History proves selling Guelph Hydro won’t solve the basic problems facing our city

By Gerry Barker

October 30, 2017

Our mayor, a man with perceived municipal fixes and promises, states that he voted against seven budgets over which he participated as a councillor and Mayor in the last three annual budgets. Perception is always accepted when the former administration fumbles multi-million cost overruns building the new city hall.’

In this case, the people voted with their feet and Ms. Farbridge was defeated. The defeat was exacerbated by the Larkin effect in convincing council to completely renovate the police headquarters building at a price tag of $34 million.

The original estimate by the Guelph Police Service Board was $13 million just seven months prior to council approving the former police Chief’s plan. Chief Larkin had already accepted a job as chief of the Waterloo Regional police service and morally had no skin in the game.

Instead the task of selling the new plan fell to former mayor Farbridge and her fellow councillor on the Guelph Police Services board, Leanne Piper. Council approved it in August just before all capital projects were frozen due to the upcoming civic election Oct. 27.

Former Chief Larkin publicly supported the Mayor in her re-election bid, breaking a basic rule of police officers not publicly expressing support for a political party or candidate in a civic election. The mayor was defeated anyway.

They’re breaking up that old gang of mine

But post-election, a group of Farbridge appointed senior managers who, without hesitation in November 21, 2014, after the defeat of the Farbridge universe, in the vacuum of political masters, reorganized the senior management staff. The group, headed by former Chief Administrative Officer (CAO), Ann Pappert, (resigned May 2016); current CAO Derrick Thomson, (resigned March 2016 and returned June 2016 as CAO); former DCAO Mark Amorosi, (dismissed February 2017); Director of Environmental Services, Janet Laird, (resigned November 2014); Chief Financial Officer Al Horsman, (resigned August 2015) Director of Operations, Derek McCaughan, (resigned November 2014); City Solicitor Donna Jacques, (resigned February 2017).

The senior staff re-organization promoted them a higher salary reflecting the new rank, as the scale of the newly named Deputy Chief Administrative Officers (DCAO) replacing the title, Executive Directors.

Two of the three senior managers of Emergency Services, Police Chief Larkin and Fire Chief Shawn Alexander resigned in 2014.

The city did not have a Chief Financial Officer from November 2014 until June 2017. Instead there were three general managers of finance and treasurer during that time, Katrina Power, Janice Sheehy and Tara Baker who coming off maternity leave is the current GM of finance and treasurer. During Ms. Baker’s absence, James Krauter was appointed interim GM of Finance.

And there were others including the firing of veteran Chief Building Inspector, Bruce Poole, who was rewarded by winning a $1 million lawsuit against the city for wrongful dismissal. The settlement was never revealed.

You don’t need an adding machine to figure this out

It all added up in a brief two years as chaos in high places. Most citizens were left in the dark about all this chaotic fallout that affected their daily lives. This was mostly ignored by the local media.

In my opinion, the seven councillors, who vote as a bloc, are overly protective of the senior staff and coupled with the high number of closed-session meetings conducted by council, the public is shut out, shunned and used whenever it is convenient.

It is a very serious culture of entitlement and arrogance that drives the great divide between council and the people they represent. Only we the people can change it and our opportunity comes next October.

Change not only occurred at the senior civil servant level, but also was completed before the newly elected Mayor had a chance to try out the seat in his office on December 1, 2014. It was slick and self-serving move before the new administration was officially in charge.

The question arises, was the incoming mayor and council advised of these major managerial changes and increases in pay? Did the incoming council agree to this before being sworn in?

What motivated the senior management drain?

So the new council approved a budget on March 2015 that reflected the agenda of the seven member progressive majority on council.

Newly elected Mike Salisbury initiated one of my favourite observations. He proposed taking unspent 2014 money for expanding bike lanes on Woodlawn Avenue, adding the 2015 bike lane commitment of $300,000 to spend $600,000. It sums up council’s inability and failure to understand that it is illegal to move money that is unspent in one fiscal year adding it to the current fiscal year. Council didn’t seem to care they passed it anyway.

The Woodlawn job was botched and the engineer in charge left the city.

The Mayor just received his indoctrination that he cannot depend on support of the majority of this council.

The great Salary-Gate cover-up

So, in December 10, 2915, in closed-session, during the final budget approvals, we later learned that four senior administration officials including Ann Pappert, Al Horsman, Mark Amorosi and Derrick Thomson, were awarded a total of $98,202 salary increases. The trouble is they never revealed those huge increases until the provincial Sunshine List published the details in March 2016.

That’s when Derrick Thomson resigned; he received a 19 per cent increase in that secret closed-session meeting Dec. 10. In April 2016, CAO Ann Pappert, resigned and she received a 17 per cent increase totaling $37,000 taking her salary to $263,000 plus a $6,400 taxable benefit. This increase placed Ms. Pappert as one of the highest paid CAO’s in Ontario. It is noted that while only working for five months, the Sunshine list for 2016 shows she received her full salary.

During this time it was odd that Mayor Guthrie stoutly defended Ms. Pappert even to the extent that he threatened legal action against a citizen who published damaging evidence of Ms. Pappert’s performance in the five years of service as head of the city staff.

His defence of Ms. Pappert is even stranger when he knows of her involvement as Chief Executive Officer of Guelph Municipal Holdings Inc. (GMHI). This multi-million dollar attempt by then mayor Farbridge as chair of GMHI has been audited by the KPMG accounting firm. The consolidated balance sheet shows the financial losses including some $63 million in shareholder equity that is worthless because GMHI has no assets or revenues.

So why is GMHI still there?

What follows is strictly an educated theory.

The Strategic Options Committee (SOC) is part of GMHI. The current chair of GMHI is Mayor Guthrie.

