Where well-meaning people of community stature got it all wrong

By Gerry Barker

July 25, 2019

Opinion

Part One of Seven

The beginning of the downhill drain of public money called the Community Energy Initiative (CEI) was unanimously approved by city council in 2007. The first year of the Farbridge administration’s dominant 2006 victory elected 11 councillors supporting the mayor.

The blueprint of change was discussed and approved by a select group of citizens ranging from business leaders, the University of Guelph, Chamber of Commerce, senior staff, Guelph Hydro, and key supporters of the Farbridge administration.

That election formed the genesis for committing public funds and the city on a number of projects to change the way we live. These include electric power, clean water, transportation, unorthodox waste management, home development, city operational management, industrial development, and restrictive procedural bylaws.

This unfettered control of the city administration, provided the ignoble ending of accountability, transparency and open government. The firing of two key city executives, Chief Financial Officer David Kennedy and Chief Administrative Officer Larry Kotseff led to the tightening control by Mayor Karen Farbridge to carry out the mandate surrounding the CEI and approved by leaders in the community.

It also began the 13-year increases in property taxes, averaging more than three per cent each year. The elimination of veteran senior managers removed the key checks and balances needed to control finances, to meeting provincial requirements. It’s required to balance the budget at the end of the calendar year and avoid a deficit.

This left the city administration with three choices: Raise revenues (property taxes and user fees) or increase the debt, or raid accumulated reserve funds to balance the city books. It is reported in the annual Financial Information Report (FIR) submitted to the Ministry of Municipal Affairs and Housing.

The contents of this voluminous report are not made public until the middle of the following year and generally not read by the citizens. So much for open government.

There is one exception to the content of the FIR. It contained the salaries of all public employees earning more than $100,000 plus taxable benefits. It is called the Sunshine List and is published every March.

This eventually became the Achilles heel of the city financial reporting. In December 2015, a closed session of council, in closed-session, approved a $98,202 increase to three senior staff CAO Ann Pappert, Deputy Chief Administrative Officers (DCAO) Derrick Thomson and Mark Amorosi.

In March, the Sunshine List revealed the trio’s 2015 salary and taxable benefit increases.

I am acutely aware of this issue as DCAO Mark Amorosi subsequently sued me for defamation after comparing the difference between the 2014 Sunshine List and 2015.

This matter after almost three years is now in the hands of Superior Court Justice Cynthia Peterson who has heard the submission of both counsels in which my lawyer is seeking a dismissal of the charges.

For the Farbridge administration it was only the beginning of raising revenue. User fees were increased as the city morphed into a growing municipality. The focus was on reducing fossil-fueled vehicles that were denigrated by a string of environmentalists whose representatives formed a majority of city council. All in the name of reducing greenhouse gases affecting climate change.

The bicycle lanes frequently started and stopped during expansion on the major routes shrinking vehicle lanes. Today, the result is congestion, worse that it was in 2007 because the population increased, the major streets hogtied the space for vehicles that were established years ago. What did the planners think was going to happen?

In the eight years of Mayor Karen Farbridge’s administration, few people cared about the ongoing development of increasing traffic In the city.

But here was a new major city redevelopment brewing that would lose more public money than any project known in the history of Guelph.

In 2012, wedged in all this was a citizen’s petition to the Minister of Municipal Affairs and Housing to audit the finances of the city. Ordinary and concerned citizens generated it. The likelihood today is not many people read it. If they did they probably would not remember it after seven years. The petition was carefully researched and vetted for accuracy. But was shot down by the Minister.

The citizen’s activist group, GrassRoots Guelph, prepared the petition, it was signed by 160 ratepayers. It was documented using official city figures as submitted in the annuals FIR mandated by the province. The petition detailed the discrepancies in the FIR over three years. Here is a draft copy of the petition. Today it only adds to the lack of financial management that has plagued this city since 2007.

As it was denied the Minister, Linda Jefry, she resigned from the government shortly after to run for Mayor of Brampton in 2014. In 2018, former Ontario Progressive Conservative leader, Patrick Brown defeated Jeffry.

                  Application to the Ministry of Municipal Affairs

         Requesting an audit of the City of Guelph’s finances and operations

         As per the Municipal Affairs Act R.S.O. 1990, Chapter M.46 Part II

September 12, 2013

Please note that this petition does not include the Urbacon city hall lawsuit settlement and associated costs was brfore the courts at thos time.

Under part II section 9 (1) we, the 162 undersigned taxpayers, request a Provincial Municipal Audit of the City of Guelph’s finances and operations. Our concerns are the management of the city that has resulted in exponentially increasing liability to the taxpayers now and in the future.

