applauded the “valuable contributions that Mr. Amorosi contributed to the City of Guelph, there were many underlying concerns about the operations of the city by a DCAO who oversaw, Finance, Human Resources, Information Technology, Special Project Management and Court Services.

That responsibility was the largest senior management responsibility of any of the three DCAO’s. They reported to CAO Derrick Thomson who announced the departure of Amorosi.

Enter the $1 million lawsuit by former Chief Building Inspector Bruce Poole, against the city for wrongful dismissal. His lawyer, during the examination for discovery, asked the city for emails concerning Mr. Poole’s firing. Instead the city downloaded the files from the server and hundreds of alleged confidential, unrelated emails were included. Most initiated by former Chief Administrative Officer, Al Horsman.

But here’s the problem. While Amorosi was responsible for the Information Technology department, headed by former city clerk, Blair Labelle, the drive sent to Bruce Poole’s lawyer contained a ton of alleged confidential information. It was an external thumbnail drive reported to contain 53,000 emails included in the information that was requested by Mr. Poole’s lawyer.

Tony Saxon, reporting in the online Guelph Today, published some details of the thumnail drive in a report last Friday morning. The public reaction was instant. By the afternoon CAO Thomson, apologized and requested the return of the offending drive.

But here is where the plot thickens. Five days later, the city fired Mr. Amorosi.

This is a veteran senior manager who had enormous responsibility for eight years.

In my opinion, this firing statement published by the city, did not trigger the dismissal. It was something else that created the immediate firing of a senior manager making $216,000 a year.

It may never be revealed what the real reason was because of the secretive manner in which the public is denied specifics of the how our city is managed. Or why voters rejected in 2008 the sale of Guelph Hydro. Yet the administration is now seriously considering selling or merging Guelph Hydro…the same thing.

Digging into it, the committee charged with examining the options of the future of Guelph Hydro, has heard from a consultant that today’s Hydro Electric Distribution (LDC) systems are outdated and losing value.

Why? Because more and more local power distribution systems are being overtaken by technology. He cited that people would have batteries in their basement to store unused power generated by rooftop power generated solar panels.

To interpret, he is saying that a homeowner will have to invest thousands to install the solar panels, then the storage batteries and the necessary control equipment.

When Tesla, the electric car company operated by Elon Musk, builds the world’s largest battery manufacturing facility, and along with dozens of other companies, they have been working to develop high-capacity batteries for cars.

To suggest that there is technology today that is reasonably priced is misguided and a disservice to citizens. Think about it. We have a perfectly working electric distribution system that derives power from a well-established source.

Why would citizens in Guelph agree to sell a perfectly well operating electric supply system, based on this specious information promising something that is non existent today? Why would they agree to lose control of their Hydro distribution system to be exposed to new charges from a new owner for a service they need?

I contend, that our Guelph Hydro system is doing the job intended since it has going back to Adam Beck and the Niagara Hydro generating systems.

Haven’t the citizens being exposed enough by the errant Guelph Municipal Holdings Inc? It has been an adventure imposing a District Community Energy system to almost bankrupt the city, losing some $96 million?

The case is clear. Our administrative overhead costs are way out of line. We can survive if the council realizes what is the only course of action to save the city financial problems.

Selling Guelph Hydro is a band aid. Managing our overhead, as outlined by Pat Fung, CA, CPA in his detailed analysis of city financial management, is the responsible way to reduce our costs and dependence on ever-increasing property taxes.

Today may be the first day to begin the recovery of common sense and reform of an administration that is ill. Is it ready to correct the mistakes of the past without selling a premier asset?

As a final note, I have disagreed with some of the decisions of Mayor Cam Guthrie in the past two years. But I must say, that he is on the brink of cleaning up the financial mess he inherited.

Drive on.

12 Comments

Filed under Between the Lines