Last week with great fanfare, the Mayor announced that Guelph Hydro would merge with Alectra Utilities of Mississauga. A memorandum of agreement has already been signed. The mayor claims that Guelph’s 55,000 hydro customers will witness lower rates as a result of the merger. And there’s more good news, the dividend paid to the city will increase. We learned that the Mayor would be appointed to the Alectra Inc. 14-member board of directors.

First, neither the Mayor nor Alectra have any say in what hydro customers must pay for electricity across the Province. Those rates are set by a provincial agency. Perhaps the Mayor can explain why the city will receive greater dividends as a result of the merger.

What was not discussed in the press conference were the pertinent details such as how much is Alectra paying for Guelph’s Hydro system valued at $228.4 million? What is the book value of goodwill, cash flow details, servicing the customer base, staff layoffs, value of contracts and what happens to Guelph Hydro’s $93 million in long term debt?

In my opinion, that was part of the GMHI salvage job. As I understand it, that money was loaned to GMHI by a subsidiary company of Guelph Hydro. It was in the form of two debentures with no apparent security or collateral. The debt repayment was never made by GMHI and unpaid interest alone was $10 million.

It is apparent that the interest was forgiven and the GMHI debenture debt, was quietly essentially returned to the lender, Guelph Hydro, where it now sits as a long-term debt on Guelph Hydro’s books.

Birds of a feather, flock together

This all happened because the principals, the City, GMHI and Guelph Hydro are all owned by the taxpayers. It became a garden of manipulation, sloppiness and incompetence tilled by a corrupt and secretive administration.

We should not let this occur again and vote to clean up the garden of organized deception and waste of our resources.

Now you have to ask: Is this maneuver linked to the Alectra deal? Until the truth comes out describing the details of this deal, the people cannot support it. The problem is the SOC supports it, the Mayor is effusive in his support but where do the other 12 members of council fit in when they, as our representatives, vote December 13 to approve it or not?

If you believe this proposed take-over of Guelph Hydro is in the best interests of the taxpayer owners, then re-elect those members of council who voted to approve it.

We still say: NO SALE.

 

BREAKING NEWS

Evidence has just surfaced about Alectra Inc’s expansive plan to own and control the second largest community electric distribution company in North America, is about to take over Guelph Hydro. Watch Guelph Speaks for details to be revealed soon.

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Rush to judgment: How the sale of Guelph Hydro leaves a trail of deception

By Gerry Barker

October 26, 2017

Citizens have just 47 days left to mobilize and protect their ownership of Guelph Hydro before council votes to accept the Strategic Options Committee’s (SOC) recommendation. A memorandum of agreement has already been signed between Mississauga-based Alectra Utilities and the City of Guelph, owners of Guelph Hydro.

That being the case, why is the SOC recommending and Chief Administrative Officer, Derrick Thomson, agreeing to hold “Town Hall” meetings to inform the public of the details of this agreement that has been crafted behind closed doors?

Well a funny thing happened on the way to cutting this deal.

Digging into the SOC’s own document presented June 2016 to council, here’s their timetable for investigating and recommending an alleged suitable partner to take over Guelph Hydro.

Here are some excerpts from that document so you can judge for yourselves whether this is a con job or just an unvarnished lie?

Here’s what the SOC told council last year

Phase 1 (Complete)

Explore options; begin community consultation, present findings and recommendations to Guelph City Council in early 2017.

Phase 2 (March to June)

Scan the industry for potential merger partners. Consider publicly owned utility companies likely to provide value to Guelph Hydro customers, the City and the community.

(June to fall) If City Council votes to explore further: Engage specific targets, develop a preliminary business case and financial analysis, outline impact on shareholder’s rate payers, discuss governance, compare to maintaining full ownership, and make recommendation to City Council.

Phase 3 (fall to winter)

If Council decides to pursue a merger: Enter into memorandum of understanding, announce the parties involved, continue community engagement, begin exclusive negotiations, conduct financial, legal, operational and regulatory due diligence, develop merger and shareholder agreements, finalize rate impact and make recommendation to City Council.

Phase 4 (late 2017 to 2018)

If City Council approves the transaction: submit a MAADs (Merger And Acquisition Document) application to the OEB (Ontario Energy Board) for approval, develop implementation plan and establish leadership and governance of the new utility. Following OEB approval the transaction would close, the parties would enter into the shareholders’ agreement, and the merger would be given full legal effect.

Recommended Next Steps

Given the potential cost of developing complete business cases with multiple parties, the SOC recommends developing preliminary business cases with the most promising candidates and making a recommendation to Council in early fall 2017. This approach is a cost effective way to provide Council with more information while being fair and respectful to potential merger partners.

The Guelph Hydro board affirmed the recommendations made at the outset of this report at its May 29, 2017 board meeting.

*         *         *         *

GS comment: This timetable has turned out to be a myth perpetrated by not only the SOC but with the support of the chair of Guelph Municipal Holdings Inc., Mayor Guthrie. You see, the SOC was not directly linked to city council but to the failed GMHI operation. Here’s why:

SOC Recommendation

1. THAT the Strategies and Options Committee (the “SOC”) of Guelph Municipal Holdings Inc. (“GMHI”) be directed to conduct further discussions, engage in further due diligence, and prepare preliminary business cases to assess potential mergers between Guelph Hydro Electric Systems Inc. (“Guelph Hydro”) and potential merger partners.
2. THAT the SOC continue its communications and community engagement to inform its work.
3. THAT the SOC report back to Council in early fall 2017 with the results of further discussions and due diligence, communications and community engagement and a preliminary business case, including recommendations regarding next steps.

