Tag Archives: Derrick Thomson

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.

 

Advertisements

10 Comments

Filed under Between the Lines

The high cost of departed senior City of Guelph managers

By Gerry Barker

May 18, 2017

We learned this week that former Chief Administrative Officer (CAO) Ann Pappert is looking for a job according to an extensive online Linkedin profile. Ms. Pappert left the city last May 26 for a new position as Assistant Deputy Minister in the Tourism, Culture and Sport Ministry.

That position lasted from October 2016 to February 2017. For whatever reason, she left prior to expiry of her six months probation. The 2016 Ontario Sunshine List shows Ms. Pappert received $263,757 from the city of Guelph although she only worked barely five months. The question is: What were the other benefits to which she could have been entitled? What were the terms of her contract? Such benefits could include pension, car allowance, unused vacation and/or sick time, travel expenses and insurance.

We do know that part of her package awarded in December 10, 2016, during a closed session by council, was reimbursement of unused vacation time, and a $28,000 retroactive performance bonus. Much has been written about that closed session but there has been no official acknowledgement or explanation why Ms. Pappert, Al Horseman, Derrick Thomson and Mark Amorosi were given such high increases.

The kicker is not one person in the entire Guelph administration said a word about those increases until the Sunshine List was published in March 2016.

The revelation ignited a wave of the four senior manager’s departures. Pappert left in May, Thomson resigned shortly after the Sunshine list announcement to take a job with the Town of Caledon, Al Horsman left in August 2015, and Mark Amorosi left the city last February.

These four executives were handsomely rewarded by a gob-struck city council, in secret, not having the guts to tell the people who pay the bills. To this day the minutes of that closed session are locked up. I know, I tried to get them released. Turns out the special “Closed Session Investigator,” a city paid consultant from London took four months to even reply to my request. Their opinion is that the city acted according to the rules of the Ontario Municipal Act.

The thing that citizen’s should take away from all this behind closed-door handling of the public’s business is that our Mayor, Cam Guthrie, went along with it.

Today only Mr. Thomson remains the last of four top senior managers who, after resigning, was hired last June to take over the CAO’s job. Why wouldn’t he? His first year on the job will earn him $245,000 including a $9,900 car allowance. To his credit he went public with his salary.

There were some astonishing inclusions and exclusions.

According to the 2016 Provincial Sunshine list, former CAO, Ann Pappert, was paid $263,757.32 in 2016. Now you would assume that was for the year but Ms. Pappert left the city May 26, 2016, Seems like a lot of money for less than five months work. Why did she earn a $28,000 performance bonus? People earning performance bonuses don’t plan to leave, so why did she leave Guelph?

Checking the 2015 Provincial Sunshine list it showed Ms. Pappert was paid $226,060.96.

The only possible conclusion was that Ann Pappert was paid $489,818.26 for 17 months work as CAO, from January 1, 2015 to May 26, 2016. That works out to a monthly salary of $28,812.

At those rates, why did she resign when the Sunshine List revealed her increase onMarch 2016?

So while her provincial government job did not pan out there are still many unanswered questions about that December 10, 2015 closed council meeting. A total of $98,202 salary increases was awarded to Ms. Pappert, Deputy Chief Administrative Officer’s (DCAO) Al Horsman, Derrick Thomson and Mark Amorosi.

But there is more:

Former Chief Financial Officer, Al Horsman, left the city in August 2015. Today his name shows up receiving $188,999 in the Sunshine 2015 report, the equivalent of a full year on the job. Not bad for eight months work … in 2015. The question is, why did Horsman leave? He was deposed as CFO in the November 2014 reorganization of the senior management and switched to the Waste Management, Environmental Services and Engineering portfolio.

Former CAO Ann Pappert supervised that reorganization, following the 2014 civic election.

Horsman discovered the debacle of the deal made with the Rizzo brothers of Detroit to recycle material shipped from the motor city. The deal fell apart and was reported to have cost Guelph some $2.5 million. In December 2015, Solid Waste General Manager Dean Wyman, who was involved in the Detroit deal, left for a similar job in Edmonton.

DCAO Scott Stewart is now engaged in a rationalization procedure to discover and fix why the Waste management operating costs are losing $270.000 a year.

With Horsman gone, it left just three Senior managers, CAO Ann Pappert, DCAO’s Mark Amorosi and Derrick Thomson.

