Let’s talk taxes, spending and accountability as the 2018 budget process starts this month

By Gerry Barker

September 5, 2017

In the fall of 2015, Guelph resident Pat Fung CA, CPA presented council with a financial analysis that compared the operating and capital spending costs of Guelph, Cambridge and Kitchener.

His information came from two sources: The official audited financial statements of the three cities and a report prepared for the city of Guelph from consultants BMA.

For his trouble he was mocked behind his back after leaving the chamber. Now you can deduce two things. Either the councillors did not understand the presentation or they didn’t want to.

This council dominated by a majority of seven supporters of the former Farbridge administration has proved to be the least responsible and effective in the ten years I’ve been covering city politics.

Recently I was sent a report about the City of Santa Monica in California. The cost of employees in this upscale community was astronomic with the assistant librarian receiving a total of $220,000 in a pay and benefits package. City bus drivers earn $109,000 in total compensation.

These two examples reflect the operation of a city council that rarely discusses spending issues in public shutting the door to debate by the stakeholders. Even as affluent as Santa Monica, there is a limit of letting city costs soar.

Does any of this sound familiar? Guelph is also an affluent community due to the high compensation packages enjoyed by an estimated 6,500 public service workers. Add to that the penchant for council to conduct their public business behind closed doors echoes the Santa Monica experience.

But when a city official claims that the per capita costs of operating the city are not relevant, you know our spending and operating costs are going nowhere but up. The last ten city budgets have growth compounding property taxes and user fees to make Guelph one of the highest taxed communities in the country.

The truth is the per capita operational costs to Guelph citizens in 2015 was $3,213. That was a 56.2 per cent increase in just seven years. It is a statistic that is relevant.

The root of this is the high cost of overhead, the cost of running the city in which 80 per cent of employees are unionized. That percentage is even higher than Santa Monica’s civic workforce.

It is a problem that city council ignores and to its peril.

Here’s a personal real life story from a pensioner.

The elephant in the finance department is the silent liability of guaranteeing payment to hundreds of former employees if the pension management of the various plans fails to meet their obligation to support retirees for life. Council cannot take away defined pensions. Because this situation has been building for years, today there are growing numbers of retired employees, many of whom retired in their mid 50’s. This has lengthened the time they can draw their pensions that in most cases are indexed.

Here is an example that our family has experienced. My wife, the widow of a deceased Metro police officer, is a member of the Metropolitan Toronto Police Benefit Fund (MTPBF). It is a closed fund for the officers who contributed to the plan and their spouses. It is closed because the City of Toronto converted its various municipal pension plans to the Ontario Municipal Employees Retirement Services (OMERS) for its police officers some 30 years ago. The MTPBF members were exempted from the OMERS merger.

The City of Toronto is sponsor of the MTBPF and is responsible to ensure solvency and payment of benefits to pensioners under the provisions of the Ontario Pension Benefits Law.

And the city has had to fund the amount of capital needed to accomplish this. More than $14 million has been added since 2014. Keep in mind there is a diminishing number of beneficiaries due to death. Eventually, as the numbers decrease, the costs of benefits reduce as well. In 1998, there were 2,430 members of the MTPBF. December 2015, there were 1,828 members, a reduction of 594 or 24.44 per cent.

It appears that the obligation of the City of Toronto to pay the MTPBF members is diminishing to the point where it will no longer have to guarantee the fund benefits. Because eventually there will be no pensioners alive to pay.

The problem is that only city council can approve any increase in the payout to MTPBF pensioners. As a result the amount paid to pensioners remained fixed for some eight years with no cost of living increase allowed.

So what has this to do with Guelph?

With a municipal staff of 2,200 of which 80 per cent are unionized and members of OMERS, there is another group of non-union employees representing a variety of managers and members of other associations.

It is this group, many of whom are senior managers working under tailored personal contracts who are eligible to have their pension payments guaranteed by the City of Guelph.

An example is the retirement of Police Chief Rob Davis. When he stepped down, he received a sick/vacation benefit of some $40,000. His indexed pension was some $130,000 upon retirement. To be fair the former chief used the rules to end his days on active duty.

This example portrays the point that the citizens are obligated to guarantee his benefits in retirement if his underlying pension system ever becomes insolvent.

