Tag Archives: Alectra Inc.

Only four days left to intervene in the merger of Guelph Hydro and Alectra Utilities by the Ontario Energy Board

Breaking News: As the April 30 deadline approaches regarding the Guelph Hydro merger, we have been accepted as an intervener in the OEB process. We are publishing our letter and arguments against the merger for citizens to view. Please use whatever parts and send a reques to the OEB to be named as an intervener. It is our last chance to stop this application or at the least, delay it until a new provincial government reviews the application. GB

John T.F. (Gerry) & Barbara M. Barker

271 Riverview Place

Guelph, ON N1E 7G9

Ontario Energy Board

300 Yonge St.

27th floor
P.O. Box 2319
Toronto, ON M4P 1E4

April 16, 2018

Re File: EB-2018—0014

Request for intervener status re the file EB-2018—0014

We are 15-year residents of the City of Guelph and customers of Guelph Hydro and are property taxpayers.

We urge the Ontario Energy Board to order an oral hearing of this application based on the “No Harm” test. Evidence of this came last Friday when ther OEB released a summary of the proposed merger of Alectra Utilities and Guelph Hydro Electric Systems Inc.

  • The purchase by Alectra Inc. of all the issued and outstanding shares of Guelph Hydro Electric Systems Inc., held by Guelph Municipal Holdings Inc.

By way of explanation, Guelph Hydo is a financially sound profitable division of Guelph Muncipal Holdings Inc. The Corporation has a sterling record of service and performance. GMHI is a wholly owned subsidiary of the City of Guelph Corporation.

In order to make our arguments clear, we have attached a recent report on why and how this happened.

Our principal objection lies in the conduct of a city appointed committee known as The Strategies and Options Committee, that conducted almost all of its business in closed-sessions. The public finally was informed 12 days before the council meeting to approve or disapprove the Alectra proposal to merger. This document was 245 pages long and only available online with the exception of a few hard copies that were downloaded. We were fortunate to receive a hard copy.

To us this represents the height of suppression of the public’s interest. On December 13 there were 22 delegates speaking just five minutes each, expressing their reasons for opposing the merger. In addition the City Clerk reported a protest petition of 76 residents.

There were seven representatives of Alectra that addressed the meeting. Council approved the merger in principal six hours later by a 10 to three vote.

Thank you,

John and Barbara Barker

*            *            *            *

Attachment – Edited from the post on guelphspeaks.ca, April 14, 2018

Updated HED -We have just five days left to intervene in the Guelph Hydro-Alectra merger deal now at the Ontario Energy Board

By Gerry Barker

April 16, 2018

Since last November, guelphspeaks.ca has questioned the merger between Alectra Inc. and Guelph Hydro. The proposal by the Strategies and Options Committee (SOC) was railroaded through council despite opposition from 22 delegates to council opposed to the proposal plus 76-email protests sent to the city clerk.

None of it mattered, as council approved in principal the merger agreement by a 10 to 3 vote in the early hours of the morning. That was December 13, 2017.

I have been informed that Alectra and Guelph Hydro submitted a written agreement to the Ontario Energy Board, (OEB) for final approval. A statement followed this that the details would be produced in the local Tribune twice-weekly paper. This week there was no such statement in the paper.

Also, the publicly paid “City News” carried in the Tribune had zero information, not even a news story explaining the merger application details.

Do you really believe the people affected have “Your Say” in this?

After all these months the truth is out. Before going into the details, it is important to remember, this merger was concluded in many secret, closed-session meetings that ignored the real feelings of the 55,000 Guelph Hydro customers. The December Hydro bills contained a small biased insert just days before the council vote.

They were never told the truth about how it would affect them.

The OEB has received a request from Guelph Hydro and Alectra Utilities to submit a written application to approve the merger. The OEB has acknowledged receipt of the request.

So, here’s the current situation. We have just 14 days remaining to intervene and request an oral hearing with the OEB in which citizens, registered as interveners, can state their views,

If not, the OEB will accept the written submission of Alectra and Guelph Hydro and make a decision between the next six and 12 months.

After April 30, if we do not intervene, as is our right, the merger could be approved by the OEB.