The revelation of the large increase awarded by council to the remaining three top managers in March 2016, triggered the resignation of Mr. Thomson who said he was taking a job with the Town of Caledon. In April, Ms. Pappert announced she was resigning. But Mr. Thmson came back.

Along with her duties as CAO, Ms. Pappert was also Chief Executive Officer CEO) of Guelph Municipal Holdings Inc (GMHI), for four years. As CEO she signed off, along with her successor at GMHI, Pankaj Sardana. They jointly presented the report to council, acting as shareholders, May 16, 2016. It revealed that the city-owned GMHI was broke and had lost $26.6 million. Ten days later she left her job.

The unfolding story of GMHI leaves many questions to be answered.

Was Ann Pappert paid two salaries for her two senior responsibilities as CAO of Guelph and CEO of GMHI?

Why did two Councillors, June Hofland and Karl Wetstein, both appointed to the GMHI board, not report to council about operations? The chair, former Mayor Farbridge, appointed them. Did they not realize that appointment carried specific fiduciary responsibilities to the public?

What was the role of Guelph Hydro in the Community Energy Initiative program?

How much did Guelph Hydro invest in GMHI in four years?

Why did Guelph Hydro loan GMHI $65 million without any collateral or expectation of repayment?

How can GMHI give the city $9 million over four years in dividends and lose $26.6 million in the same period?

Were the GMHI financial books audited, if so by whom and when?

What was the impact of Guelph Hydro bills to residents during the five year period, 2011 to 2015?

Will the city reveal the total wind-up costs of GMHI and when?

How do GMHI’s financial costs and losses impact the sale of Guelph Hydro?

Is the potential Guelph Hydro sale to pay off these GMHI losses and clear the city books of the debt?

This is the result of misuse of political power and mismanagement of city resources.

The closed session meetings, regardless of what the staff says, are nothing short of secret manipulation of events and decisions. Much of it is political because the city has been held hostage for the past ten years by the political left, supported by the powerful labour movement.

If the majority of citizens don’t complain and demand answers from their elected representatives, then nothing will change. Property taxes will continue to grow exponentially annually. The same will happen with user fees.

The fall-out is that we allowed a CAO to leave this city after receiving more than a million dollars after just over five years on the job.

We can only blame ourselves for allowing it to happen.

Our only chance for electing responsible and experienced councillors next year, to clean up the financial mess the city is in to reduce the operating overhead, restore the reserves and demand performance of the professional staff.

 

 

2 Comments

Filed under Between the Lines

Why did the Guthrie administration shut the water off when the house was on fire?

By Gerry Barker

February 27, 2017

Late last week, I finally received a response from the Closed Session Investigator, employed by the city, after almost four months of “investigation.” On November 2, 2016, I requested that the minutes of the closed session council meeting of December 10, 2015 be released to the public.

The reason? That was the meeting in which the public learned four months later, that the top three senior managers of the city had been awarded a total of $98,202 in increases for 2015.

That decision was hidden from the citizens until March 31, 2016 when the provincial Sunshine List of all public employees earning more than $100,000 a year was published.

And there it was. Chief Administrative officer, Ann Pappert, got $37K, Deputy Chief Administrative Officer (DCAO) Derrick Thomson, $33K and DCAO Mark Amorosi, $26K

The city administration currently led by Mayor Cam Guthrie and CAO Derrick Thomson has never publicly acknowledged even paying the increases let alone the rationale.

The conclusion by the special closed session investigator Amberley Gravel, stated: ”That the council did not breach the provisions of the Municipal Act where it went into closed (sic) for consideration of the non union compensation adjustment on December 10 part of the council budget meeting of Dec 9 and 10 2015.”

This five-page report detailed how the Amberley Gravel investigator arrived at this conclusion.

First, the open public discussion of council to approve the 2016 city budget was spread over two days. I know because I covered it both days. During those deliberations, council sandwiched, in a closed session, to approve the non-union compensation isncreases of the three top managers. The details of which were not revealed.

The reason for the closed session as stated in the Municipal Act was s.239(2) (d) was “with respect to labour relations or employee negotiatio

Denying the right to know what we are paying our staff

Do you think this explanation gives council the right to deny the public to know what stakeholders are paying their professional staff?

How long had these labour negotiations with the three senior staffers, occur before that Dec. 10 meeting? In my opinion council, before that meeting, had an excellent grasp of what the three managers were going to receive. All they had to do was vote to approve it and they did it behind closed doors which the Amberley Gravel reports interprets as quite legal under the Municipal Act.