The plot thickens

So the SOC lied about its timetable to dispose of Guelph Hydro.

Were the 12 potential partners that had indicated interest in merging with Guelph Hydro not considered by the SOC?

Why did the SOC speed up the decision by almost six months? Was the SOC ordered to do so and if so, by whom and why?

The SOC committee originally had five members: Co-chairs CAO Thomson and GMHI CEO Pankaj Sardana, now CEO of Guelph Hydro, plus Robert Bell, a member of the Guelph Hydro Board of Directors, and two civilian members who resigned.

The SOC committee was revamped with CAO Thomson sharing the chair’s job with Guelph Hydro Chair, Jane Armstrong. Ms. Armstrong replaced Mr. Sardana and two new civilian members were appointed, one of who was a former member of the GMHI board of directors.

This shuffle came out of the blue with no explanation as to why it was necessary.

The SOC functioned chiefly behind closed doors only reporting periodically to city council that went into closed session. Despite the SOC claims of engaging members of the community, most people had no clue of what was going on in regards to their property.

It is now apparent there is determination on the part of the Mayor to complete this deal before next year’s civic election. If he truly believes that this is a good deal for Guelph, then why won’t he release full details of the memorandum of agreement between GMHI and Alectra?

That’s all predicated on his decision to run again. He has denied that he has been approached by the Progressive Conservatives to run in the next Provincial election next June.

It is odd that the link with GMHI and the SOC even exists. Perhaps city council did not want to get its hands dirty if the bad stuff hits the fan. In my opinion, after tracking the history of all this, there is an unprecedented storm of civic discontent looming.

Note: The following is an informed comment in today’s guelphspeaks. ca written by contributor Colleen spelling out some revealing details of the Alectra proposal:

“The recently merged Alectra Company is four large provincial players – Hydro One Brampton, which was purchased by Alectra, and Powerstream, Enersource and Horizon. Remember Horizon? They are the ones that the citizens of Guelph did not want to partner with in 2007-2008. Here they are again. Guelph has been guaranteed a seat on the Alectra board, which will then have 14 board members. With a 4% share in Alectra it’s a pretty small seat. Customer service will not be local. Our general service customers already pay 37% less than the provincial average so they will not see any further savings. Residential customers thinking that they will save money are misinformed. They will not see an increase on the distribution portion of their bill only for a period of time. This amounts to about 20% of the electricity portion of their bill. So, what the “nothing but good news for Guelph” that Mr. Mayor is talking about? A bigger dividend payment to the City.”

 

Perhaps the city administration should inform the public of how much this project has cost so far. There was a consultant hired to steer this to a conclusion as evidenced by the content and words of the elected officials and the SOC members who are not elected.

At this stage, the public remains in the dark and judging from the secretive way this project has been conceived and misled the public, the responsibility lies with city council that must either approve it or just say no.

It is surprising that the Mayor was responsible for initially bringing the GMHI disaster out in the open and launching an investigation. But now, he is promoting this merger of Guelph Hydro with Alectra Utilities and the details are back in the closet.

This is the same kind of handling of important public issues that were masked by his predecessor for eight years aided and abetted by senior staff almost all of who are no longer with the city.

Mr. Mayor, please level with the people

Management on the Mayor’s level is complex and required patience, understanding, being tough and fair-minded, occasionally, being ruthless. Mayor Guthrie’s weakness is trying to be all things to all people. When he was elected in 2014, I told him to serve the people not the staff and council opponents.

This is a time for redemption and courage. Let’s hope Mayor Guthrie exercises both.

A good beginning is to level with the people and explain this agreement in detail. If the Mayor believes the deal is in the best interests of the citizens, then explain why in terms they understand. I know, it is tough to explain complicated deals but it is possible and with professional help, essential.

The evidence is mounting that’s creating doubt in the people’s minds.

In my opinion, I remain concerned about the link with GMHI and the Community Energy Initiative. Also the Alectra mission statement includes green energy technology development. Alectra’s promise is not backed up with precise information and management. This city has just experienced a costly misadventure in experiments with green power self-sufficiency. The price tag is a loss of shareholder equity in GMHI of some $63 million.

This is supposed to be an amalgamation of small to medium sized municipally owned electric distribution systems. It should not include dabbling in costly green power projects. History has shown alleged cost reductions linked to green power in the name of climate change are not achieved but instead, boost costs to the consumer.

This consolidation of local power distribution systems is a part of the Liberal government’s energy plan that so far has delivered the highest cost of electric power to Ontario consumers in the country.

Ontario’s leaders tore down gas energy generating plants in Oakvile and Mississauga to save four Liberal seats in the 2010 provincial election… it worked!

Then the Liberals awarded rich wind and solar power contracts to major corporations such TransCanada Pipelines.

In their rush to achieve green power at any cost, the Liberals sold 57 per cent of Hydro One to private enterprise allegedly to balance the books in 2017. That last one is a doozy as the privatized Hydro One just spent $4 billion to buy the electric generating and distribution system serving 375,000 Seattle and area customers. Most of its generating capability is coal-fired. That’s ironic in that we banished coal usage in Ontario some time ago.

The intention of Alectra to build a Green Power Technology Centre in Guelph is something we don’t need or want. Been there, done that.

Sorry Alectra, NO SALE

When it comes to Mergers and Acquisitions, Guelph Hydro is a plum to be plucked

By Gerry Barker

October 23, 2017

So, 51 days from today, on December 13, city council will vote to merge Guelph Hydro with a company called Alectra Utilities Inc., or not.

Put me in the “not” side of this.

And Mr. Mayor, please stop using the term “merge” when this is a sale or perhaps a sell-out?