This Mergers and Acquisitions program (MAADS) was initiated by the Kathleen Wynne government’s ‘recommending’ absorption of small to medium sized community owned hydro distribution systems to create efficiencies.

This opened the floodgate for large power distribution corporations to fatten their portfolios at little capital cost or debt.

By June 7, that policy may be history with a change in government.

The rush here by Alectra-Guelph Hydro is to ensure its proposal is “grandfathered” regardless of the outcome of the election.

The OEB has invited interested parties to “Have Their Say” stating that is their right. The Board has stated that there are two types of applications:

A written application has already been submitted and an oral application in which members of the public can present their objections to the application by Alectra Utilities and Guelph Hydro.

But here’s the catch: “You can become an active participant (called an intervener). Apply by April, 30, 2018 or the submitted written hearing will go ahead.”

That seems clear enough but why did it take more than a month to reveal the written merger agreement that was received by the OEB on March 7, 2018?

Why did the City Solicitor, Christopher Cooper, side step my request in early March when requested, for a status report on the final agreement?

So the people directly affected by this merger agreement have just 14 days to apply for an intervener status at an OEB oral hearing.

Finally, here is the evidence that our Guelph Hydro Electric System is being given away with no cash consideration in exchange for a tiny 4.63 per cent of only 60 per cent of Alectra Utilities’ profit. This corporation is a division of Alectra Inc.

It doesn’t take rocket science to figure out that our citizen-owned power distribution system, serving 55,000 customers, worth an estimated $300 million, is being exchanged for a tiny slice of Alectra Utilities’ profits. Is this what the Wynne Liberals were counting on?

As activist, taxpayers and communicators, we want an open administration, accountability, and transparency in our city government. It was promised in 2014 but never delivered. We can charge city council for allowing this deal to reach this absolute level, the last line of defence, public participation.

Here is a capsule of the terms of the agreement as published by the OEB:

“Alectra Utilities Corporation and Guelph Hydro Electric Systems Inc. have asked the Ontario Energy Board to approve:

  • The purchase by Alectra Inc. of all the issued and outstanding shares of Guelph Hydro Electric Systems Inc., held by Guelph Municipal Holdings Inc.
  • Transfer of Guelph Hydro Electric Systems Inc.’s distribution system to Alectra Utilities Corporation • Transfer of Guelph Hydro Electric Systems Inc.’s generation licence and rate orders to Alectra Utilities Corporation
  • Amendments to Alectra Utilities Corporation’s electricity distribution licence to include Guelph Hydro Electric Systems Inc.’s service area

The applicants say that the proposed amalgamation is expected to deliver savings to the customers of both utilities and that the rates of Alectra Utilities Corporation and Guelph Hydro Electric Systems Inc. will remain separate until 2029. The applicants also say that the costs of the proposed amalgamation will not be funded by ratepayers.”

Let’s dissect the terms as acknowledged by the OEB.

Whopper #1

Comment: First, it states this is a ‘purchase’ of all the issues and outstanding shares of Guelph Hydro Electric Systems Inc., held by Guelph Municipal Holding Inc. (GMHI).

It does not reveal the truth of the value of GMHI including shares that blew through more than $60 million of shareholder funds (the people of Guelph) and its shares are essentially worthless without Guelph Hydro.

So, what is Alectra paying for these worthless GMHI shares? More importantly, who winds up owning the title of the Guelph Hydro Electric Corporation? It appears so far, it won’t be the owners.

This GMHI information is confirmed by the independent audit by the accounting firm KPMG in which the GMHI audited consolidated statement showed the shareholder equity was worthless. But GMHI did control the financially healthy Guelph Hydro Electric Systems Inc.

This take-over of Guelph Hydro made by the former GMHI board of directors, chaired by the former mayor, posed a serious financial problem for council.

There are two assets helpd by GMHI: The Guelph Junction Railroad and Guelph Hydro.

Guelph Hydro represented a solution and became the bargaining chip to get out of that GMHI multi-million dollar debt.

This is how the merger cover-up began. The deal was not about Guelph Hydro, it was about the city administration divesting itself of an asset to get that $60 million GMHI deficit off the city books.