There was no one to protest or comment as for four months the people were unaware. Our society demands that public boards apply the rule of law and ensure checks and balances. City council abandoned this responsibility and acted to cover it up. To me this was moral turpitude and cowardice.

The report states: “At 8:45 p.m. December 10, Council reached the matter identified as the 2016 Non Union Compensation adjustment recommendation. This is identified as item #8 of the 2016 Tax Supported 4 (sic).”

Okay let’s offer an explanation of this Amberley Gravel statement.

They are referring to the 2016 budget. I contend, and the provincial Sunshine List concurs, that those increases were awarded for 2015, not 2016. If Amberley Gravel can’t keep it straight, how do they expect the citizens to understand … or maybe they don’t.

The top three managers’ increases were for 2015. In my opinion, this only exacerbates the sloppy financial management that has plagued the citizens.

Here’s why. In March 2015, council approved the 2015 budget. It is certain that non-union compensation for 2015 would have been included in that budget. Why did it take a special closed session meeting Dec. 10 to approve the $98,202 staff increases? Would this not generate a negative variance of the 2015 Budget when the 2015 Financial Information Report (FIR) is filed to the province?

As an aside, the 2015 FIR was not completed until August 2016 chiefly because the financial staff was missing two key employees, General Manager and Treasurer Janice Sheehy, who resigned in March 2016 and Tara Baker, a financial analyst who went on maternity leave mid year.

Now, two of the recipients of this Dec 10 event are gone, leaving just CAO Thomson as the third employee who received the increase in 2015. And neither he, nor any member of council who approving the award, has said a word about this exorbitant public expense that has been covered up for the last 14 months.

Was it just coincidence or a cover-up?

Even stranger, there was another closed session of council, just four days later, December 14, 2015, to approve the Indemnification Bylaw. Thus it authorizes repayment of legal costs incurred by any staff member, or elected official if they are charged with a legal procedure onitiated by any citizen or corporation.

There is one legal case currently in play in which a former city official has sued a citizen for alleged defamation. This case is a reversal of the intent of the Indemnification Bylaw.

Even more important, was it just coincidence that after the recipients received a boatload of money council, in its wisdom, decided to make sure that no one complained and sued the city or its officials?

On November 2, 2016, I requested an investigation by the city’s closed session investigator who was on a retainer with the city since 2008, the request was denied. As far as I can find out, this is only the fifth such request that has been investigated since 2008. None of them were granted or in favour of the complainant.

This investigator is a part-time employee of the city who represents the staff and elected officials but not the public interests.

I should point out that an investigation implies that all affected parties are interviewed. I never heard from the Investigator, Amberley- Gravel, located in London.

Why are citizens paying for this “independent” service that apparently always sides with the administration? Particularly when more than half of the 445 Ontario Municipalities use the services of the Independent Ontario Ombudsman’s office for such closed session investigations.

This is another tactic used by the administrations headed by the former mayor, Karen Farbridge, to suppress public opinion and participation in the business of the people’s government.

In the past nine years, the record is full of examples of the misuse of closed public sessions of council to conceal, thwart or de-politicize important events and decision involving spending the public’s money.

So the cover-up remains. Mayor Guthrie and his council could have prevented this abuse of the public purse and right to know. I know there is a minority of council who probably did not go along with this decision to grant large increases to three staffers.

But because of the implied threat of being investigated by the Integrity Commission for speaking out about the details of closed session meetings, they are politically hogtied. That’s how the former mayor kept the troops in line.

While the majority of council sits back and believes they are immune from criticism and confrontation when the public objects, they will discover the wrath of the public come the next election in 2018.

I think about this a lot. Our city is being run by a collection of weaklings on council and a depleted senior staff. That is a double whammy against the citizens. Nine years of abuse of the public trust has done n irreparable damage to the citizen stakeholders.

This is why the cost of operations in Guelph are 50 per cent higher that comparably-sized cities. That’s why our taxes are among the highest in the province. That’s why our user and service fees are higher than other municipalities of similar size.

Administrative weakness at the top

Today, there is little strength at the top of city management. By the latest count the city has lost 12 senior managers since Mayor Guthrie was elected. The city has no Chief Financial Officer, no City Solicitor, is minus two DCAO’s and a bloated city staff that needs rationalization.

It’s ironic that in the 2016 budget discussion, there was an attempt to conduct a total staff rationalization to strengthen the administration. The majority of council pooh-poohed the plan saying it would cost too much and the current senior staff had made all the staff realignments to reduce costs that were possible. It was defeated.