In our collective opinion we citizens agree with the following:

Finances

1. In the past four years, when figures were available, the City of Guelph expenditures exceeded budgets by a total of $24,771,000. The amounts were: 2012; $10,750,000; 2011; $5,783,000; 2010; $2,581,000; 2009; $5,657,000. In our opinion if the trend continues, these figures will exacerbate future liability to the taxpayers and the corporation.
2. Further, the audited financial statements for the City of Guelph in the comparison year did not compare to the figures of the previous year. For example, the 2011 statement showed 2010 expenditures of $309,198,000 while the previous audited statement showed a figure of $305,482,000. This is a difference of $3,716,000. Similarly, 2009 shows a difference of $3,668,000. In our opinion, expenditures exceeding budgets year after year produced by the required annual audit, does not imply confidence in the accounting numbers.
3. The above data points out some of the imprudent financial decisions and management by the City of Guelph.
4. The current administration created a municipal holding company of which the chief revenue component is Guelph Hydro. In the current year, the holding company, controlled by the Mayor and her cohorts on council, plus two independent directors, approved a $2,995,000 dividend that was 96.7 per cent higher than previous years. Despite an income decline of 44.1 per cent to $1,057,000. The result was a 179 per cent payout ratio as dividends exceeded earnings. In our opinion, this withdrawal does not meet corporate standards of risk/reward and is a misuse of public funds.
5. A non-budgeted and undocumented item that appeared in the 2011 and 2012 City of Guelph annual reports was used to boost revenues. In 2012, a $20,744,000 entry labeled “contributed subdivision assets” was stated while a similar item in 2011 totaled $9,901,000. Neither was in the budget. In our opinion these non-cash entries only serves to embellish revenues.
6. A report dated April 10, 2012, from the finance department labeled “Unaudited Operating Variance Report” stated that the total enterprise budget had a favourable variance of $4,304,000. Please note that this occurred three months past year-end. Yet in the Guelph audited Annual Report dated June 27, 2012, the expenditure variance was a negative $5,783,000. On the revenue side, the variance was $39,495,000. Neither figure was remotely similar to that presented to Council. In our opinion this does not instill public confidence in the City of Guelph accounting methods.
7. The reporting of financial data to taxpayers lacks clarity and accessibility. In our opinion, posting a 300-plus page 2013 budget document on the city’s website is not sufficient or accessible to most taxpayers.

Legal matters facing the city

1. As of March 11, 2013, there are 16 court matters reported in the Litigation Status Report. In addition, there are 16 outstanding Ontario Municipal Board hearings. There are 23 insured matters to be resolved. In our opinion this represents a potential unfunded liability to taxpayers. (Current Litigation Report in attached as appendix A)
2. An example was the city’s attempt to leave the Wellington Dufferin Guelph Public Health Unit. The resulting court case was lost but the legal costs incurred were never revealed. In our opinion this was a politically motivated attempt to opt out of a Provincially mandated Health Unit and failed to publicly disclose the cost to the taxpayers. Until the court case was settled, Guelph council’s representatives refused to attend WDG Health Unit meetings for many months.

Capital spending

1. In our opinion, in 2011, the city breached its 55 per cent of current budget capital spending limit. Under the self-imposed limit, the 2011 debt ceiling was $94 million. Instead the debt rose to $121 million.
2. In our opinion, taxpayers are concerned about city announcements of proposed capital spending projects including: A $73 million downtown library to be operational in 2017; a $37 million south-end recreation centre and then propose to spend $16 million to expropriate an existing commercial centre and convert it to a new riverside park.
3. In our opinion, the capital and operational spending in Guelph’s downtown has created a vacuum preventing needed spending on projects in other parts of the city. For example, the proposed south-end recreation centre, to be built in an area where there has been substantial residential development in the past ten years, is proposed in the long-term capital plan

4. Employee Costs

1. Figures released by the city audit in 2012 showed that civic employees
2. Total compensation costs were 88 per cent of the city’s property tax levy.
3. From 2008 to 2012. Guelph civic employees’ received total compensation increases of 31 per cent. In 2008, the city spent $124.8 million on compensation. In 2012, it spent $163.6 million. In our opinion this was triple the annual inflation rate during the same period.
4. Between 2006 and 2012, during the period controlled by the present administration, City of Guelph employees’ costs increased by 68.1 per cent. Or 10.9 per cent per year. During the same period, the comparable employee cost increase of its peer group included: The City of Kitchener, (35.3 per cent), The Region of Waterloo, (42.8 per cent), the City of Cambridge, (29.6 per cent). It represents a 41 per cent increase in employment costs over the peer group.
5. In our opinion the Guelph employee costs are excessive, in view that the population of the city grew by 5.8 per cent in the same period.
6. Reference: Presentation to Guelph council by taxpayer Milton Burns November 29, 2012 based in city administration reports and the Ministry of Municipal Affairs FIR report, schedule 42 (Copy attached).
7. Between 2006 and 2011, the city has had four individuals performing as chief financial officers. One of these was a deputy treasurer in the financial department who was responsible for managing the city finances for more than a year, following the dismissal of the previous CFO. Another candidate lasted one week on the job. The current CFO was hired in July 2012. In our opinion, this has resulted in a lack of taxpayer confidence in the management of the city’s finances.

