Monthly Archives: August 2017

Shared Economy: Another incomprehensible project we are expected to accept

By Gerry Barker

August 17, 2017

This week the city sent a press release about “navigating the shared economy.”

It was long on jargon and these was a pathetic explanation by Mayor Cam Guthrie.

“I’m proud of the leading role Guelph has played in creating a tool that will help local councils and communities analyze the impact of various sharing economy services on their own residents and businesses so they can make decisions based on local needs.”

Some clarity please, Mr. Mayor. What kind of tool are you talking about? How will it help the cost of services to the citizens specifically, what are you talking about?

Perhaps Chief Administrative Officer Derrick Thomson can explain it: “Sharing economy initiatives are being shaped by zoning codes, hotel and taxi licensing regulations, transit and all manner of distinctly local policy. The Shared Economy guide is designed to help municipalities understand this new economy, what it means on a local level and how to respond appropriately.”

Does this Shared Economy include include tighter financial control of operating overhead and capital budgets? Particularly, in view of the huge losses incurred by the city management such as the $163 million wasted on the failed Guelph Municipal Holdings Inc? Part of that has been parked on the Guelph Hydro financial statement as a $94 million debt. The balance of the loss is the shareholder’s (all citizens) equity of some $67 million spent on a variety of projects, most of which were authorized and executed in closed-session meetings between 2011 and 2015.

Was this a shared economy issue?

This week the Association of Municipalities of Ontario (AMO) is meeting in Ottawa. The Guelph delegation composed of some councillors, led by Mayor Guthrie, has joined in support of a recommendation to the provincial government to raise the Ontario portion of the sales tax by one per cent taking the HST to 14 per cent.

The Ontario government rejected the proposal a few hours after the presentation. What were the municipal representatives thinking? Did they believe that the Wynne Liberals would approve increasing the HST before a provincial election June 7, 2018?

First, the provincial government funds the AMO. That gives it power to accept or reject proposals.

Second, excessive spending of the public’s money are the problems facing the 445 Ontario municipalities. Chiefly, in most cases it is repairing and replacing neglected infrastructure. A Guelph staff report pegs the cost of infrastructure in the city at more that $400 million.

In many cases it’s about cash management particularly, revenue from property taxes and user fees. In Guelph, there has been endemic abuse of boosting revenues from those sources to pay for misadventures in environmental projects with no return.

In most homes and businesses, revenues must balance spending. The use of credit to invest in necessary lifestyle issues such as emergencies, operating costs and capital projects, is practised in more than 90 per cent of property owners and businesses.

The corporation of the city of Guelph is no different. It is obligated by the province to supply a Financial Information Report (FIR) annually with no deficit.

What has occurred over the past ten years is that the budget forecasts have been exceeded because of overspending. It is an annual occurrence. The city does have a safety net called reserves. In 2009, Coun. Leanne Piper was quoted as stating that the city had $77 million in reserves. In 2014, an outside management consultant, BMA, said those city reserves had been depleted and used to balance the city books. Their report raised a “red flag” over the reserves’ depletion.

In 2012, a citizen’s activist group, GrassRoots Guelph, presented a petition to the Minister of Municipal Affairs and Housing. The documented petition, using the city’s financial statements, presented data that showed the discrepancies in the annual FIR’s. The petition requested an audit of the city’s finances. The Minister said the two parties should get together to resolve their differences. It never happened. The former CAO, Ann Pappert, claimed it was a waste of time.

This was a fight between two pit bulls in which there was no loser except the citizen’s of Guelph.

Guelph has become the poster city for failing to control spending on projects initiated by elected officials and staff of public servants with little public input.

For the past 10 city budgets, starting in 2007 until 2017, property taxes have increased annually by an average of 3.6 per cent. This has resulted in an exponential increase of some 45 per cent.. Now we are about to begin the 2018 budget negotiations spurred by staff recommendations.

Keep in mind this is an election-year budget so there will be debate about revenue and expenses. The council will end up approving budgets designed to please the electorate and lull us into believing all is well.