There have been few details of the deal to take over Guelph Hydro. In the corporate world when two corporations merge – Merger and Acquisitions – the acquirer agrees to pay for the assets of the acquired, in this case Guelph Hydro.

Turtle Alert!

But city council, like a turtle sensing danger, goes into closed-session to discuss the details far from the madding crowd.

Guelph Hydro has $228.4 million of installed assets including wire, poles, transformers, sub stations, vehicles, buildings and a trained staff to keep the power on. In addition, in 2016, Guelph Hydro earned, after expenses, more than $7 million. Hydro pays an annual dividend of $1.5 million to the City general revenues. Essentially, this is a cash business. Customers need power and must pay for it monthly along with their city water bill.

As a going concern, Guelph Hydro is a plum to be plucked. Well run, profitable, respected with a ton of goodwill, we should not let our treasure disappear into the corporate confines of an organization of which we know little about.

So, if it ain’t broke, why the rush to get rid of it? And what are the terms contained in this memorandum of agreement? How binding is it? Or is this turkey already baked in the oven?

There’s a new boy on the block

Alectra was incorporated nine months ago, January 31, 2017. It now claims it has 1 million customers both residential and businesses. Alectra’s founder was Powerstream, the Mississauga electricity distribution system. Alectra’s head office is in Mississauga.

Most important, what’s in it for the citizens of Guelph who own Guelph Hydro?

These details are essential and must be made public ASAP so that the owners of Guelph Hydro know and understand what’s at stake pending council’s final decision December 13. City council represents the owners and has a moral and fiduciary responsibility to inform their constituents of the details of this proposal.

It’s the second attempt to sell Guelph Hydro following the failed attempt by the former mayor in 2008. She tried to convince her council to merge with Hamilton and St. Catharines power distribution systems called Horizon. She refused to tell the public the details of the deal and her own supporters refused to allow it.

It was an example of people power influencing their councillors to vote against it.

Not again!

Here we go again. But this time it is a very sophisticated plan to remove local authority over distribution of our power and give it to a company that we know little about. Please note the absence of the words “sell or sale” in presentations and news releases. It’s an attempt to not revive the 2008 public backlash when the former mayor attempted to sell Guelph Hydro.

The citizens own and operate our power distribution system that covers some 55,000 customers in the city and Rockwood.

Apparently the city heard from 14 potential partners interested in merging with Guelph Hydro. The Strategic Operations Committee, (SOC) appointed by the city, involved a five-member committee charged with seeking potential partners to operate Guelph Hydro. During its investigations, the committee team lost three members who resigned or were replaced, a development that challenges the SOC’s credibility.

Did the committee, co-chaired by Hydro Chair, Jane Armstrong, and Chief Administrative Officer, Derrick Thomson, examine all those potential partners to determine the best deal?

Jargon Alert!

We’ll never know because they won’t tell us, claiming it was “subject to advice that was subject to solicitor-client privilege.” It was another legal reason to hold a closed session meeting.

If you can’t run, just hide

Despite the Mayor and the CAO’s promise to conduct an “open and transparent negotiation process, the shareholders remain in the dark. It should be noted that early last summer, the SOC laid out its plan to merge/sell Guelph Hydro. This fall the SOC plan was to present a consolidation of the information to Council. In early spring, it was to announce its findings and allow council to vote on the committee’s recommendation.

Once again, the public is being misled. We still have little financial and operational data on why the SOC’s selection of Alectra. We still don’t know anything about Alectra or details of the deal.

Artful Dodger Alert!

What we do know is that merging Guelph Hydro with Alectra’s family of municipally owned Local Distribution Corporations (LDC) will bring millions in cash flow to Alectra because we will start paying our service charges to them when Guelph Hydro is merged. Also Alectra’s president has already admitted that there will be staff reductions of Guelph Hydro to maximize administrative efficiencies.

Attempting to read the 2016 Powerstream financial statement on its website proved fruitless. The structure of Alectra is unknown at this time. Is it an umbrella organization? Is it publicly traded? Are there shareholders? Who are the executive officers?

Why won’t the city elected representatives tell the truth about this deal? Are citizens being reimbursed for the Guelph Hydro assets? What happens to the $93 million in debt currently carried on Guelph Hydro’s books?

Confirm or deny:

Will Mayor Guthrie be named to the board of Alectra if this deal goes through? Apparently those municipal mayors who Alectra claims have joined the organization are on the Alectra Board of Directors.

If true, does this not place the mayor in a conflict of interest? How can an elected official who signs a memorandum of agreement, then votes to approve the Alectra deal while knowing that he will benefit while serving on the board of directors?

So Mr. Alectra, what’s your bid?

The news release carefully avoided what Alectra was going to pay for the system. Instead, we learn that this is not just about electric distribution it’s about generating power through Alectra’s planned Green Energy developments. Mayor Guthrie was enthused about Alectra’s intention to build a Green Energy and Technology Centre in Guelph. The mayor says it will create jobs.

Spoiler Alert!

Didn’t we just experience a disastrous green energy experience with the Guelph Municipal Holdings Inc.’s financial failure? Didn’t the Community Energy Initiative’s failed GMHI project cost $63 million in shareholder equity losses developing green power self-sufficiency in the city?

More questions about governmnet manipulation of the numbers

Doesn’t the Wynne government recommend the merger of consolidating smaller municipal power distribution corporations? But what has that to do with researching green energy issues involving personal storage of power, electric vehicles, charging kiosks etc? This smells like the stench of the failed electricity programs of the Liberal provincial government that has been so mismanaged using phoney accounting practices.

Ontario’s independent Auditor General, Bonnie Lysk, confirmed this. She charged that the accounting of energy including electricity operations in Ontario, failed established accounting practices used by public agencies throughout Canada.