Waste management

1. Failure by the city administration to provide taxpayers the opportunity to comment on operational decisions, involving major capital spending of waste management projects.
2. In our opinion, the building of a $33 million organic waste processing facility (OWPF) without revealing details of the construction, operational costs and contractual obligations, represents a breach of fiduciary responsibility of the city council.
3. The question arises as why the processing capacity of the facility, as approved by the Ministry of the Environment, is six times the wet waste needs of the City of Guelph.
4. In our opinion, selling the right to 20,000 tonnes of the facility’s capacity to the Region of Waterloo, without revealing the operating costs, has not served the taxpayer’s interests.
5. In our opinion, City Council, without informing taxpayers or consideration of the accessibility to collect waste from all residences, awarded contracts totaling $15 million to install an automated bin-based waste collection system.
6. This system is not available to 6,400 condominium residents due to the city refusing to pick-up waste in these developments. This represents 13.6 percent of the 47,000 Guelph households being forced to not only pay taxes for waste collection, but also pay private contractors to remove garbage. In our opinion, this is not fair to those homeowners affected.
7. Terms of a contract with the Lystek Company of Cambridge that processes human waste to store and dispose of city treated solid sewage sludge have not been revealed. In our opinion, this fails to detail safe disposal.

Conclusion

1. In our opinion, the present financial and operational situation in the City of Guelph will provoke future tax liabilities that cannot be corrected in a short time frame. Among these, is the growth of staff, defined pensions and sick leave liabilities under OMERS and employee associations, of which the majority of civic employees are members? This will adversely affect the municipality’s budgets for years to come.
2. Considering that in 2011, 52.2 per cent of city revenue was derived from property taxes, plus another 20.9 per cent in user fees, we request an independent audit of the city’s finances and operations to examine taxpayer exposure to current and future liabilities.

Respectfully submitted by the attached list of those supporting this petition.

The Minister said that the two parties, the city administration and GrassRoots Guelph should settle the matter. That did not happen because GRG demanded that the meeting be held in public and in the River Run Theatre. It never happened and CAO Ann Pappert called the petition a waste of time, but whose?

Next, Part Two: How the 2007 Community Energy Initiative plan steered                                     Guelph down the financial rabbit hole

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The night democracy died in Guelph

Posted May 7, 2015

The election compliance committee of council appointees heard evidence Wednesday night, May 6, surrounding a complaint by resident Susan Watson. She, her Toronto lawyer, and two supporting spokespersons complained about defeated ward six candidate, Glen Tolhurst’s financial report. She contended that the $400 donated by citizen’s organization, GrassRoots Guelph was illegal.

The three-person committee was reduced to two when the chairperson did not show up. The committee, after hearing the statements, said it could not consider interpreting the Ontario Municipal Elections Act. This Act does not preclude third party involvement in municipal elections.

However, this two-person quasi-legal committee threw Roberts Rules of running meetings out the door. The two had one moving the motion to order an audit and the other seconding the motion. They then called a vote on the motion and both raised their hands.

In some circles, this could described as a kangaroo court when everything is decided in advance regardless of the testimony. It was revealed there was a meeting April 23 to explain the procedures of the compliance committee. Neither Mr. Tolhurst nor his lawyer, David Starr, was invited. This goose was cooked well in advance.

Following a ten-minute deliberation, the committee agreed to hire an outside auditor within three weeks to audit the Tolhurst election financial report. It was revealed the committee chairperson, who was not in attendance, had told her colleagues before the meeting to vote for an audit.

This is where things go from bad to worse. Recapping: Two appointees of the compliance committee decide to order an audit, the cost of which is estimated between $25,000 and $30,000.

Seems like the committee is willing to swat a mosquio with a sledgehammer. This is about auditing a defeated candidate’s election spending of under $4,000.

Then there is the possibility that in the event the auditor does not find Mr. Tohurst broke the rules, the complainant, besides paying for the audit, could also face damages levied by council.