Instead, citizens are being fed another new management plan called the “Sharing Economy.”

Here is a capsule of the city press release’s explanation:

“The Guide provides a brief introduction to the sharing economy and then identifies the following six decisions to guide municipalities that are anticipating or reacting to a shared economy platform in their jurisdiction.

Ulp! Why is Guelph the instigator of this?

  • What type of approach is most appropriate?
  • Answer: Control spending and control of revenues is limited. That well has drained. Change the composition of city council. Reduce the number of councillors to nine from 13. Elect a single full-time councillor in each ward. Elect at large the Mayor, Deputy Mayor and an executive councillor with the key responsibility of overseeing city finances.
  • What are the primary public policy goals?
  • Answer: Fix the assets that are broken or are redundant. Stop buying the people with their own money such as the Well-Being handouts and miscellaneous city supported community projects.
  • What type(s) of sharing will be included?
  • Answer: Managing a city is not rocket science. We elect people presumed to be aware and competent and professional staff to manage the city.
  • What kinds of policy actions or tools are needed?
  • Answer: Control spending on consultants. Reduce staff and overhead costs. Work on developing growth in the manufacturing area to increase assessment and reduce the dependence on residential assessed properties. This will also provide jobs outside of the public sector.
  • Design considerations
  • Answer: The city council must enact considerations based on facts supplied by the professional staff. There must be a clear division between elected and professional officials to provide a system of checks and balances. In Guelph, there has been a serious lack of financial management and policies.
  • Implementation and evaluation
  • Answer: Most people in the city feel that there has been too much money spent on failed mismanaged projects. This is one program that should have full public input.

The Guide was commissioned by the Large Urban Mayors’ Caucus of Ontario, financially supported by the Province of Ontario and developed in collaboration with the Guelph Lab—a partnership between the City of Guelph and the University of Guelph.

A variety of other partners including the Guelph Chamber of Commerce and the municipalities of London and Mississauga contributed to the Guide.

We should be wary of this proposal, as we have just experienced a similar collaprative venture known as the Community Energy Initiative. It is important that we solve the immediate problems facing the city before launching into an academic exercise that may distract us from what’s needed today.

Too much money has already been wasted; it’s time to stop the bleeding.

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Guess who the Progressive Conservative candidate in Guelph will be next June?

By Gerry Barker

August 14, 2017

Guelphspeaks has learned that the Guelph Provincial Progressive Conservative Association has been bypassed and informed that PC headquarters in Toronto has made a selection.

There is nothing illegal in this although one would naively expect that the choice of a candidate should rest with the local association. This is the second time the PC PooBaas have overridden the selection of a candidate. Anthony MacDonald was parachuted in to represent the Guelph PC’s in the last provincial election. We all know how that turned out.

My sources tell me that the PC Association has been hard at work vetting candidates and preparing to hold a nomination meeting. Then, there was the sudden withdrawal of trucking executive Tom Mooney, as a candidate, in protest of PC headquarters finagling with the process. Mr. Mooney stated that there was too much of this going on across the province where PC candidates were being chosen.

I asked one of my sources if the local PC Association cannot run a nomination meeting to select the best candidate, why is there an association? “It’s exists to raise money,” was the response.

So who is the anointed candidate to represent Guelph in the Ontario Legislature?

My sources say it is our Mayor, Cam Guthrie.

There is no doubt that Mr. Guthrie is well known in the city. He won the 2014 civic election by more than 5,000 votes, defeating a three-term mayor. However he was unable to persuade the majority of his council that property taxes had to be held to the Consumer Price Index rate as he promised his supporters. In March 2015, his first budget resulted in a property tax rate that was eventually 3.96 per cent after adjustments.

But he did put the brakes on the Guelph Municipal Holdings Inc.’s (GMHI) multi-million experiment. This failed to create a made-in Guelph self-sufficient in power generation and co-generation thermal underground water heating and cooling system.