That’s why in February 2017, the Strategies and Options Committee removed the option of selling Guelph Hydro. This opened the door for this terrible deal to give Guelph Hydro away for a pittance and in one stroke clean up of the GMHI balance sheet for which the city was responsible.

The key word in this description of the take-over is Alectra assuming all the “issues” surrounding not only Guelph Hydro but also its ‘controller’ GMHI.

Here’s Whopper #2

The submitted agreement states that Guelph Hydro’s distribution system is “transferred” to Alectra Utilities with no apparent cash consideration. Guelph Mayor Guthrie keeps saying that nothing is being given away. Well sir, you’d better check the agreement you and Alectra have already submitted to the OEB for approval. This isn’t about semantics it’s about real money

Nowhere in this agreement summary released by the OEB does it mention the $18.5 million special dividend that upon approval will be paid to the city. This dividend is already the property of the citizens of Guelph. It is part of the $22 million cash reserves stated in the 2016 Guelph Hydro audited financial statements.

There is nothing more insulting than to be told the city is receiving the dividend that is nothing more than a subterfuge to disguise what is really happening. Our greatest asset, Guelph Hydro, is being sacrificed to cover-up the mistakes of the previous administration and current Guthrie administration

Now we know why this terrible deal, masquerading as something best for the 55,000 Guelph Hydro customers was conducted behind-closed doors to suppress public participation. The use of phony surveys, misinformation and town halls attended only by a handful of supporters to bolster the case, witnessed spending $2.36 million to sell the proposal to the public.

Oh, the agreement states that the ratepayers will not fund the costs of the proposed amalgamation.

Was the OEB board informed before publishing this agreement summary that the citizens of Guelph have already spent $2.36 million to fund this deal and sell it to the ratepayers?

Here is more about the agreement now registered with the OEB.

“The applicants say that the proposed amalgamation is expected to deliver savings to the customers of both utilities and that the rates of Alectra Utilities Corporation and Guelph Hydro Electric Systems Inc. will remain separate until 2029. The applicants also say that the costs of the proposed amalgamation will not be funded by ratepayers.

That’s Whopper #3

Your application to intervene should include the following as it applies to your feelings about the merger agreement:

“In assessing the application, the OEB will apply what is called a “No Harm Test”. This means that the OEB will be considering whether customers would be harmed from the perspective of rates, reliability and quality of service in a merger. To pass the No Harm Test, evidence must be provided that rates and service levels would be equal to or better than what they would have been without a merger.”

Well, we now know as revealed by the OEB release, that great harm has been done to the owners of the Guelph Hydro power distribution system such as losing ownership and control.

* The assets are being turned over to another operator with no encumbrances, who have made promises to provide equal or better rates and services, jobs and a green technology centre to be set up in the Guelph Hydro headquarters facility.

* We will lose 30 to 50 jobs if the agreement is approved and the green tech operation will have a staff of ten.

How can the OEB approve an agreement in which a financially sound and dividend paying corporation is being given away? It’s a win-win for Alectra Utilities because the former Guelph Hydro will still supply those dividends that Alectra will be required to pay GMHI. It’s just under another name.

We respectfully urge the OEB to order an oral hearing to give the stakeholder’s an opportunity for the board members to understand how our excellent Guelph Hydro that has served us so well over the years is being given away.

Perhaps, the truth of how and why this merger agreement was created and executed can be questioned and find it is not in the best interests of the owners of the utility.

Please, Do No Harm.

 

 

 

Advertisements

Leave a comment

Filed under Between the Lines

The Guelph Hydro merger with Alectra is aimed at 13-city councillors poised to give the $300 million utility away

By Gerry Barker

November 30, 2017

At a recent closed-session council meeting there was a memorandum of agreement signed between city council either Alectra Utilities or Alectra Inc..

Only one councillor voted against it. We are not prepared to reveal the name but we can say it was not the councillor who voted against the motion. Because of the threat that a councillor revealing the result of any decision made in closed-session, that individual could be charged under the code of conduct placed on members of council.

Yes folks, this is supposed to be a transparent, open and democratic civic government.