In the preparation of the 2917 budget, council approved hiring 13 additional employees costing more than $1million annually.

Yet, February 15, 2017, this same council voted to spend $500,000 to conduct a search of options available to sell, merge or just leave Guelph Hydro alone. The irony of this decision is to hire some nameless outside consultant to solve their problem in the next four months is like shutting off the water when the house is on fire.

For those members of council who are planning to seek re-election, here is some advice: Vote to conduct an independent audit of the city’s finances; conduct a public hearing to review all bylaws, particularly those passed by the three administrations.

Open all city meetings. If a legitimate closed session is necessary, publicize the reason and conclusion of the discussions and recommendations conducted in private.

Memo to council: Please stop treating your constituents as dummies who are manipulated and coerced. Remember whom you work for.

Just think about that

10 Comments

Filed under Between the Lines

Citizens will hear the future of Guelph Municipal Holdings Inc. & Guelph Hydro Wednesday night

By Gerry Barker

February 13, 2017

Follow guelphspeaks.ca on Facebook and Twitter

Important note: The sale or merger of Guelph Hydro is scheduled for Wednesday night February 15, commencing at 6. p.m.  The fate of GMHI will also be discussed the same night. Sorry for the inconvenience. My advice still stands, please plan to attend the Wednesday meeting and make your voices heard. GB

On Wednesday, expect a different tactic employed regarding disposal of Gyelph Hydro.. A five-person committee, headed by CAO Derrick Thomson, is asking council to approve the sale of Guelph Hydro with the committee having the power to do so.

This time the method is different from 2008 when then Mayor Karen Farbridge was defeated in attempting to have council approve the merger with two other local distribution facilities in Hamilton and St. Catharines.

This is nothing but an end run to capture capital gain from the sale or merger, take your pick but someone is going to pay for it,

How can this committee, that has one member of council on it, Bob Bell, be given the power to dispose of the city’s most valuable, profit making asset?

How can the committee gain such power when the future of the Guelph Municipal Holdings Inc. misadventure into a $96 million disaster, hangs over the city like a vulture setting up his evening meal.

Ask yourself, where does the city, the one without a Chief Financial Officer for more than two years, plan to use this potential cash bonanza? Reduce the debt? Pay-off the $65 million hydro loan now sitting on the city books as an impaired asset. That’s because the borrower, GMHI, chaired by former mayor Farbridge, has no money to even pay the interest of the Hydro loan.

Apparently, the Wednesday agenda will discuss extending the future of GMHI to be targeted until mid year.

Are the potential Hydro sale/merger proceeds going toward the police HQ renovations? Or a new downtown Library? Or the South End recreation centre? Those items total capital spending of $140 million.

Is this prudent management of city assets? We live in a city that has higher operating and capital spending budgets than Cambridge and Kitchener, some 50 per cent higher. The disappearance of senior managers since 2014 has made matters worse. Our taxes are among the highest out of 445 municipalities in the Province.

Even more interesting, the Thomson committee debated for five months. They asked for public input and the response was overwhelming against the sale/merger of Guelph Hydro.

The committee also gave citizens little time to appear before council to comment on the committee recommendation to allow it to sell or merge Guelph Hydro. Is this fair?

This is nothing but a gigantic sham to shut down public protest and grab the value of Guelph Hydro estimated to be $150 million.

* If you want someone else to control your electricity costs, don’t show up Wednesday night.

* If you believe what this Thomson committee was told by outside consultants about the declining value of Guelph Hydro and the future of turning your home into a storage site costing thousands of dollars, then don’t show up Wednesday night.

* If you believe that your water bills are going to be reduced if Guelph Hydro is sold, don’t show up Wednesday night.

* If you believe that the proceeds gained by selling off Guelph Hydro will lower your taxes, don’t show up Wednesday night

* If you have faith that council will table the committee recommendation, don’t show up Wednesday night.

It’s time to call a halt to the sloppy and inefficient management that has been denuded of talent. Instead, it lurches on without reducing the city’s gargantuan spending policies that always are directed at the wrong goals at the expense of the necessary goals.

This is the citizen’s opportunity to protest this recommendation that lacks the credibility of public power.

If council passes the recommendation, say goodbye to public trust, power and the city’s most valuable asset.