Here are some suggestions to return our city to the people

* Reduce spending by staff in all areas. This would exclude police, fire and EMS. Freeze all hiring across the board including part-time and occasional staff. Specifically, demand all departments to reduce staff in two stages: Three per cent in the first six months of 2018 and four per cent in the last six months of the year. Total reduction is a 147 Fulltime Equivalent Employees out of a total of 2,200.

* Instruct legal staff to negotiate outstanding legal issues including labour negotiations to bring them to reach a settlement.

* Freeze hiring consultants for 12 months. Any exception would have to be justified by the Chief Administration Officer and approved by council. Close out current contracts.

* Instruct all departments to reduce non-staff expenses by 3 per cent in 2018. Have a staff report regarding the status of all mandated projects including infrastructure requirements and the affect on future cash flow.

* Cut city advertising and public affairs budgets, including a communications staff reduction by 25 per cent in 2018.

* Require River Run Centre and Sleeman Centre to be self-sustaining within one calendar year. These two public operations are being subsidized by the city of an estimated $783,000 annually.

* Review and suspend all public financial support of community groups until January 2019.

* Consult with the provincial government to increase the property tax deal enjoyed for 29 years by the University of Guelph to help meet the city’s 2019 financial needs. The amount is $75 per student has not been adjusted since 1987 when it was enacted.

* Suspend the Well-being funding program for one year or until a public review of where the money is being spent is completed and approved by an independent board.

* Pass a by-law to reduce the number of ward councillors to six in 2018 and make the job a fulltime position with appropriate remuneration and support. Following the Milton example of having a nine-member council, the Mayor and two councillors would be elected at large.

* Abolish the Deputy Chief Administrative Officer rank. Return to a two level system eliminating the costly DCAO designation. Replace it with department managers reporting directly to the CAO.

* Report quarterly, informing the public of the cost of all travel and associated expenses by staff and elected officials. Report all details of staff credit cards including all communications using city-supplied equipment.

* Publish an easy to understand financial summary every quarter detailing spending, new projects, budget deviations, current financial status.

* Appoint a citizen’s committee under the leadership of a qualified and respected library expert to study and recommend a public private partnership for a new downtown library.

* Form a task force composed of citizens and staff to study a public and private partnership to build the south-end recreation centre.

* Get aggressive to collect taxes in arrears and uncollected traffic fines.

* Take the necessary action to open a large grocery store in the east end of the city.

* Hold a conference with property developers and builders to explore ways and means to increase assessment through careful planning.

* Speed up the approval process for developers and new businesses.

* Provide budget support and incentives to the staff’s commercial and industrial development team to seek business and encourage candidates to settle in Guelph.

* Renegotiate the deal with Maple Reinders re operation of the organic wet-waste plant.

* Invoke a sunshine bylaw that opens all council meetings to the public. Cancel all in-camera council meetings held before the public council meeting. Exceptions would be negotiations regarding city-owned real estate, all employee contract negotiations and problems associated with employees. Council, in advance, would have to explain to the public why such an in camera meeting was necessary.

* Have the Mayor give a monthly status report on the city with an overview of finances and status of major projects. It should be real news oriented and not propaganda.

* A customer service team should be trained to answer public questions and complaints. This group would follow-up to ensure the affected department handled the query promptly.

* Abolish the present security system at city hall so that any person can enter and access council and staff at any time. This is a public building owned by the people.

* Amalgamate the response teams for police, fire and EMS to a singular administration and call centre.

* Review the operations of the fire department to reduce operations that are often duplicated by other public safety services.

* Review all bylaws with the city’s legal team to reduce the obfuscation and redundancy of current business practices.

 

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Why the 2018 budget is so important for Guelph’s future

By Gerry Barker

August 28, 2017

Let’s start by saying there are many smart people who run our city.

The problem is that the political ruling class – the council gang of seven progressives – has dominated and controlled public business for more than 10 years.

Under the leadership of former Mayor Karen Farbridge, grandiose schemes and social engineering policies have brought the city to a state of a serious financial condition. Not the least of which is the $163 million loss made by Guelph Municipal Holdings Inc. (GMHI) and its impact on Guelph Hydro.

This loss was verified in the Consolidated GMHI balance sheet audited by the KPMG accounting firm, completed last December.