Watson admitted after the meeting that there was no finding of wrongdoing by Mr. Tolhurst but her objective was “to pursue the matter to provide clarity around third party spending.”

So taxpayers are faced with an embarrassing situation where an individual, a personal friend and supporter of Karen Farbridge, seems to think that the rules of third party involvement in municipal elections are not clear.

Really! She chose to use public funds of the City of Guelph to make a point that needed to be resolved at the Ministry of Municipal Affairs and Housing. That being the case, why did she use the mechanism established by the city to “clarify” the issue of third party participation in Guelph’s election?

This is nothing but abuse of the Guelph system of electing representatives.

What will future citizens who are interested in contributing to their community, think when they are faced with this kind of silly, expensive obstruction of the public’s right to participate in municipal elections?

It should be noted that this so-called election compliance committee was formed in 2007 by the Farbridge administration.

It was like a dagger to the heart of our democratic right to serve our community without fear of retribution after the fact.

Expecting a professional auditor to determine if this Watson complaint has any validity is like smoking the wrong stuff.

It’s a shameful, futile exercise that should be stopped by council.

If for no other reason than to agree that a committee of two, moving and seconding a motion and voting unanimously to hire a $25,000 auditor, defies any democratic principle.

Shame on them.

 

The assault on citizen’s rights and common sense by the friends of Farbridge

Posted May 4, 2015

On Wednesday night at 5 p.m., in the city council chambers, the compliance committee of council will hear reasons why GrassRoots Guelph did not have the authority, or is it audacity, to support candidates on the October 2014 civic election.

The complaint made by Susan Watson, Farbridge friend, and, along with her partner, Dr. Ian Digby, donated more than $4,000 to a number of candidates from the ranks of various unions in and out of Guelph. The complaint is based on the right of a non-profit, non-partisan, incorporated organization to support candidates of choice and assist them financially if necessary.

The irony of this search and destroy effort is that the political organizations that supported the Farbridge campaign boasted of running pro-union candidates in every ward and financially supporting them.

David Galon, another Farbridge supporter, contends that it is all right for unions to be actively involved in municipal elections but not a legal citizen’s activist group, dedicated to informing the public of the dismal record of the Farbridge years.

And, how dismal was it?

Her legacy of mismanagement, misrepresentation and having her surrogates spin the truth in a manner that is almost laughable.

It all came to head in March 2014 when a judge found the city illegally terminated the general contractor of the new city hall, Urbacon, September 2008. The blame for this was placed on former CAO Hans Loewig, not the mayor, not council.

Do you believe that this was the action of a power-tripping CAO, fed up with all the missed completion deadlines, and on his own, threw Urbacon off the job? Well, as it turned out, the vast majority of voters didn’t believe it and the mayor lost her re-election bid.

That March 2014 judgment was when the people decided they had enough of Karen Farbridge and some of her councillors who either quit or were defeated.

The real cost of that monumental error in judgment is still not known. An educated guess it is north of $18 million when the city’s legal fees, settelements of other associated lawsuits and payments to third parties such as the subcontractors are made public.

So, Chief Administrative Officer Ann Pappert, a Farbridge hands-on choice for the job, said the Urbacon settlement will not affect property taxes. She further said the $8.89 million settlement with Urbacon will be paid with your savings from three reserve funds and the funds would be replenished over the next five years.

On April 25, 2015, council approved the highest property tax increase in five years of 3.96 per cent.

Enter stage left, the oracle of ward six, Karl Wettstein. He moved that instead of the $900,000 that was to start the replenishment of the vacated reserve funds, that council approve only $500,000. His motion included shifting the responsibility of finding a new plan to re-fill the $8.93 million taken from the reserves to the city staff.

At this rate, the Urbacon costs will be around for your grandchildren to pay. That is if they can afford to live in Guelph.

But hey! That same night council approved spending $600,000 on multi-use paths on busy Woodlawn Avenue.

If this wasn’t a spit-in-your-eye to the citizens of Guelph, we don’t know what is.

But this soap opera is not over yet. Susan Watson, along with her lawyer from Toronto, is determined to destroy the fundamental right of citizens under the Charter of Rights – freedom of association – to gather and oppose political thought and action without frivolous attempts to destroy that right.

Take some time to attend the Wednesday night meeting and show support for Glen Tolhurst, a decent man who offered his experience and knowledge to the voters of ward six. He lost and the reason for this Watson-inspired charade is, what?

Even more interesting is who is paying for this exercise?