Addendum

In my opinion, Councillors Karl Wettstein and June Hofland should not participate in discussions regarding Guelph Municipal Holdings Inc or the proposed sale/merger of Guelph Hydro. Their role of serving on the GMHI board of directors for four years and participating in the $96 million dollar losses, linked to Guelph Hydro, of that city-owned corporation, creates a conflict of interest.

15 Comments

Filed under Between the Lines

City dismisses a key senior employee for release of confidential information

By Gerry Barker

February 10 2017

NEW! Share this post on Facebook and Twitter.

Today marked the end of the Farbridge administrative regime existing for the last ten years. Chief Administration officer (CAO), Derrick Thomson announced that Deputy Chief Administrative Officer (DCAO), Mark Amorosi, was no longer employed by the city.

Reaction was swift as the Internet lit up with comments from citizens supporting the departure.

As the editor of guelphspeaks.ca, involved in a lawsuit commenced by Mr. Amorosi, at this time, I will have no comment until the details of the dismissal become more relevant to the case.

While the CAO applauded the “valuable contributions that Mr. Amorosi contributed to the City of Guelph, there were many underlying concerns about the operations of the city by a DCAO who oversaw, Finance, Human Resources, Information Technology, Special Project Management and Court Services.

That responsibility was the largest senior management responsibility of any of the three DCAO’s. They reported to CAO Derrick Thomson who announced the departure of Amorosi.

Enter the $1 million lawsuit by former Chief Building Inspector Bruce Poole, against the city for wrongful dismissal. His lawyer, during the examination for discovery, asked the city for emails concerning Mr. Poole’s firing. Instead the city downloaded the files from the server and hundreds of alleged confidential, unrelated emails were included. Most initiated by former Chief Administrative Officer, Al Horsman.

But here’s the problem. While Amorosi was responsible for the Information Technology department, headed by former city clerk, Blair Labelle, the drive sent to Bruce Poole’s lawyer contained a ton of alleged confidential information. It was an external thumbnail drive reported to contain 53,000 emails included in the information that was requested by Mr. Poole’s lawyer.

Tony Saxon, reporting in the online Guelph Today, published some details of the thumnail drive in a report last Friday morning. The public reaction was instant. By the afternoon CAO Thomson, apologized and requested the return of the offending drive.

But here is where the plot thickens. Five days later, the city fired Mr. Amorosi.

This is a veteran senior manager who had enormous responsibility for eight years.

In my opinion, this firing statement published by the city, did not trigger the dismissal. It was something else that created the immediate firing of a senior manager making $216,000 a year.

It may never be revealed what the real reason was because of the secretive manner in which the public is denied specifics of the how our city is managed. Or why voters rejected in 2008 the sale of Guelph Hydro. Yet the administration is now seriously considering selling or merging Guelph Hydro…the same thing.

Digging into it, the committee charged with examining the options of the future of Guelph Hydro, has heard from a consultant that today’s Hydro Electric Distribution (LDC) systems are outdated and losing value.

Why? Because more and more local power distribution systems are being overtaken by technology. He cited that people would have batteries in their basement to store unused power generated by rooftop power generated solar panels.

To interpret, he is saying that a homeowner will have to invest thousands to install the solar panels, then the storage batteries and the necessary control equipment.

When Tesla, the electric car company operated by Elon Musk, builds the world’s largest battery manufacturing facility, and along with dozens of other companies, they have been working to develop high-capacity batteries for cars.

To suggest that there is technology today that is reasonably priced is misguided and a disservice to citizens. Think about it. We have a perfectly working electric distribution system that derives power from a well-established source.

Why would citizens in Guelph agree to sell a perfectly well operating electric supply system, based on this specious information promising something that is non existent today? Why would they agree to lose control of their Hydro distribution system to be exposed to new charges from a new owner for a service they need?

I contend, that our Guelph Hydro system is doing the job intended since it has going back to Adam Beck and the Niagara Hydro generating systems.

Haven’t the citizens being exposed enough by the errant Guelph Municipal Holdings Inc? It has been an adventure imposing a District Community Energy system to almost bankrupt the city, losing some $96 million?

The case is clear. Our administrative overhead costs are way out of line. We can survive if the council realizes what is the only course of action to save the city financial problems.

Selling Guelph Hydro is a band aid. Managing our overhead, as outlined by Pat Fung, CA, CPA in his detailed analysis of city financial management, is the responsible way to reduce our costs and dependence on ever-increasing property taxes.