In May 2016, Pankaj Sardana, then Chief Executive Officer and Chief Financial Officer for GMHI reported the Community Energy Initiative (CEI) projects in the Downtown area and the Hanlon Business Park, were financial disasters. What we didn’t know at that time was the extent of the losses by GMHI and Guelph Hydro that loaned some $94 million to GMHI in the form of two debentures.

Mr. Sardana said the two District Energy Nodes (pumps) and co-generation project should never have been started in the first place.

The former mayor, Karen Farbridge, who acted as chair of the GMHI Board of Directors for four years until her defeat in 2014, founded the CEI and GMHI. It is noted that Ann Pappert, the Chief Administrative Officer of the city, also served as CEO of GMHI for four years.

Ms. Pappert co-signed the devastating GMHI report to council and left the city ten days later, May 26, 2016. She received $237,500, plus a taxable benefit of some $6,300, a full year’s pay for five months work.

Mr. Guthrie was a supporter of Ms. Pappert and he attacked a citizen who wrote a scathing report of Ms. Pappert’s performance as CAO. He threatened the resident with legal action but never advanced his threat. In my case, he wrote a number of emails to his supporters not to believe me and pay no attention when I reported that council was reviewing Ms. Pappert’s contract.

Mr. Guthrie was no fan of guelphspeaks.ca

Then along came that December 10 closed-session meeting of council that approved $98,224 increases for four senior executives. CAO Ann Pappert, Deputy Chief Administrative Officers Al Horsman, Mark Amorosi and Derrick Thomson. Only Mr. Thomson remains and is now CAO of the city. Those four increases ranged from 14.7 to 19 per cent. There was no evidence of justification for these increases that were concealed until March 2016.

Guelphspeaks revealed, in late March 2016, just how much those four executives received as reported in the 2016 Sunshine list published by the province of every public employee earning more than $100,000.

Mr. Guthrie, as mayor, presided over that closed meeting. Attempts to have the minutes revealed have been denied. The public has no knowledge of which councillors approved or objected to the increases. The bottom line is why was it done in secret knowing full well that it would eventually be made public?

Was the Guthrie council so confident that people would soon forget the deception?

Now the result is a lawsuit initiated by a member of the executive group who was dismissed last February.

That procedure has not been brought to trial. If and when it does, the discovery process could involve testimony by those members of council and staff participating in that closed meeting. The delayed discovery of which, led to the lawsuit.

By choosing Mr. Guthrie to be the PC candidate, the PC party should be prepared for fallout of the Mayor’s support in the next ten months.

The question is: When does provincial candidate Guthrie resign as Mayor of Guelph? The civic election is not until October, five months after the provincial election June 7, 2018.

Which leaves us with two major party candidates having performance issues that will result in a tumultuous campaign and an opportunity for the NDP to win the election.

I shiver in anticipation.

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Is Linamar getting a fair shake trying to hire 15 foreign electricians?

By Gerry Barker

August 8, 2017

Years ago, I was employed by Magna International. I was named general manager of a venture to create a new Canadian business magazine titled Vista. In a few months I learned a lot about Magna’s manufacturing ability. The company was creating record business, making a wide variety of parts for new vehicles for the majority of auto manufacturers.

The concept of on-time delivery of those parts to the assembly plants located all over North America and Europe at that time was fairly new. Magna had many manufacturing facilities throughout Canada and the U.S. to meet the strict deadlines for each assembly plant. Their success in meeting those deadlines made the assembly operations more efficient.

I recall that the most pressing need was for tool and die makers. It forced the company to import trained personnel mostly from Frank Stonach’s homeland, Austria, to create the parts. If Canadian authorities had prevented the import of skilled technicians, Magna would not be the company it is today, a world leader in not only supplying parts but also assembling complete vehicles.

The parallels between Magna and Linamar are striking. Both companies were each founded by two skilled immigrants who had the vision of building great corporations.

That was almost 60 years ago and cultures change, people change and so do attitudes.