The shocker is that council went ahead and voted for a deal of which they knew little. They voted on the recommendation of the Strategies and Options Committee (SOC) composed of five non-elected members. Council was not involved in direct negotiations and will be informed of the final agreement Thursday, November 30.

Shearing the sheep

Who are they? Sheep ready to be sheared?

So, several people have wondered what is the rush to approve this on December 13.

Here are some of the reasons:

Alectra wants this utility because it is well run and strategically located for its expansion plans into southwestern Ontario. And, they’re getting it for an undisclosed share of the Alectra profits. This is the most unbelievable one-sided deal in the city’s history.

Alectra get a $300 million power distribution system for a super minority share of Alectra’s profits.

And the majority of council apparently agrees to this?

The concern is that a new government in Ontario will make a number of changes in the generation and distribution of power. The Progressive Conservatives have already announced they will cut power rates by 12 per cent on top of the Wynne government’s cut of power costs by 25 per cent. If this keeps up, electricity will be free.

Wrap it up

Alectra wants it wrapped up before the June 7, 2018 provincial election because there may be changes in the merging of Local Community Distribution systems (LCD).

Presumably, the merger would rid the city of Guelph Municipal Holdings Inc’s hard liabilities including the two District Energy pumps in the Sleeman Centre and the Hanlon Business Park and their contracts. That’s an $11.4 million wasteful project.

There are a number of questions that have been raised concerning the benefits to Guelph citizens, the decision-making history that was mostly conducted in closed-session. Each councillor received a copy of the questions sent last week, but no response.

The result is a total lack of financial details of the merger.

No information was provided regarding the performance of the members of the Alectra consortium. Don’t you think that should be a concern of city council? How is this working for Barrie, Simcoe County, Markham, Vaughan, Mississauga, Hamilton, Brampton, and St. Catharines?

Don’t you think that knowledge of Alectra operations would be an important part of the decision about to give away a $300 million asset?

One that didn’t work out

Here is one experience of what happened when Alectra tried to take over an LCD

Collus power was a 50/50 ownership split between Collingwood and Alectra. Collingwood decided to sell their 50% and Alectra submitted a bid. They did not win, part of the reason being that dividends were not paid as promised.

And Council wants to merge Guelph Hydro with Alectra based on this report? More to the point, apparently Alectra is known to buy LCD’s or in this case failed to buy the other half of Collus because they failed to pay the promised dividends.

So, why don’t they just buy Guelph Hydro?

The omission of the facts of such a merger, including increased customer service charges that allegedly doubled, once the LCD candidate joins the Alectra group. Also, the impact of increasing distribution costs throughout the system that Alectra can levy its retail customers at will.

Ah! The unintended consequences of promises made but not fulfilled. Once the deal is approved, Guelph’s 55,000 Hydro customers have no recourse to bail out of the deal and no control over the increased costs they will have to pay.

The impact on so many Guelph Hydro services to its customers seems to be ignored by council.

Again if you don’t know the impact costs why are you buying into the deal?

Yet, despite this lack of important merger information to which the stakeholders were entitled, their representatives went ahead and voted to give Guelph Hydro away. If the vote on the memorandum of agreement stands up December 13, they will formally approve the merger without informing their constituents of the real reasons why and explain the benefits to customers. Our only hope is that the people rise up and protest to their councillors.

Just Ask Us Anything

The selling of this crock is a sick joke. “Just Ask us Anything” promotion on the website, energizingtomorrow.ca was deliberately designed not to provide answers because the people answering it didn’t know anything about the actual details of the merger.

All the materials linked to the promotion of the deal were carefully scripted to ensure the real details did not leak out.

It was a lie and city council allowed it to happen. It abused the public trust and if it is approved there will be a price to pay next year.

The wisest choice council should made is to defer the final decision until the owners of Guelph Hydro are informed of the details and are equipped to approve or disapprove the merger.

That’s the way democracy is supposed to work.

Why should the public care about Alectra’s motives and sense of urgency?

Send in the Clowns

This would have gone a lot smoother if the SOC had fulfilled its mandate and presented the full story concerning the merger. Instead it accepted a contrived presentation designed to influence only 13 councillors. They didn’t care about the citizens who own Guelph Hydro.