Today may be the first day to begin the recovery of common sense and reform of an administration that is ill. Is it ready to correct the mistakes of the past without selling a premier asset?

As a final note, I have disagreed with some of the decisions of Mayor Cam Guthrie in the past two years. But I must say, that he is on the brink of cleaning up the financial mess he inherited.

Drive on.

12 Comments

Filed under Between the Lines

Why is the Staff promoting another failed Farbridge vision project?

By Gerry Barker

December 19, 2016

Help! Tonight council will debate a Staff proposal that literally demands the province to review its dispersal of the former Reformatory property. Staff recommends that council direct the Mayor to meet with Premier Kathleen Wynne and six of her cabinet ministers including President of the Treasury Board, Guelph MPP Liz Sandals.

It is now complicated with the resignation of the Minister of Community Safety and Corrections, David Orazietti, MPP for Sault Ste. Marrie.

This Staff recommendation is a power move that hit a brick wall at Queen’s Park. Minister Sandals was too busy to return phone calls. Her staff referred the matter to Infrastructure Ontario Communications Advisor Ian McConachie. He said that municipalities have the opportunity to purchase the property at market value.

In case you are wondering, the market value of raw land in the area is estimated to be $50,000 an acre multiplied by 549 acres is $27,950,000. That average land price is probably conservative given the soaring costs of land and housing.

To its credit, the staff report says: “However, the city cannot afford to buy this land.”

It goes on to say that the city should not respond to an expression of interest, the precursor of selling the land, if and when the province decides to sell the 549 acres.

The staff fears that if the property is sold to the highest bidder the purchaser won’t share the city’s vision of land use in which they call the Guelph Innovation District (GID) of 1,100 acres. The Reformatory lands represent half of that total.

This was a vision originally launched by the former Farbridge administration. The use of staff resources to work on laying out the plan for the lands, was one of the reasons there were serious staff delays in processing other subdivision and business development. Over eight years, it earned Guelph the dubious distinction of “being a difficult place in which to do business.”

The cost of all this planning and engineering conducted on property that the city did not own, is another concealment of wasted spending. But at what costs?

Well here are some current examples.

There is no funding available today to build either or both, the South-End Recreation Centre or the badly needed downtown main library. The current estimated capital required is $125 million. That’s today, it will be greater five years from now due to inflation and increased borrowing costs.

Or, how about the estimated $107 million, blown on the failed Guelph Municipal Holdings Inc (GMHI), Envida Community Energy Corp. and Guelph Hydro. Citizens will probably never know how this failed Community Energy Initiative, personally headed by the former mayor, drove up their electricity bills. The increase was 45 per cent in four years. Also, former CAO Ann Pappert was named by Ms. Farbridge as CEO of GMHI for four years. Small world.

This brings up two failures of management to collect money due to the city.

The first is that several years ago, failure to collect $180,000 from certain residents in the Lowes Road and Dawn Avenue area who failed to pay between $7,000 and $10,000 in local improvement charges for converting wells and septic systems to the city system. The rub is that a number of people did pay.

The other example of mismanagement is the collection of fines levied in the provincial court that the city manages in the old city hall. More than $4.5 million is determined to be “uncollectable.” That’s just for 2015.

Then there is the Urbacon case in which our new city hall cost $23 million more than the original contract.

Moving on, the millions that were spent on the Dunlop Drive Waste Resource Innovation Centre that, according to an internal audit, cost taxpayers some $270,000 a year just to keep the doors open. And if you want to rid yourself in yard waste, it’ll cost you five bucks.

As one citizen complained at the weigh scale: “But I’m a citizen and my taxes paid for this place.” Security!

And let’s not forget the Detroit deal in which the Motor City shipped recyclable material for processing in Guelph. Instead of 100 per cent materials it turned out that only 60 per cent was used for recycling. There are reports the deal cost the city more than $3 million. Both the senior management officials allegedly responsible for cutting this deal are no longer with the city.

From out of the ashes

Now we learn that the Staff is attempting to resurrect the GID. On the one hand it recommends that council “direct” the mayor to hold talks with Premier Wynne and six of her cabinet colleagues to expedite gaining ownership and control to ensure the ‘vision” of the GID land-usage plan.

These conditions include a “carbon neutral development.” Create a mixed use community and a research and development cluster.

Today the Staff is urging the Province to accept its GID vision by setting up a collaborative arrangement that would result in achieving joint city/provincial growth, environmental and economic development goals.

My first question is: “What’s in this for the Province who owns the land?”