Part of the $163 million GMHI losses are two debentures issued by “investors” to fund an ambitious plan to build two large natural gas generating plants to achieve electricity self-sufficiency for the city. Although GMHI purchased land to build these plants, the corporation collapsed. Because GMHI is wholly owned by the city, these debentures have been transferred to Guelph Hydro that now has a $94 million debt on its books.

There is little disposable cash available to meet the growing demands of the city. Assessment is only increasing at a rate of 1.5 per cent per year. Taxes are increasing exponentially at an average rate of 3.6 per cent per year. The city has one of the highest per capita debt rates in the entire country.

Spending remains out of control as major projects initiated by the Farbridge council have failed to meet budgets or acceptable performance. The detailed comparison of City of Guelph operating and capital spending budgets is telling. The 2015 report by Guelph resident Pat Fung, CA, CPA, compared Kitchener and Cambridge showing both those cities’ matching budgets were 50 per cent lower than Guelph’s.

There are fundamental reasons why this disparity of these two similar-sized city’s overhead and operating costs are substantially lower on a per capita basis. And yet Mr. Fung was mocked by a number of councillors after he left the chamber following his presentation. And that report was made before the GMHI audit revealed the complete failure of the former two administrations to force citizens to trust their judgment. Maybe that’s why for four years the GMHI board of directors dodged public scrutiny by holding its meeting in closed session.

The GMHI board operated like mushrooms, growing in the dark.

The GMHI board was chiefly composed of the former mayor as chair and four of her council supporters who controlled the operation. Two of those councillors are still on council, June Hofland and Karl Wettstein. Neither has disclosed any of the details of the GMHI collapse in which they were a party.

The overspending marches on. Mayor Cam Guthrie ran on the promise to match property tax increases with the Consumer Price Index. His promise was defeated in the first two months of his election by the Gang of Seven councillors who were supporters of the former mayor.

But he has accomplished some important achievements the greatest being exposing the failed GMHI Community Energy Initiative (CEI) founded in 2007 by the former mayor.

The CEI was the basis of the attempt by the former mayor to make Guelph energy self-sufficient. It was matched with a system of thermal underground co-generation piping to supply hot and cold water to a small number of buildings.

It was a colossal failure, as reports and an audit of GMHI’s operations were made public of the “initiative.” As a result, there’s a number of senior staff who left the city. Part of the reason was due to a closed session meeting of council December 10, 2015 that awarded $98,202 in salary increases to four top city executives.

Three of the four are now gone including former Chief Administrative Officer (CAO), Ann Pappert, Former Chief Financial Officer, Al Horsman, and former Deputy Administrative Officer (DCAO), Mark Amorosi. The fourth senior staffer receiving the secret increase was the current CAO Derrick Thomson.

We, the public did not discover the executive increases until March 31, 2016 when the Ontario government posted its Sunshine List of all public employees who were paid more than $100,000.

Operating a $500 million Corporation without a Chief Financial Officer

After some 28 months, the city did not have a designated CFO, although Trevor Lee has been recently hired as a DCAO taking over Mr. Amorosi’s responsibilities that includes the finance department.

The policy of constantly increasing property taxes approved last December included an extra two per cent tax levy on all city properties above the normal tax increase. Those funds were to be applied to infrastructure repairs and maintenance and city buildings. For the past ten years the increases have averaged 3.6 per cent. The exponential growth of these annual increases has created a cash box of money to fund the failed projects of the former mayor and her supporters.

Starting next month, the 2018 budget process will start. Already the staff is preparing its recommendations to council. The staff report will be the basis for discussion and provide for public input.

To say it will be the most important budget since 2007 is an understatement. Because it will occur in an election year, expect some goodies and a possible lower property tax. That’s what happened in 2010 and 2014. It’s called political survival and is the final opportunity by the 13 members of council to ensure their re-election. Or, at least that’s the theory.

I believe that it’s time for political courage and council should take the necessary steps to reduce the operating overhead of operating the city.

So, what are the choices?

There has been a fairly high turnover of staff since 2014. The biggest expense the city has is the cost of its 2,200 employees. It would be a good first step to freeze hiring for six months giving managers time to reconcile their operation to reduce costs. A real staff reduction goal of five per cent is achievable in all areas of operations. Cost reductions lies not just in numbers of employees but also in reform of operational procedures.

