Reviewing what the city administration won’t tell us about our business

By Gerry Barker

May 19, 2020

Opinion based on facts

In my 14 years of commenting and publishing about the Guelph administration, it occurs it may have all been in vain. It was the record of waste of public money on unsupported schemes to fit personal agendas. It was a period in Guelph’s history.

It was known as the age of the radical environmentalists controlling the city of Guelph.

In 2018, it climaxed with the election of Mike Schreiner, the leader of the Ontario Green Party, representing Guelph. He was a party of one in the Ontario Legislature.

Schreiner’s smashing victory, as reported to Elections Ontario, cost $119,864.14. It was believed to be tops in Ontario. His contributions totaled $58,090.43. That came up short of the total claim of $119,864.29. In his financial report, there was some $92,000 unsupported or identified in his campaign report

Regardless, let’s hit the launch button and review the nasty collection of secrecy, leading to mismanagement and complicity of basic operations practised by two administrations.

Fiddling with the new City Hall project between 2007 and 2008

It started with the election of Karen Farbridge and a large majority of city councillors. Recall that it was the Kate Quarrie council that approved spending $42 million to build a new city hall and renovate the old city hall into a provincial offenses courthouse.

Little did we know that eight years later when the bill was $65 million, the result of a $19.2 million dollar lawsuit brought by the general contractor, Urbacon Buildings Group, for wrongful dismissal.

It was September 18, 2008 when Mayor Farbridge, frustrated over the delays in completion of the project, ordered CAO Hans Loewig to remove them from the site. This was enforced by Guelph police. It was a sad day when pique overcame reason.

Later, new Chief Administrative Officer, Ann Pappert addressed some of the details and what steps were being taken to complete the project. She did not mention the 19.2 million lawsuit filed by Urbacon. She resigned in May 2016 and was paid $263,000 for five months work. It should be noted that in 2008, she was hired as a Guelph’s new Director of Community Services at a salary of $129,148.

Using other people’s money is the mantra of the city’s administration

In 2009, the city participated in a tripartite deal with the federal and provincial governments to spend $100 million on projects ready to start. The city then piggy-backed on top of its share spending additional city funds on unknown projects,

$2 million building dedicated bike lanes on Stone Road plus a new $75,000 time-clock in the Sleeman Centre.

Wasting money of an organic waste processing facility

In 2010, there was construction of a new $34 million organic waste processing, wet, solid waste facility. Built by Maple Reinders, who also were awarded a contract to operate the facility through a subsidiary company. The end product produced since 2011, was organic compost but was never distributed or sold to citizens of Guelph.

They only paid for a plant that had a capacity of six times greater than the feedstock produced by the city.

See if I have this right. The city finances a plant that is run by the builder and receives nothing in return because the contractor sells the finished product to nameless customers. It did not take long for other municipals, including Kitchener, to boost volumes and, we presume, profits.

Who makes these deals that totally ignore the public’s interest?

Last year, there were stories about world-wide surplus of recycable materials, the result being that the value of recycable materials faded fast. Guelph is no different. I am told that increasing quantities of recycables are being sent to the landfill.

In the midst of this, the city entered into a contract between the Rizzo Brothers in Detroit and the City of Guelph. While terms were not revealed, Dean Wyman, General Manager of solid waste resources, told city council that an addition shift was needed to cope with the increased volume of exchanging waste.

Rizzo agreed to truck recycables to Guelph and pick up solid waste destined to the landfill. It didn’t take long to discover the Rizzo materials were mostly garbage and not the promised recycables.

It was later revealed that the deal cost the city a million plus and Mr. Wyman left for a job in Edmonton.

These events were never covered in the main stream media.

2014- Mayor Farbridge is defeated by Coun. Cam Guthrie

In just over a month, the new mayor discovered the financial state of the Guelph Municipal Holdings Inc. These included Guelph Hydro, the Guelph Junction Railroad, and the District Energy Program that was a disaster.

It took some four before an audit byKPG accountatiing firm revealed a shareholder’s liability og $66 million and counting. Ut was swaxeibws as ab “impaired asset.” Could cover the payments to lenders, ever.

It was, at the time, the greatest loss by a municipality in the province.

As they say in show business, the house lights faded to black and secrecy dominated any information. Nobody was told what was happening.

Mr. Guthrie conducted a total of 84 closed-session meetings in his first two years in office. He was a man with grandiose ideas and projects. He announced that the city was entering a Public Private Participation project involving the Baker Street parking lot.

The key element was a new downtown library as the anchor for the development.

He was following the Trumpian technique of changing the narrative to get the public interested in something else

GMHI?

$34 million later and still no compost for citizens

The paper published artist renderings of the Baker Street proposal that the administration praised as revitalizing downtown.

Two events occurred in 2016-17. The first was the Mayor’s announcement that the Baker Street project was dead. The city announced the appointment of a special committee to investigate the option of disposing Guelph Hydro. The Special Options Committee (SOC) was composed initially with CAO Derrick Thomson and Pankaj Sardana, Guelph Hydro CEO as co-chairs plus three civilian members.

The investigation started in a series of closed-sessions that denied public participation of a major asset until February when a leak occurred.

First, what options were included in the SOC mandate? There was a merger with

another muncipally-owned Power distribution system. Then the option of dealing Guelph Hydro to a large power distribution corporation; the selling of the utility on a first-come basis.

The SOC committee was restructured with co-chair Mr. Sardana by Guelph Hydro chair Jane Alexander. Mr.Puccinni resigned. Later, we learned he protested the selling of Guelph Hydro that had been decided in closed-session.

No reason was given following the leak.

The whole process was operating in a closed-sessions vacuum. But things were happening and some six months later the Mayor announced the merger with Alectra Utilities and Guelph Hydro were almost complete. The city staff was employed to set up town hall meetings and phone surveys to support the merger.

The only thing missing were the details.

I sent an extensive questionnaire asking the opinion of councillors and why they would support it. I did not receive one reply. However, the mayor replied and among other things, said the merger was a give away of Guelph Hydro with a 2016 book value of $226 million.

Regardless, despite 22 delegates’ submissions to slow the process to allow public participation, city council by a 10 to 3 vote, agreed to the merger with no discussion.

Here’s my opinion. GMHI was in a bind with a loss of $66 million in lost shareholder value. Also, the debenture holders – Guelph Hydro Electric Sytems Inc, operators of Guelph Hydro, loaned GMHI more than unsecured $90 million, in debentures.

To make this work, the city would declare the $90 million Hydro loans as an impaired asset of GMHI. It had to maintain GMHI as a city asset and write it down over time.

This opened the door for Alectra to receive the assets of Guelph Hydro without paying a penny.

The city also had the $66 million GMHI impaired asset to also be written down over the years.

.Today,a GMHI lives and the promised annual share of Alectra Utilities profits are delivered to GMHI. How much was that dividend in 2019

.That’s only part history of major league bungling of our administrations.

 

 

1 Comment

Filed under Between the Lines

One response to “Reviewing what the city administration won’t tell us about our business

  1. DAVID BIRTWISTLE

    Hopefully the current Ontario government will resurrect the use of incineration of non-recyclable waste.This should be done on a regional basis that designates municipalities who can use the incinerator(s) nearest their location

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