My second question is, why the Staff is even considering this huge project when they know there is insufficient financial support to accomplish this?

My third question is, how much has already been spent in terms of staff costs and consultants to advance this project?

The working arrangement the city had with the Province over these lands expired in 2014.

So now the Staff, which should know better than any living being in the city, is attempted to perpetuate another failed vision project of the previous administration. Oh! Maybe it’s because most of the senior staff that were involved during the costly planning of the GID are still there.

The recent 2017 budget approval by council for the third time in a row, refuses to reduce operating costs, instead, continues to increase them with an unnecessary property tax levy and adding more staff.

Both staff and Council were presented with a comprehensive plan to reduce costs and avoid the property tax levy brought to their attention by Guelph resident, Pat Fung, CPA, CA. It was an eight-page, detailed review and proposal using data from four years of the city’s own Financial Information Report’s, filed with the Province annually. It was ignored by the administration.

Mayor Guthrie has been a vociferous supporter of the senior staff. First, it was his defence of former CAO Ann Pappert when he threatened a citizen with legal action because she outlined the former CAO’s record of mismanaging the city. Now the Mayor’s executive team that he describes as smoothly running the city, is the best he’s ever experienced.

Now more than ever it’s time to recruit an Auditor General to oversee the operation of our city. It’s necessary because too much power has been given to the staff without checks or balances. The CAO has absolute control over all the staff. The Mayor seems to lack control of events including annual budgets.

My main complaint is that His Worship never explained to the citizens why those three senior managers received increases totaling $98,202 for 2015.

****

Having said that, on a personal note to all, Barbara and I wish you and yours the best for the holidays and may the New Year bring health, happiness, peace and goodwill.

****

Correction: The figure pf $275,000,000 in paragraph four of the original posting was incorrect. The estimated total cost of the Reformatory acres is $27,500,000. Guelph speaks regrets this error that may have misled readers. GB

 

 

 

 

8 Comments

Filed under Between the Lines

Is Mark Amorosi, the man for all reasons?

By Gerry Barker

November 7, 2016

The most powerful civil servant in the Guelph administration is Deputy Chief Administrative Officer (DCAO) Mark Amorosi.

His field of management control covers the spectrum of staff responsibility. According to the city staff organization chart, Mr. Amorosi is chief of Finances, Human Resources, Corporate Communications and Customer Services, Court Services, Information Technology, Project Management Office, and the City Clerk’s department. Senior managers in those key departments report to Amorosi.

Mr. Amorosi, an eight-year veteran of the administration has climbed steadily in the ranks. He was hired to head the small (at the time) Human Resources (HR) department that included control over, union and management association negotiations; hiring and firing, staff benefits, personnel performance reviews, and examining personnel markets in competitive jurisdictions.

In short, all personnel matters filter through his field of responsibility. The staff in 2008 was growing rapidly as the new council under Mayor Farbridge was fulfilling its agenda of changing the city. The size of the city staff in 2008 was about 1,400. However for discussion purposes, Mr. Amorosi’s HR department did not report the details of the police, fire and EMS staffs who are also city public employees.

Currently the 2015 city staff count is 1,944, all of whom are members of the Ontario Municipal Employee Retirement System (OMERS). It does not include those employees who are members of the managerial association or other organized units within the staff. All city staff is contributing to their respective retirement organizations and their defined pensions. This means the municipality is bound to paying retirees the indexed benefit for their lifetime of the employee as well as surviving spouse.

Did I mention that the average age of retirement of OMERS members is 55? For actuarial purposes, the life expectancy of a 55 year old is an additional 25 years. It is a huge and growing liability to Ontario’s 445 municipalities. Guelph has two future retirement liabilities on it balance sheet totaling $31 million and growing by $3 million a year. That is not cash on the books but an entry to track the future liabilities of staff retirement, both unionized and managerial. Currently there are two cash reserves dedicated to support the liabilities. The OMERS liability of $14,519,000 has a reserve fund of $1,799,000. The liability of the managerial staff is $16,850,000 with a reserve fund of $1,147,000.

The cash coverage of those future liabilities is just 9.3 per cent.

Again it’s pushing the ball down the line with expectation of the next 50 years, for example, the council will have to have the financial underpinning to guarantee the promised benefits for its retired employees who could number in the thousands. It is even scarier that OMERS is underfunded by $7 billion. If salaries of public workers keep escalating it will only make matters worse.