Hanging out there is the potential sale or merge of Guelph Hydro with another Local Distribution Company currently underway by the Strategic Options Committee. It is co-chaired by CAO Derrick Thomson and Guelph Hydro Chair, Jane Armstrong. Nine years ago, the former mayor attempted to persuade her colleagues to merge Guelph Hydro with utilities from Hamilton and St. Catharines. It was a bad idea then and it still is.

The public revolted and council voted the proposal down. In my opinion I do not believe anything has changed insofar as the current public rejection of a similar proposal. Again, the Mayor is in favour of selling the utility with current assets stated as $228 million. I see this proposed sale as a band-aid to fix a major financial problem.

Experience has shown that once council has money on the table it will disappear down the rabbit hole of personal agenda and schemes. It is impossible to repair the financial damages caused by previous administrations with an open cheque for selling an important and vital utility that pays an annual dividend to the city.

Reform city council by reducing the number of councillors to nine from 13

Another choice facing the electorate is reformation of council in the individual ward elections in which the progressives have controlled for almost 11 years. It’s a lousy system that requires amendments to make it more democratic and effective. By that I suggest reducing the number of councillors to nine, one from each ward and three councillors including the Mayor who are elected at large across the city. The present council will never agree to that, Instead the change should be included in the 2018 ballot and let the citizens decide.

Another choice that voters have is to prevent any future mayor or member of council to integrate Guelph Hydro with city operations. This is what happened with the integration of Guelph Hydro with GMHI. The mayor achieved control of Guelph Hydro that created her unwarranted full control of the financial disaster of GMHI. It must never happen again and only the voters can prevent it in the next civic election. Accordingly, we citizens should demand the cancelling the Community Energy Initiative and a wind-up of GMHI.

To assist citizens in making this happen, I suggest that Guelph Hydro dump the present appointed board of directors as of October 2018 and replace it with five elected Hydro commissioners who would elect their own chairperson.

Maintain an operational firewall between Guelph Hydro and city council

It is now essential that there must be a firewall between Guelph Hydro and its owner, the City of Guelph. The recent experience of GMHI that created long-term losses should be a grim reminder that control of Guelph Hydro should never be used again to perpetuate the will of any mayor or member of council.

Well folks, next year will be a game changer if citizens act to not only vote but also let their representatives know how they feel about the future of the city.

The greatest challenge is to seek out and persuade candidates who are prepared to be game changers to return truth to power and to the people.

Guelph Speaks will continue to report and comment on events as they unfold. Mind you, at times it feels lonely in the weird world of local media with the exception of the online paper, Guelph Today. It often produces real news stories and not the usual Pablum of rewritten city press releases instead of challenging or investigating the real issues that affect us all.

Good government is based on a system of checks and balances. In Guelph there is an absence of this because our elected representatives rarely challenge staff recommendations. Failure lies in all the closed-session meetings in which the public’s business is discussed in private often with the staff. It happens before every meeting of council and often during a council meeting.

In my opinion, the $98,202 payment to four senior managers authorized by council, in closed-session, December 10th 2015, was an affront to the public but also to members of staff. The fact that the citizens did not know of the action until the provincial Sunshine List was published four months later, only made the barn smell worse. It’s called lying by omission. And council still refuses to accept responsibility, or allow release of the minutes.

It’s something to recall in the next civic election.

Remember that all this occurred before the citizens knew about the $163 million GMHI fiasco and the losses of public money. In reality, this makes the 2014 Urbacon lawsuit that was part of the $23 million cost overrun of the new city hall, look like penny ante.

Just remember that both these projects were planned and executed by the former mayor and her elected supporters. Seven of those supporters are members of the current council.

Let’s not forget.

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U.S. NAFTA position to ‘Buy American’ could savage the Canadian auto parts sector

By Gerry Barker

August 21, 2017

The economic wellbeing of Guelph is now threatened with pronouncements by U.S. North American Free Trade Agreement (NAFTA) negotiators.

There is real concern about the future of the Canadian auto parts manufacturers. Most significant is Linamar, headquartered in Guelph, that employs 6,000 in its complex of 19 plants. The company is the largest private employer in the city and is supported by a number of smaller specialized manufacturers feeding materials and components to the Linamar parts assembly plants.