The Liberal government’s promise to reduce electricity bills by 25 percent was basically built on the premise, reduce rates now and increase them in five years to pay for it.

How does that grab you?

In view of this, be aware that the Mayor is quoted that the Alectra rates will be lower than at present, and the dividend received from Guelph Hydro will increase so that more can be invested in the community.

Mayor: You mean spending this alleged newfound cash on the downtown library that is now pegged at just under $59 million. No? Then how about the South End Recreation Centre coming in at about $66.5 million.

Wait! There’s more. Don’t forget the staff revised estimate of $400 million of neglected infrastructure maintenance and upgrades required over the next 13 years. Or paying off the $34 million police headquarters renovation.

And Mr. Mayor are you predicting that selling off our power distribution system will bring great benefits to the city?

Time to show all the cards or fold them

When you carefully explain what the immediate and future benefits are to Guelph’s hydro customers, then you might be able to convince them this is a great opportunity. I’m not holding my breath.

A good starting point would be to explain the deal in detail and not parsing it behind closed doors. The first question that needs answering is how much cash is Alectra prepared to pay for Guelph Hydro?

Further, we not only lose control of our power system but also the future of the 130 Hydro employees is uncertain.

For 2018, the city staff is proposing a $90 million capital budget of which 79 per cent or $71.1 million will be spent on infrastructure. The remaining 21 per cent will be divided with $18.9 million for unspecified growth projects and $3.6 million for city building, again not specified. Council will vote October 26 to approve the staff recommendations, or not.

Tell us where does the two per cent special property tax levy go in 2018?

With less than a month and a half before council votes on selling Guelph Hydro, it leaves little time to clarify these questions and concerns. It should be pointed out that Dec 13 is the day of council’s final approval of the 2018 budget. Coincidence? It seems like great timing to simultaneously approve the Guelph Hydro sale and its potential affect on the 2018 budget.

Here’s my take on the situation. Council wants to get this off the table before the election campaign starts. The risk lies in a public backlash against those councillors who voted to accept the Alectra deal, whatever that is. It could seriously impair their ambition to run again next year.

As for my wife and I, we are opposed to any deal involving divesture of public ownership of assets in which the details have been cloaked in secrecy. Vague promises just won’t cut it.

We say: NO SALE.

 

Important Notice

If you are interested in following more details of the Guelph Hydro proposed sale, login to guelphspeaks.ca. Your comments are welcome. Join other citizens who are currently opposed to the sale, based on the lack of “openness and transparency” as promised by the Mayor and CAO. If you don’t want to post a comment on the GS website, send your comments by email to gerrybarker76@gmail.com.

Comments can also be made on Facebook and Twitter where GS posts are located as well.

If requested to remain anonymous, we accept a pseudonym with the proviso we know the name of the source and that your information will be protected.

Be reminded that Guelph Speaks does not permit profanity or personal attacks from those commenting. We do encourage debate and expression of views in the comment section.

I believe in free public participation that includes criticism of the municipal administration including elected officials and public servants

Thanks for joining the GS family. Best, Gerry

 

How our personal anxiety grows from the assault on our political conscience

By Gerry Barker

October 16, 2017

Recent political events in the U.S. and our provincial and federal governments have markedly raised our collective anxiety. It affects our beloved existence that is under siege by incompetence, Anarchistic and self-serving power blocs exercised by political leaders around the world.

In Guelph, power is concentrated among a minority of progressives who have controlled our city for the past ten years. This week, a group announced they were supporting the return of former mayor Karen Farbridge. She was defeated in 2014 for being responsible for the wrongful dismissal of Urbacon Buildings Group, general contractor of the new city hall. They were kicked off the project in September 2008. That act alone cost taxpayers an additional $23 million over the original contract of $42 million.

We’ll discuss this matter later as we commence the examination of how our anxiety levels increase and appears to be mounting over our uncertain future and that of our children and their children.

Next June 7, Ontario will go to the polls to elect a new government.

In last Saturday’s edition of the Toronto Star, a team of writers produced a lengthy Q. and A. about successive Liberal government’s handling of power and energy. It states the requirement to produce it, since 2003 across the province. The question asked: “Is electricity more expensive in Ontario than in neighbouring provinces and the United States?”

According to a survey conducted in April 2016 by Quebec Hydro, we have compared prices of per kilowatt-hour usage for residential customers in 22 North American cities. Taxes were not included and all figures are in Canadian dollars.

Montreal – 7.23 cents

Winnipeg – 8.43

Edmonton – 10.37

Calgary – 10.4

Vancouver – 10.7

Houston – 11.25

Miami – 11.67

St John’s NL – 11.96

Moncton – 12.50

Seattle -13.62

Portland OR – 13.94

Nashville TN – 14.28

Regina – 14.65

Chicago – 15.19

Halifax – 15.88

Charlottetown – 16.02

Ottawa – 16.15

Toronto – 17.81

Detroit – 20.24

Boston – 27.69

New York – 29.52

San Francisco – 31.05

Now let’s look at the details. Toronto, of all major Canadian cities has the highest per kilowatt-hour (KWH) rate for electric power. Living in Toronto costs 10.58 cents more for every KWH than what it costs in Montreal.

Ontario is the only province that uses nuclear-generated power. The reactors are located in Bruce, Darlington and Pickering and produce 61 per cent of 36,120 installed Megawatts generated by all sources in the province. This means that Ontario is generating more power than is needed, even at peak periods. The province’s power generating total is broken down with Hydro, or water generated power, 24 per cent of the total; 9 per cent is generated by natural gas plants; 6 per cent by wind turbines and less than 1 per cent solar panels.