Judging by the vote result in signing the memorandum of agreement with Alectra either the councillors were duped by those smooth talking big city boys or they were afraid to make the right decision to protect their constituents.

Is this an adult daycare?

Nobody would blame an elected official for being thoughtful, respectful and honest.

It’s a great responsibility.

But when a councillor decides that the public does not need to know its public business, then our democratic systems crumble.

If you don’t know what you’re buying, why buy it?

NOTE: Sign up to send a petition to Council if you are opposed to this merger. Forward a note asking to be added to the list to gerrybarker76@gmail.com  Please include your name, address and ward for verification only.   Thank you.

NOTE: If you missed thr list of questions asked of council, click on the top of this post for connection: Why is Guelph Hydro merging with Alectra Inc. without answers before council approves it December 13?

 

 

14 Comments

Filed under Between the Lines

There are great expectations by the Mayor of giving Guelph Hydro away

By Gerry Barker

November 17, 2917

You can’t help but wonder what happened to Mayor Cam Guthire in the past three years?

His determination to trade Guelph Hydro for four to five per cent share of Alectra, a consortium of Local Community Distribution (LCD) corporation that it has been assembled. Apparently this is based on bigger is better — but for Guelph?

Is the Mayor smarter than the rest of us?

Well, lets dissect the Seven “Facts” (his words) that he is publishing online to residents. Keep in mind the city has admitted that it is spending $2.36 million to sell this merger with Alectra to citizens. Then the administration says the publicity program will be funded by the so-called Guelph Hydro dividends sent to the city annually.

What’s wrong with this picture? Guelph Hydro is a profitable, well-run utility. Its revenue is almost entirely provided by the 55,000 Hydro customers. It’s one of the illusions that the Mayor fosters in his remarks about the seven “facts” about the merger.

He claims that more than a year has been spent studying the sale or merger of Guelph Hydro. So why are the final negotiation details not being revealed until November 30? The meeting will be held 13 days before council’s final approval or not, as it may turn out.

My information is that the mayor is recruiting, aiding and abetting council’s approval by siding with the gang of seven whom, I’m told, most are in favour of the Alectra Merger which bespeaks of their understanding of the deal.

The Mayor claims “Guelph will benefit from rates that will be better than they’d be if Guelph Hydro remained on its own.” Well, that’s not true. The rule of mergers between LCD’s, freezes the power costs to consumers for ten years. In Guelph’s case it is reported the amounts to a reduction of $40 a year.

The Mayor is mixing apples and oranges here. If this merger is approved, operational

control of Guelph Hydro will be assumed by Alectra. Once that happens, Alectra controls the costs of distribution of power to its consortium. Guelph customers will have no say.

Let’s move on to examine the seven “facts” presented by the Mayor.

Fact 1 – Comparing historical rate increases does not tell the story.

GS Comment – The Mayor is right that no two electric utilities are the same for a number of reasons. But Guelph Hydro has been judged by the government as one of the best run in the province. Again, what are the specifics to accept or deny this merger? What’s in it for the citizens and customers of Guelph Hydro?

This is a decision that we are being asked to support, in a month and a half that will affect the city far into the future when those approving it on council will not be in office.

Just wondering: Why did the Strategic Options Committee (SOC) in closed session last February, remove the option of selling Guelph Hydro from it’s mandate to investigate both merger and sale of the utility? Also, were other interested parties in purchasing Guelph Hydro considered?

Fact 2 – Savings for everyone in Guelph

GS Comment – Consolidating “our business operations” Guelph and Rockwood customers will avoid an estimated 5 per cent distributuon rate increase by 2021 and another estimated five per cent increase in 2016.” The basic information supporting this claim is not revealed nor are the savings to hydro customers.

The Mayor talks about the “potential” savings to the customers but will take years to be beneficial. The day this merger is approved is the day we lose control. The dependence on the Ontario Energy Board to protect our interests and increase dividends to the city counts for nothing. The Mayor cannot assure the citizens that this merger will be beneficial.