Mr. Amorosi has been in charge of HR since was hired and within two years took on Legal Services in his Executive Director managerial portfolio. On the surface, at the time, this looked like a good fit because HR needed legal support due to the numerous contract negotiations and staff movement. On his watch, the city staff has grown beyond the growth of population.

Currently, CAO Derrick Thomson is in charge of legal services and the city solicitor’s office.

Mr. Amorosi’s next major move up the senior management ladder came in November 2014 following the civic election. Within a very short period of time, CAO Ann Pappert announced a major shift in responsibilities before Mayor Elect Cam Guthrie took over December 1, 2014. It is not known if Ms. Pappert briefed the mayor of the senior staff reorganization or not.

Executive Director Janet Laird resigning, and Executive Director, Derek McCaughan, leaving the city staff for unknown reasons caused this change.

This action was the birth of the title, “DCAO.” There were three DCAO’s plus Ms. Pappert remaining: Mark Amorosi, Derrick Thomson and Chief Financial Officer Al Horsman. Ms. Pappert left the city in May this year to take a job with the Ontario government. Mr. Horsman left in August 2015 to take the job of CAO of Sault Ste Marie.

As it has turned out, Mr. Horsman was the city’s last CFO. Under Amorosi’s watch, he has gone through two General Managers of Fincance and appointed a third as CFO, General Manager of Finance and Treasurer. That individual is currently on maternity leave until next year. Horsman’s job was handed to Mark Amorosi who has been operating the Finance department for the past 24 months. He has played a major role in two city budgets and now is involved with the 2017 budget with CAO Derrick Thomson.

This is where Mr. Amorosi chooses to ignore a thorough analysis performed by Guelph resident Pat Fung; his credentials include being a Chartered Accountant and a Certified Public Accountant. Designations not possessed by Mr. Amorosi.

Mr. Fung presented his financial analysis of the city’s finances to members of council August 18 and again two weeks ago at a meeting of council. During his five-minute presentation he asked a direct question of Mr. Amorosi and the Mayor intervened saying he cannot question the staff “in this way.”

The Fung report documentation for his analysis was based on the city’s own published financial statements over four years and a report in 2014 to the city by BMA management consultants of Hamilton.

Not only did Mr. Fung demonstrate how Guelph’s operating costs were higher than Ontario cities of similar size but also were 50 percent higher than either Kitchener or Cambridge.

The figures clearly show a four-year pattern of wasteful spending with major negative variances, (excessive spending over budget) at year end. This resulted in a depletion of reserves every year that CAO Ann Pappert was in charge.

Before the 2014 civic election, Ms. Pappert when revealing the settlement with Urbacon Buildings Group costing $8.96 million, announced that $5.7 million was used to pay the lawsuit costs. Ms. Pappert said the three reserves used would be repaid with annual replenishment of $900,000 a year from operating budgets.

Then Mr. Amorosi, now head of finances, was involved in the 2015 budget in which Coun. Karl Wettstein moved to reduce the payback to $500,000 a year and the majority of council agreed. After reviewing the 2015 Financial Information Report, I could find no reference to any money being used to replenish those specific reserves.

Then along came the Dec 10 closed-session Council meeting that awarded three senior managers, Mark Amorosi among them, increases ranging from 14 to 19 per cent for 2015. The public did not learn of these excessive increases until they were revealed when the Provincial Sunshine List was published in March 2016.

The Guelph council or the three recipients have never admitted or commented on the salary increases or the reasons for awarding them.

When you translate this egregious deliberate cover-up to the way the city is being managed, the Fung Analysis becomes more pertinent, particularly his recommendations to reduce operating and capital spending costs.

I have contended for some time that this is the way three terms of councils, supported by city staff, have misled the citizens who are taxed excessively and forced to pay high user fees for a wide range of “services” ranging from storm water maintenance to waste collection.

Mr. Amorosi heads Court Services as part of his management control portfolio. The 2015 annual official Financial Information Report reveals that amount of fines levied in the provincial offenses court located in the old City Hall for 2015 was $14,337,000. But $8,022,000 of that amount is considered uncollectable or 55.9 per cent of those fined got away without paying.

Hmmm. If Mr. Amorosi was in private business and was responsible for company revenues, how long would he last when he reported a 55.9 per cent failure to collect court-awarded revenue?

Ask yourself, does this demonstrate the rationale that led to his 2015 salary increase of $26,868?

 

1 Comment

Filed under Between the Lines