If generating more power than we can use in the next ten years, what happens to the unused power? You cannot store power unless your home is equipped with racks of lithium batteries. Examining these data, do you agree that the management of Ontario energy, specifically electricity, is a costly, abject failure by the Liberal administrations?

So they give it away in low demand periods to utilities along the board in the U.S, or it has been reported that it is sold at below costs to other jurisdictions. Ontario’s daily power demand peaks at around 27,600 MW in mid-summer and in winter, which leaves almost another 10,000 MW to sell or give away.

Ontario is Number One when it comes to cost of power

It requires enormous management control over supply and demand. You can’t stop the fast-flowing Niagara River or shut down a nuclear plant or notify the operators of thousands of wind turbine scattered throughout the province to reduce supply. The result of this overbuilding of generation assets has thrust Ontario’s electricity costs to the highest in Canada.

In the past ten years there has been a drive to cut deals with private corporations to build wind-generating turbine farms and solar panel arrays to replace any fossil fuel fired generating plants.

This created a crisis in the cost of delivering so-called green power because the government signed rich contracts with private enterprises that were 20-year guaranteed prices of 20 cents per KWH. Their costs averaged less than eight cents. A lot of entrepreneurs got rich quickly as did many farmers who allowed the turbines on their land.

The sad fallout of this is the attempt by the previous administration in Guelph to copycat the Ontario Liberal programs to limit carbon emissions from coal-fired generating plants (now closed). The energy plans included promoting greater use of electric cars, recharging kiosks, encouraging use of power by retrofitting homes to reduce power. The crunch came when the nuclear plants supplying 61 per cent of all power consumed in the province required multi-billions in retrofitting the reactors.

The unforeseen consequences were the regulatory impediments that the nuclear-generating plants faced to make the necessary maintenance and operating changes. In the case of the Bruce reactor, now more than 30 years old, the retrofitting has taken more than seven years.

In Guelph, we know what was attempted to emulate the failed Liberal power strategy. The former mayor convinced a council whose knowledge of power generation consisted of flipping a light switch. The city-owned Guelph Municipal Holding Inc. (GMHI) headed by the mayor and selected councillors, controlled the objective of creating power self-sufficiency and offered thermal heating and cooling in selected areas downtown and at the Hanlon Business Park.

Failure started at the top

What we have learned in the past 17 months from reports by staff is that millions were lost, according to an audit of GMHI by the accounting firm KPMG. The former Mayor acted as chair of the GMHI Board of Directors.

It represented a double-edged abuse of power as all embedded checks and balances failed to stop the disastrous decisions being made by the GMHI Board that operated in closed-sessions. The public was only informed after the defeat of the former mayor in Oct 2014 as the new council opened investigations of the GMHI and Guelph Hydro combined operations.

What is the cost to taxpayers? GS estimated that taking the figures from the audited GMHI consolidated balance sheet, the shareholders equity of $63 million is actually worthless. Then, consider the $93 million loaned by a subsidiary of Guelph Hydro in two long-term debentures. We understand that any collateral or assets secured neither loan. GMHI certainly was in no position to pay the interest or guarantee the loans.

Those are the main costs contributing to the losses of GMHI. There is an item of unpaid interest on the debentures of an estimated $10 million. Regardless, right up until 2015, GMHI sent a $1.5 million “dividend” to the city’s general revenues.

Will someone please explain to me how you can pay dividends (more than $9 million in five years) and never make a profit in order to pay those dividends?

In 2016, there was a flurry of closed session activity by council to solve the debenture issue. The strategy that emerged was to transfer the debentures back to Guelph Hydro. The Hydro’s 2016 financial statement shows long-term debt of $94.3 million. Surprise!

So what’s Guelph Hydro’s long-term? The one debenture has a shelf life to 2030. The second debenture expires in 2045. To avoid a financial disaster, the two loans were transferred to the Guelph Hydro balance sheet. No foul, no penalty as the magic of accounting returns the debt back to the provider, Guelph Hydro.

But the question of the interest owed by GMHI to Guelph Hydro remains unanswered.

Poof! It’s gone, with the exception of the more than $10 million in interest never paid to the owner of the debentures (Guelph Hydro).

Because The City of Guelph owns GMHI, Guelph Hydro and its subsidiaries it’s a bookkeeping exercise like moving the deck chairs on the Titanic to get a better view of the iceberg.

The dust has barely settled and this happens

The author of all this Community Energy Initiatives is now considering running for the mayor’s position in the 2018 civic election.

Currently the Strategic Options Committee (SOC) is charged with negotiating the merger or sale of Guelph Hydro. This committee is composed of five individuals, none of whom are elected to council.

The way it works is that council provides the checks and balances of policy on behalf of the people who elected them. Unfortunately, in the past three years the majority of council defers that responsibility to the senior staff. This can be dangerous to the public interests, particularly if the staff makes recommendations that are questionable and thecouncil acquiesces.

This is part of the reason that in the past 11 years there has been little control of the people’s business and interests because bureaucrats are running the city. You will recall that of the four senior managers who received those large salary increases awarded by council, only one remains on staff, CAO Derrick Thomson.

Ironically, Mr. Thomson, on that December 10, 2015 night meeting, closed to the public, received the highest increase by percentage, 19 per cent.

Still open for explanation includes: Who planned the increases that totaled $98,202 paid to the four top managers? Which councillors voted in closed-session to approve those increases? Why, shortly after, did council, in closed session, approve bylaw 19995 to indemnify any employee or elected official if they are involved in a legal procedure initiated by a citizen or corporation? The bylaw states the city will reimburse the legal costs of any staffer or elected official in such an action.