On a personal note, we have yet to receive any information outside of the social media world, any pronted information that details what this merger means as customers of Guelph Hydro. Not in the 13 years, we’ve lived here that included the abortive attempt to sell Guelph Hydro in 2008 to Hamilton and St Catherines.

This whole exercise is aimed at the 18 to 44 demographic by sending their message on the Internet. It excludes all thos folks who do not own or use a computer but are voters and customers of Guelph Hydro.

Fact 3 – Rates for busineses in Guelph

GS Comment – Rates for commercial/industrial power users are 39 per cent lower than that of Alectra. So the Mayor states that he expects the Ontario Energy Board would permit Guelph to operate as a “separate rate zone and commercial distribution rates would continue to be lower.” That’s called betting on a long shot with the potential of coming in last..

Next week, guelphspeaks.ca will publish an open letter to the residents of Guelph that is an unbiased report concerning the pro’s and con’s, of the Guelph Hydro/Alectra proposed merger. The author is an Energy Lawyer, Jay Shepherd, who has written extensively about all aspects of Ontario’s power, supply, distribution and government policies.

Fact 4 – Customer service and response time

GS Comment – Despiter the mayor’s claim that he has heard from the community of their concern about customer service and reliability, the minute that he signs this agreement, he cannot guarantee anything. In fact, Guelph Hydro’s record in those two key areas is among the highest in the province with an above average rating in the 90 per cent range well above the provincial average.

The quality of operations and the staff perforamance reflects the evidence that Guelph Hydro is well run and profitable compared to most municipally owned power utilities. Perhaps when a more careful investigation is conducted, Guelph Hydro may be part of a like-minded grouping of LCD’s where customer interests will be considered and transparency will prevail. What’s the rush?

Fact 5 – Who owns Alectra?

GS Comment: As best that can be told there are two Alectra’s. These are Alectra Utilities and Alectra Inc. the one that was incorporated January 31, 2017.

In its press releases, Alectra does not distinguish the roles of the two corporate entities. Apparantly in publishing the “facts” about who owns Alectra, the Mayor apparently cannot figure it out either.

Alecrta Inc. states that it is a publicly-owned utility formed this year. It is like a landlord that owns Hydro One Brampton that it purchased, and the rest of the Alectra family are partners. By agreeing to merge with Alectra turning over municipal control of each member’s power operation, we lose control.

“Following a merger, Guelph would join this list of municipal shareholders. We would continue to have an important say over hydro decisions affecting our community and we will continue to receive annual dividends we can re-invest towards community initiatives,” states the Mayor without attribution.

Here are two giant stretches of the truth. How can Alectra Inc. claim the members of its LCD consortium are publicly owned when Alectra has control? If Guelph council signs this agreement, say goodbye to Guelph Hydro in return for a miniscule share of Alectra’s profits, if any.

On the increased dividends that the mayor claims as fact, what assurances will the city receive of any increased profit? We’re facing giving up our power distribution utility for what? What’s even worse the chances are we’ll never know anything about the corporation that wan’t to control our property without any recource.

There is one thing we’ve learned about Alectra. It has borrowed some $225 million from a number of power utilities in British Columbia, Alberta, Manitoba, Quebec and New Brunswick. The mayor has steadfastly said that the Alectra deal is not a sale and that the out of province investors are not shareholders but only receive interest on their investments.

Summarizing: Guelph city council is negotiating with a corporation that has not been in business in Ontario for a year; a corporation that has borrowed $225 million from outside Ontario for unknown reasons; there is no reconciliation of the share of Alectra that Guelph will receive. As Alectra grows in its consolidation spree, what effect does this have on Guelph’s proposed share?

Would you buy a used acr from these guys?

Fact 6 – Jobs

GS Comment – The Mayor says that Guelph Hydro employs 130. He then says 70 per cent of those people would be unaffected by the merger. Doing the math, 91 employees, chiefly the technical staff, will remain. That means 39 staffers could be vulnerable unless they want to commute to Mississauga.

Alectra says that it intends to set up a Green Power Trechnology Centre in Guelph that will create a number of good-paying jobs. Key word: “Intends.” Perhaps former Mayor Karen Fabridge may head it up as she has a lot of experience in Green Power.