Last year, Linamar applied to the Department of Employment Social Development Canada to hire 15 foreign-trained electricians. The company argued that they could not retain Canadian electricians. Linamar stated that when they were successful hiring Canadoan electricians, they left for a number of reasons. Those reasons varied from shift work to low wages and benefits.

The department denied the request in 2016 so Linamar appealed to have its case reviewed by Justice Luc Martineau. He supported the decision by the federal employment department and last month rejected the application as published by Guelph Today’s reporter, Tony Saxon.

The Justice heard evidence from the Electrical Workers Construction Council of Canada, representing unionized electrical workers, that there was a high unemployment rate of electricians in the Guelph area. The source of that information was never revealed.

That seems to fly in the face of the claims by the city administration that Guelph has one of the lowest unemployment rates in Canada. Are the qualified electricians alledgedly the only worker group that is unemployed in the Guelph Area?

Keep in mind that Linamar emplys 6,000 workers in Guelph, none of whom are members of a union.

Also, keep in mind that Linamar is the largest non-public employer and taxpayer operating in Guelph with 19 plants to meet its contract obligations with auto industry customers.

When the importation of skilled foreign workers helped Magna grow and prosper, why is Linamar being denied the same right in 2017?

Now, Guelph is a city where there is a large number of unionized public workers. For example, the city employs some 2,100 of which 80 per cent are unionized and the balance belong to a management association. It is estimated that there are more than 5,800 employees in the city being paid from the public purse. That includes the University of Guelph, Guelph Hydro, Guelph/Wellington Public Health services, Guelph General Hospital and the St. Joseph’s Senior Living and Rehab Centre, Ontario service employees, and Federal government employees

The Ontario Liberal government has allowed the growth of these public unions, the number of which has grown exponentially in the past 14 years of the McGuinty/Wynne Liberal governments. Not only has public employee wages and benefits soared but their numbers have increased substantially. In that space of time, the growth of the public sector employees has far outstripped that of the non-union corporations.

The Saxon story generated a lot of comments, mostly attacking Linamar’s employment practices. The main beefs, according to the comments was the company’s shift times that were hard on workers, and also the average pay per hour was only $20. This shift system is described as the “continental” when workers are required to work 12-hour shifts and change starting times every two weeks. Based on that, it would appear that Linamar workers are working slighly more than three days in a 40-hour week.

Given the circumstances, it appears the Electrical Workers Council is denying a major Guelph corporation the right to hire skilled electricians from outside Canada. That is a striking example of a union-based organization protecting its turf. As a former union member and shop steward, I recognize the role of organized labour and the right of collective bargaining.

In this case, the eeelectrical workersw union council has stepped over the line and interfered with the operation of a major Canadian company that is listed on the Toronto Stock Exchange.

We’re talking here about hiring 15 skilled employees because the Canadian electricians don’t want to leave the cocoon of their trade union to work in a non-union shop.

The fact that a federal government department is supporting suppression of hiring skilled foreign workers, particularly when 47,000 Syrian refugees were allowed in last year, did the Trudeau government specify that no electricians would be permitted entry?

Just asking.

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Is the selling of Guelph Hydro already a cooked deal?

By Gerry Barker

August 4, 2017

For those of us who were around when former Mayor Karen Farbridge attempted to persuade us to merge Guelph Hydro with electric utilities in Hamilton and St. Catharines, even members of her council caucus voted no.

So, here we go again, with a public relations campaign amply financed from public funds, to persuade us to merge our electric distribution system with another as yet unknown utility. The city website features a list of pop-up information tables at six locations around the city starting August 3 to August 22.

The title of the web address is energizingtomorrow@guelph.ca.

The city is inviting the public to ask anything about the plan to “merge” Guelph Hydro with another utility.

Here is the administration’s reason for selling off our utility with an asset value of $228 million.

“Guelph Hydro is a high-performing utility company with a solid reputation. In light of changing provincial policies and global energy technology trends, City Council appointed a Strategies and Options Committee (SOC) to review options to help ensure customers to continue receiving excellent service and value from the City-owned electric utility company.”