Why was this bylaw needed? Were there other legal threats to the city that required this bylaw? I can only think of one and that ended abruptly when the city inadvertently leaked thousands of personal staff emails to the lawyer representing the claimant, Bruce Poole. The lawsuit was quickly settled in Mr. Poole’s favour.

Interesting times here in River City.

 

 

 

 

 

 

Are you ready for another four years of Karen Farbridge as your Mayor?

By Gerry Barker

October 9, 2017

There were some events this past week that confirm that our city is controlled by a political minority that has held power for the past ten years.

The most startling announcement came from a division of Innovative Guelph. Two Guelph councillors, Leanne Piper and June Hofland, were promoting an event that would feature former Guelph Mayor Karen Farbridge. Ms. Hofland is named co-chair of the event while Ms. Piper is serving on a panel with Brenda Halloran, former Mayor of Waterloo and Chris Fonseca, councillor in the City of Mississauga.

As the keynote speaker, Ms. Farbridge, a veteran of 11 years as mayor of Guelph, is being promoted to “Raising women’s voices: Overcoming barriers to Women’s participation in politics.”

The Innovation Guelph (IG) organization is hosting the meeting November 14 at the Farquhar Street offices of IG. That is to set up a campaign school known as “Guelph Wellington Women’s Campaign School” It is a collaboration of several (unidentified) Guelph community partners devoted to helping women overcome barriers and support them through the political campaign.

The promotion is titled: “Ask a female politician.”

Sounds like the Lavender Hill gang is on the warpath.

Since Ms. Farbridge’s defeat in October 2014 there has been a drumbeat of recrimination by Farbridge followers over their leader’s resounding defeat by, horrors! A man.

In years past, Innovation Guelph was a project initially financed by the city during the Farbridge term as a favourite project.

It’s mission statement is: “Innovation Guelph is building prosperity for community wellbeing by providing mentorship and business support services that help innovative enterprises start.”

So, do these lofty goals have anything to do with pure political action?

Let’s check out the composition of women members of council elected in 2010. Including the Mayor, six women were elected to city council. Along came the 2014 election and only four women were elected to serve. Three of the four are supporters of the former mayor and two are involved in the current “Ask a female politician” initiative.

What can I say? Asking the former mayor to speak at a gender-focused event to help women overcome the alleged barriers to obtaining political office is like throwing up a barricade where none exist.

Their motives are entirely sexist. What’s next, a forum for men to overcome the barriers of political office that some women claim exists?

Further, why is IG involved in sponsoring this forum that strays from its own mission statement? Is it not an organization dedicated for all people in the Guelph/Wellington area regardless of gender, colour, or sexual preference?

The program says there is no charge to attend and all genders are welcome.

Her hardcore supporters are still feeling the pain of the Farbridge surprise defeat. As for the rest of us, perhaps we may attend this self-serving soiree and ask some pertinent questions about Ms. Farbridge’s involvement in the Guelph Municipal Holdings Inc. (GMHI) fiasco.

According to the announcement questions from those attending will only be asked of the three-person panel and not the keynote speaker. Of the panel only Coun. Leanne Piper represents Guelph.

Here are some questions that should be asked of the former mayor:

* As chair of GMHI, why were most of the GMHI meetings held in closed session?

* What was the role of CAO Ann Pappert as Chief Executive Officer of GMHI for four years?

* Did she report to you as chair of the GMHI board?

* Did GMHI, under your leadership, ever earn enough revenue to cover its operating expenses and if so, from where and how much?

* How could GMHI send a total of $9 million as dividends to the city’s general revenues between 2012 and 2015 when it was operating with a deficit?

* The shareholder’s equity is listed on the KPMG GMHI consolidated audit as $63 million. What form of equity of the shareholders (i.e. the Corporation of City of Guelph) made up that $63 million and is it recoverable?

* Why did GMHI borrow $93 million in two debentures from a subsidiary of Guelph Hydro? What happened to those funds?

* Why did Ann Pappert resign ten days following the May 16, 2016 report by Pankaj Sardana that she co-signed?

* Finally, is Innovation Guelph just another tool in the former mayor’s visionary toolbox to support her pro-environmental, power self-sufficiency and sustainability agenda to Guelph?

Regardless, three years ago voters soundly rejected Ms. Farbridge’s performance in retaining power by shutting down public participation using closed-session meetings. To now participate in a meeting to have women encourage you to run and donate to your campaign is not only premature but in my opinion, politically stupid.

But perhaps the announcement makes it clear what your intentions are concerning the October 2018 civic election with the following exhortation:

“ASK HER TO RUN AND SUPPORT HER CAMPAIGN.”

Come to think about it, perhaps Ms. Farbridge is setting the stage to run as a Liberal in the June 2018 provincial election to replace the retiring Liz Sandals.

Now, wouldn’t that be special.

 

 

 

 

 

 

 

 

 

 

 

A collection of news snippets people are talking about

By Gerry Barker

October 2, 2017

How council sabotaged the property tax infrastructure levy

Last fall when the council was finalizing the 2017 city budgets, the staff proposed a one per cent special levy on properties. The levy was to pay for the backlog in needed infrastructure repairs and replacement.

Well, Councillors Mark MacKinnon and Karl Wettstein proposed that the levy be increased to two per cent with one per cent being used for “City Buildings.” Council in its wisdom, decided to postpone spending $700,000 for new parking meter heads downtown until this year’s 2018 budget, with negotiations starting next month.

Instead, those funds were diverted to help pay an estimated $3.5 million for the designing process of the proposed South End Recreation Centre projected to cost $63 million. So instead of installing the meters this year, it would have alleviated the downtown parking problems and generated an estimated $650,000 annually. They went ahead and approved preliminary funding for a major project without any prospect in the ten-year capital budget to pay for it. This is the budget that CAO Derrick Thomson admits is currently $170 million in the hole.