These “Facts” presented by Mayor Guthrie, are not facts at all. Instead, the real facts are hidden from the owners of Guelph Hydro as final negotiations are conducted in closed-session. If and when the real financial and operational facts are made public, then council has a fiduciary reponsibility to oppose the merger.

Fact 7 – Have your say

GS Comment – It is strange why the city spending $2.36 million to convince citizens this is beneficial to them, their children and their children. It has been a designed program to influence the citizens into believing it’s a good deal, and it’s without public debate with the principals. Put it this way, when a developer applies to build an apartment building in Guelph, are not the citizens living nearby informed of the plans and the affect on the neighbourhood?

So why is this Alectra deal any different? The owners, the citizens, are deliberately being kept in the dark. The Mayor’s “Facts” do not meet the standard of transparency or public participation in the city’s business.

So why is he so convinced Council should approve this merger

6 Comments

Filed under Between the Lines

We are being fed pablum and baloney concerning the Guelph Hydro proposed merger with Alectra Inc.

By Gerry Barker

November 13, 2017

The pablum is a metaphor for our innocence and naïveté. Similarly, the baloney is the shallow approach to take over Guelph Hydro leaving out the pertinent details that justifies the Alectra Inc. merger proposal.

Confused? You are not alone.

In last Tuesday’s weekly paper, guest columnist Bob Bell, (no kin to Coun. Bob Bell), identifies himself as vice-chair of the Guelph Hydro Electric Systems Inc. In it he stated the reasons why this merger with Alectra is a win-win for the 55,000 hydro customers.

In reality, this merger proposal is more like a Chinese fortune cookie. You never know what the message is inside. That folks, is what Mr. Bell, a member of the Strategic and Options Committee (SOC), is selling. Here are some samples:

He says the SOC was “tasked by Guelph City Council” to review the options for the future of Guelph Hydro. This committee was formed in October 2016 and its mandate was to consider the sale or merger of the city-owned public utility.

Here is the fortune cookie example again. Just four months on the job, the SOC membership changed leaving only CAO Derrick Thomson and Hydro vice-chair, Bob Bell as originals. In February, a few days after the incorporation of Alectra Inc. January 31, 2017, the decision was made by the revamped SOC, to take the selling of Guelph Hydro off the table and concentrate on just merging the system.

In my opinion, this proposal was already in the oven and citizens had no information or confirmation of what the SOC and Alectra were cooking. And right now we still don’t know the details of this deal.

Here’s flashback for you: It’s June 2013 and Mayor Karen Farbridge, as chair of Guelph Municipal Holdings Inc. (GMHI), releases the 2012 annual report. In it she says that a priority of GMHI was to research the potential of merging Guelph Hydro with another municipal utility. That year GMHI lost $2 million, a figure that was not included at the time but learned later.

Well, the cookie crumbled in 2014 when Cam Guthrie defeated the mayor. Since then, the financial and managerial disaster of GMHI under the leadership of Ms. Farbridge, has taken three years to unravel, well almost.

Trying to put the GMHI Humpty-Dumpty together again

A key point pressing the GMHI wrecking crew charged with putting the pieces back together, was about the money spent by the Guelph Hydro subsidiary company, Envida Community Energy. Envida was the construction company charged with building the GMHI solar panels on public buildings, District Energy pumps and the underground thermal energy system installations. The resulting debt was transferred back to Guelph Hydro that declared a $93 million long-term debt on its books in 2016.

Keep in mind that these funds are all coming out of our pockets.

The consolidated audit of GMHI by the accounting firm KPMG confirmed this debt borrowed by GMHI included two debentures totaling $93 million but also the evaporation of $63 million in shareholder equity in GMHI.

Yep! It all comes out of our pockets.

It remains possibly the worse financial meltdown in the city’s history.

Now, the mayor is pushing to join our Hydro distribution system with an organization of dubious credibility and no financial track record.

Guelph Speaks has learned that even by giving Alectra its $228.4 million in installed transmission equipment, apparently Alectra will not assume that $93 million debt.