Guelph needs a city Auditor General to end the Farbridge multi-million dollar mistakes

Posted June 29, 2014

Ontario’s Ombudsman, Andre Marin, recently addressed a gathering of municipal finance officials in London, Ontario.

He pointed out that 92 per cent of the 444 Ontario municipalities have no oversight of their finances and operations. In fact, only Ottawa, Toronto, Oshawa and Sudbury have Auditor Generals (A/G) overseeing their operations. Sudbury and Oshawa are on the verge of dumping their A/G’s because they delivered negative reports to the councils.

Yep, if you don’t like the message, just shoot the messenger.

The city will reply that Deloitte and Touche, a major independent audit and accounting firm, review city finances annually. Note the word “review”. Deloitte does not do an in-depth audit but employs parameters set by contract with the city.

An Auditor General, they’re not.

In Guelph, the council hired an internal auditor to dig into operations and she came up with a doozie reporting in 2013 city staff overtime costs were $5,067,000. It was twice that in 2012. Her investigations are only the tip of the iceberg that can sink the good ship SS Guelph.

Fortunately for citizens she’s still around. But her job is limited and controlled by senior staff. What is really needed is an Auditor General who has authority to oversee all city finances and operations without political interference.

The Auditor Generals, in the aforementioned cities, are appointed for five years. In the case of Sudbury the A/G appears to be surviving day-to-day. Oshawa renewed its A/G for only two years. This is against the provincial legislation that set up the municipal A/G system, requiring a five-year term of office.

Now along comes the Association of Municipalities of Ontario.  That organization, composed of elected officials from Ontario’s municipalities, is dead against the addition of Auditor Generals poking into their municipal operations.

Why is that? Both the federal government and most provinces have Auditor Generals overseeing their operations and finances. You don’t have to go very far to discover the need of such an independent officer in the City of Guelph.

In fact, last October, the citizen activist group, GrassRoots Guelph, delivered a four-page petition to the Ontario Ministry of Municipal Affairs and Housing that detailed several instances of questionable financial mismanagement and operations.

The petition was signed by 162 taxpayers when the Revised Statutes of Ontario Act only required 50 signatures. Ministry officials later confirmed that the petition figures were accurate. Yet the Minister at the time, Linda Jeffery, rejected an audit of the city’s finances and operations with no explanation.

Shortly after, she left office to run for mayor of Brampton.

The Chief Administrative Officer of Guelph’s public servants called the citizen’s petition “a waste of time.” Minister Jeffery’s letter contained no such reference. So no matter what we complain about in Guelph, the majority of elected officials doesn’t care what citizens think or know about their governance of our city. On top of that, the senior executive directors of the Guelph staff share the same views as their political masters. It is apparaent that much of the staff has been politicized through threat of job loss and other intimidation.

What’s that old expression: “Go along to get along?”

It appears the deck is stacked against the citizens living in Ontario’s municipalities. This AMO entitlement attitude is endemic of the disdain for those who once elected them.

So far in this nomination period every member of council who supported Mayor Farbridge, has declared their candidacy, plus two former Farbridge councillors. As a public service, here are their names: Karen Farbridge; W2 – Ian Findlay; W3 – Maggie Laidlaw and June Hoffland; W4 – Mike Salisbury; W5 – Leanne Piper, Lise Burcher, Cathy Downer; W6 – Todd Dennis and Karl Wettstein.

There is only one-way citizens can protect themselves against these uncaring and arrogant politicians and that’s to defeat them October 27.

GRG is dedicated to informing voters of how their city and treasure have been abused by these councillors. Also, to encourage candidates for council who are motivated to return our city to fiscal responsibility, common sense and restoration of the public trust.

The 2014 election will either result in more of the same from the Farbridge administration or an election of a majority of council who will bring fresh ideas, energy and business to the city. Mostly, they will restore the public trust that has been sneered at by those in the administration. Overseers who feel they are entitled to treat the citizens as pawns in their grandiose schemes to change our city.

Step one is to hire an Auditor General for Guelph to level the playing field.

We don’t always agree but this time the Mercury got it right

Posted February 27, 2014

The Guelph Mercury has been the paper of record in our community for many years. I have had complaints and differences of opinion with the editors.

This week, the paper’s editorial of the city’s response to the Ministerial letter declining to proceed with an audit, drew unusual over-the-top comments from the Chief Administration Officer and the Mayor.

But the Mercury editorial took a balanced response and quoted parts of Minister’s  letter, also received by GrassRoots Guelph members.

Thanks to the Mercury editors who kept their heads. They produced a commentary that was fair and accurately reflected the intent of Minister Linda Jeffery in her letter to all parties.

She never said nor inferred that the GRG petition was a “waste of time.”