It is yet another case of “kicking the can down the road” with a net result that nobody wins. The city does not have $63 million for this project but MacKinnon and Wettstein have successfully committed the city to build it. Or so they may think. Isn’t this an election year coming up?

Yet this council approved spending $20 million to build the Wilson Street Parking garage that will be mostly used by city hall employees using monthly passes. Toss in the $34 million police headquarters renovation and the financial cup runneth over.

The financial hole keeps getting deeper and deeper.

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Go Figure department: Trump fiddles with the NFL while Puerto Rico perishes

Wrapping his toga around his Imperial rotunda, Donald “Nero” Trump takes on the National Football League calling the players “Sons of Bitches” who protest disrespect by certain police officers towards people of colour. His Romanesque rants came on Twitter two days after the U.S. island territory of Puerto Rico was flattened by two Hurricanes. He hardly mentioned the fact that 3.411 million Americans were desperate for the basic needs of life.

This malignant narcissist billionaire demonstrated yet again that he doesn’t care about people. Besides he said that the governor of Puerto Rico was delighted with his government’s support as was the Mayor of San Juan. Wrong! Nine days after the second of two hurricanes hit the Island, they were pleading for more help and news reporters on the scene confirmed this was a disaster of historic proportions.

Last week was a lousy one for the Trumpster. The third attempt by the Republican Congress to repeal Obama Care and replace it with a cobbled-together bill never came to a vote in the U.S. Senate. The independent Congressional Budget Office said if the bill passed, “millions” would immediately lose their health care plans. In the end, it was not even brought to a vote in the U.S. Senate because three Republican Senators said they would vote against it. In 255 days in office, Trump has failed to advance any of his campaign promises for congressional approval.

But he found time last weekend to sharpen up his golf game at his Bedminster golf club in New Jersey. His current approval rating is 36 per cent according to the Gallup Poll.

*            *            *            *

Surprise! The storm water levy revenues exceed projections

Back in July, council said it favoured rebate to taxpayers who are charged a monthly fee to maintain the city storm water system. Last year, the city Engineer, Kealy Dedman, presented a detailed plan to service the city’s storm water system. The revenue projection was exceeded in 2017’s Q2 by $600, 000.

This report prompted council to seek a rebate to customers. If any clear thinking councillor thought this out, the administrative cost to carry out the proposal could cost more than any increase in revenue.

While expectation of increased revenue makes most of us shudder because we know it is another boo-boo in forecasting budgets. Better it’s a surplus and not a deficit.

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We lose $2.5 million in recycling waste and the investigation will take nine months

The failure to reduce waste processing costs. The waste management service review report is delayed until next March.

The previous administration spent millions on collecting and processing waste to protect our environment. At the same time, the management disregarded areas in the city that did not receive the waste collection and disposal. The reasons are varied, including bad planning by the city, union work rules, incompetent financial management, terrible contracts and intransigence to fix it.

The estimated 6,000 households and businesses were forced to pay private contractors to collect and dispose of their garbage but still pay for the service through their property taxes.

Will someone explain why we spent $34 million on an organic waste processing facility seven years ago to serve the needs of Waterloo and Simcoe County? The compost produced by the plant is not available to the people who built and financed the facility.

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Trashing the city 101

The University of Guelph Homecoming Weekend resulted in students and assorted drunks trashing the city with garbage, lewd behaviour and disregard of public property standards including the right to live in a safe and clean city.

The Guelph police admitted they could not cope with the calls by citizens to put a stop to the behaviour and carnage in many residential areas where there is student housing.

Now it’s ironic that the Guelph Police Services announced its two-month “Safe Semester” program to maintain, we assume, law and order. Instead, much of the city was treated like Animal House complete with intoxication, lewd behaviour and property trashing including the University’s permanent residences.

The U of G President apologized, as did Mayor Cam Guthrie.

The questions remaining: Who was responsible, how many carousers were arrested, who cleaned it up? If the city staff had to do it, send the bill to the University.

After all these years of Homecoming Weekends and St. Patrick’s day celebrations, one would think that the Safe Semester programs in the future should include the resources to prevent such a civic transgression as this was. It calls for strict and severe penalties for carrying open carry of alcohol and use of cannabis or any other drug. It also needs a strong police presence with equipment to arrest revelers who get out of line.

The message from the top should be, this will never be tolerated again and those who ignore the law and rules of behavior will be charged and spend the night in jail.

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Don’t mess with Tuxedo, our neighbourhood cat

We live in an enclave of 22 homes where we know each other and enjoy our secluded collective lifestyle.

And we are blessed with a very unusual cat named Tuxedo. He is black and prowls the neighbourhood checking any infiltrators and gratefully enjoying the odd saucer of milk.

Tuxedo maintains a route every day to keep the chipmunk and bunny population to a minimum. He is the Great Black Hunter who wants to make his human boss proud and never hungry. Look what the cat dragged in!

This is one cat with personality. He’s our cop on the beat and the subject of many conversations driven by neighbour’s sightings and reports.

Tux is no ordinary mouser. He dropped by the other day for a lactose-free milk snack and I asked him who would win the first game of the NHL season Wednesday night: Toronto or Winnipeg?

He thought for a moment and said: “Toronto has depth but it will be close. Toronto 4-2 with Marner getting an empty-netter with 33 seconds left on the clock.”

Igasped. Where did that come from? Tux hopped down from the table and was gone.

If you are ever in our neighbourhood, look for Tuxedo. If you don’t see him he’s either sleeping off that last saucer of milk, busy stalking a squirrel or studying the Vegas odds sheets for the Sunday NFL games

This cat’s work is never done.