As both parties, Alectra and Guelph city council, munch through the fortune cookies, Chairman Bob Bell spins a yarn of possibilities, promises and assumptions. Comparing this proposal is nothing but a sales pitch, not fact-based for responsible consideration.

Note: On Thursday November 16, guelphspeaks will publish the 2,600 word neutral dissection of the proposed Alectra merger. Energy lawyer Jay Shepherd, of Toronto, writes an open letter to Guelph residents. He explains details of the problems facing mergers of Ontario’s municipally-owned power distribution corporations.

It’s a factual assessment that should clarify the unknown facts about this merger deal. His conclusion is interesting.

Mr. Bell writes that Alectra will bring “reliable services maintaining local jobs, investing in the community and focusing on environmental sustainability as top priorities.”

But isn’t that what Guelph Hydro does now?

Then the Bell guest column goes on to say: ”That after careful review of all options, “the committee recommended to Guelph city council that Guelph Hydro merge with Alectra.”

That’s it? Are we out of cookies?

When the people’s business is done behind closed doors

The first thing we have to remember is that the SOC and city council meetings are conducted in closed-session. What is preventing city council or SOC to openly reveal their “careful review” of all options for supporting this merger?

Mr. Bell claims that the city will still retain ownership of Guelph Hydro. “Under the proposal, the City of Guelph will join 15 other Ontario municipalities owning a share of the electric utility (Alectra). This means that our city council will continue to have an ownership stake and receive dividends each year. Given that the City of Guelph will own a share of a larger utility, these annual returns are expected to increase.”

That sounds like another “expected” promise that is as hollow as the entire article as published.

The Alectra team is throwing the book at citizens using a fancy website, expensive brochure and phone survey. The campaign’s so-called public information sessions across the city carefully set up to not allow questions to be asked by the principals. The entire exercise to persuade citizen, read that the 13 members of council, who represent the people is a mockery and insult to the populace.

The cost that we are paying for this give away to Alectra has already been established by the city to be $2.36 million. Just to be sure of this, we are paying the promotional costs of this attempt to take-over Guelph Hydro.

Does this make any sense to you?

The Alectra campaign leaves out the thousands of residents who are not social media savvy but are dependent on electricity. This includes the elderly, disabled, the working poor and those confined in retirement and nursing homes.

Look at it this way: Guelph Hydro sends out 55,000 bills a month chiefly through snail mail. Here is an inexpensive way to inform all the customers of the details of this proposal. Nope. Instead, this Alectra sales campaign is focused on the electronic media.

The response was that the dividends that Guelph Hydro pays the city annually would finance the Alectra pitch. But didn’t that money come from the citizens who pay their hydro bill?

Alectra says the board of directors will each receive $25,000 plus $2,500 for each board meeting they attend. The company says that the directors “honourarium” is expected to increase to $35,000.

That sounds like the good jobs claim start   a at the top of the organization.

It hurts me when I laugh at irrational behaviour

The Baloney Scale 1: If city council approves the proposal, Guelph will lose control of Guelph Hydro. So at this stage, just 27 days left, citizens remain in the dark because of the secrecy associated with the negotiations. There is no recourse to exit this merger once council approves it.

Baloney Scale 2:

Guelph Hydro’s entry fee into the Alectra consortium is transferring all its assets to Alectra with no compensation. Oh! There is one caveat. Alectra will not assume Guelph Hydro’s long-term debt of $93 million.

In summary, we give away our Guelph Hydro system to Alectra and in return receive an undisclosed interest in a large corporation with a short-term financial record?

Who is negotiating this deal, Bernie Madoff?

I think I’ll toss my cookies if this cock-eyed deal is approved by city council.

 

Please Note: There is a group of concerned citizens who oppose this merger. Any resident of Guelph, 18 years or older can sign the petition to be presented to Council before the December 13 meeting to approve or reject the merger. Please send your name, address and ward in which you reside to gerrybarker76@gmail.com. Your name will be added to the petition. Volunteers willing to participate in collecting names are most welcome. As the project develops read guelphspeaks.ca for further information.

Never underestimate the power of the people.

2 Comments

Filed under Between the Lines

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.

4 Comments

Filed under Between the Lines