Linamar is not alone in the potential danger that may culminate in job losses and plant shut downs as the work is shipped to the U.S. Magna International is facing the same dilemma if the U.S. negotiators force auto parts manufacturing back to America from Canada and Mexico.

Both Linamar and Magna have operations in Europe and Mexico. Those plants are equally vulnerable, as the U.S. has already threatened to place tariffs as high as 35 per cent on foreign made parts. In fact, the U.S. government has already arbitrarily placed a high tariff on Canadian softwood lumber products. Canada has retaliated with support for lumber exporters with subsidies. This long-term dispute will be a major issue as talks proceed.

This issue has been fought for several years with Canada winning in the arbitration process. Today, the U.S. NAFTA negotiators are stating they want to eliminate Rule 19, the dispute mechanism system that has worked well for 24 years. Instead, they want all disputes to be conducted in U.S. courts. Canada is opposed to such a proposal that would destroy the independent arbitration system that has worked successfully.

Canada could counter with a demand to have full bidding access to U.S. and State government contracts.

There is no question that the ‘Buy American’ policy as originated by President Donald Trump, and how he fails to understand how well NAFTA works on both sides of the border. The U.S. States bordering Canada are concerned that their economies would be affected if the ‘Buy American’ policies are incorporated in a new NAFTA agreement.

And for good reason, Canada is their biggest market. Placing tariffs on Canada goods at the border would cost jobs and product shortages on both sides of the border.

The whole idea about free trade is to create greater volumes of goods moving across our border. The bigger the markets the more jobs are created.

Yet Trump told his supporters that he would shut down NAFTA in his first week in office. He described it as a terrible agreement, bad for America, one that never should have been negotiated. Since then, he has been convinced that the Trade pacts should be renegotiated.

Here’s an example of how the President pops off at the slightest rejection of his rhetoric.

U.S. wants to eliminate Canada’s supply-side management of agriculture products

The U.S. trade negotiators have told the Canada counterparts that Canada’s dairy industry’s supply-side management system must be scrapped to give U.S. producers free access to Canada markets. The present impact on Canadian consumers is that the 13,000 dairy farmers in Canada, most of who are multi-millionaires, are charging high prices and Canadians are perpetually subsidizing them.

Australia, New Zealand and a number of U.S. dairy producers have scrapped supply-side management in order to compete globally. The Canadian dairy farmers represent a tiny part of the Global market. It’s because they don’t have to compete. The producers’ lobby hard to protect their interests, not those of the citizens who pay high prices for their products.

This is the epitome of a monopoly. Shut out foreign competitors, fix prices, control supply to manipulate profits and you could own a winter home in Miami.

The supply-side management monopolies also exist in egg production, the poultry, beef and pork producers who are all benefiting from the ultimate in market protection with some tariffs exceeding 300 per cent to shut out foreign imports.

This represents a rip-off of the Canadian consumer by those producers. They have control of the supply of their products that has guaranteed inflated incomes and prices for some 30 or more years.

These monopolies are skilled at protecting their gold mines of guaranteed profits. They spend a lot of money on lobbyists to protect their interests with provincial and federal politicians. As one commentator in favour of abolishing Canadian supply-side management system’s domination of Canadian agriculture stated: “These critical trade negotiations are no place for alternative facts,” (as used by lobbyists representing the agriculture producer industries). ”

The auto parts sector of our economy is vital to the future of the country. Most are global companies that compete all over the world. Now is the time for the food supply sector to follow the lead and compete globally. If it does and spends its money on marketing globally, Canadian consumers will benefit and so will the producers.

These NAFTA negotiations could have a direct impact on Guelph in terms of job losses and industrial assessment if plants close. The city’s dismal track record attracting industry could result in greater taxes on the residential assessed community. It is one that already is carrying 84 per cent of the property tax load.

While NAFTA negotiations are just underway, the future is uncertain and scary. It could take years to complete unless any of the three parties involved walk away in frustration.

Something Canadians will never do but there is a big question mark about whether Mexico will stay the course. There remains bad blood between the U.S. and Mexico starting with the President’s promise to build a wall between the two countries and that Mexico would pay for it.

The Mexican President told Trump that the country would not pay for the wall.

But then he promised to build an economic wall between Canada and the U.S. by renegotiating NAFTA.

We’ll see about that.

 

 

 

 

 

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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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