It should come as no surprise that the leading contender to grab Guelph Hydro and control of its 55,000-customer base is, Hydro One.

Now, you will recall Hydro One, the operator of the entire hydro power system in Ontario, is owned by a private, publicly traded corporation. The former owner of one of the world’s largest power distribution systems is keeping a minority share. It was a $9 billion gain for the provincial government. Also it was a key maneouver leading up to a pre-election provincial balanced budget eliminating the deficit just in time for the June 7, 2018 general election.

Gee, that looks a lot like we’re being bought with our own money.

But there is more. Premier Kathleen Wynne has unveiled a plan to cut electricity costs for four years by as much as 25 per cent starting in 2018. Part of that 25 per cent is already affecting hydro customers with the government reducing the HST by eight per cent. So there is another decrease coming just in time for the provincial election.

With the Premier’s personal approval rating settling in deep freeze territory, below 20 per cent, the hydro gambit is essential for her government’s survival. The fact that the Progressive Conservatives are holding a 13 per cent edge over the Liberals, portends deep trouble over the next few months for the Grits.

So, here are some questions:

  •  If and when this sale is consummated, what’s in it for the shareholders, the people of Guelph and Rockwood, who are the owners and customers of Guelph Hydro?
  • If this happens, who will service the system when repairs are needed in the event of a major weather event or power outage?
  • What recourse have citizens got to reject the sale?
  •  If Guelph Hydro is sold, what will the city do with the proceeds?  *
  • Why does the city persist describing the disposition of Guelph Hydro as a “merger” and not a sale?

This is all about a sale of the city-owned utility. The argument that the sale is provincial policy is just not true. It has been discussed and municipalities have been told that the province wants greater efficiancy of power distribution. There has never been any debate about this or any specific directive from the province to merge with another utility.

The second argument speaks of advances in “global energy technology trends.” That’s partially true but why is Guelph Hydro being put up for sale? Why indeed, following the disasterous experiment by Guelph Municipal Holdings Inc., personally administered by the former mayor and her Chief Administrative Officer, Ann Pappert? Neither of whom is no longer employed by the city.

The record shows that the loss of GMHI was more than $160 million, according to the GMHI consilidated audit costing some $2.8 million, some of the loses have already been written off.

Still glowing in the dark are the two unsecured debentures with outstanding balances of $103 million taken out by GMHI. The only clue of who provided those debenture funds came from the Chief Administrative Officer of GMHI, Pankaj Sardana, who said the debentures, came from a group of unnamed investors.

In my opinion, I believe those investors were soured through or part of Guelph Hydro.

Ask yourself, if you were owed $103 million by a city-owned corporation that is virtually bankrupt, wouldn’t the only way of recovering the capital would be to sell your organization (Guelph Hydro)? Or in this case, demand payment from the City of Guelph.

One of the most interesting items in the Guelph Hydro’s financial statement is a $94 million debt.

If Guelph Hydro is sold, then the purchaser will retire that debt and the proceeds return to the city as part of the settlement.

No purchaser in his or her right mind would want to take on a $94 million debt of a corporation with $228 million in assets. These figures are takeb from the 2016 Guelph Hydro financial report.

These are just some of the reasons why I will oppose any merger or sale of Guelph Hydro. The citizens have been excluded from the entire GMHI disaster and have paid a heavy price for an attempt to make Guelph a world-class renewable energy provider.

In my opinion, I believe that negotiations are currently underway to sell Guelph Hydro. The SOC schedule calls for the final consummation of the deal next spring before the provincial election.

Unfortunately, that deal is already baking in the oven.

Council will still have to agree on any proposal to sell Guelph Hydro. This means that as the date approaches citizens should express their opposition to members of council.

This is no frivolous attempt but a well-financed proposal, using your money, to sell Guelph Hydro.

Is this the price we pay for five years of total incompetence?

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