Tag Archives: Guelph Hydro

Swimming upstream against a tsunami of incompetence

By Gerry Barker

August 23, 2018

More than two years ago, I asked the Ontario Ombudsman office to assist me in obtaining the minutes of a city council closed-session meeting conducted December 10,2015. That meeting approved salary and bonus increases to the four senior staff managers that totaled $98,202.

At the time of the request, only council and some staffers knew what those increases were and why was there no explanation?

The Ombudsman representative told me that that office could not assist because “Guelph had its own special investigator of closed session meetings” … Amberlea Gravel located in London. This organization was hired by the city in 2008 and had been on retainer for the past ten years.

I filed a request for the minutes through the city clerk’s office. It took more than four months to be told that my request was denied. By that time, the increases had been revealed when the 2015 Sunshine list was published in March 2016.

To this day, the city administration has never explained why it withheld that information for almost four months and has yet to acknowledge it.

The cover-up was controlled behind closed doors.

It got me thinking this year about the methods used by the current Guthrie administration to suppress public participation in the business of the city.

So I checked with the city clerk and requested how many closed-session meetings were held since January 2015 to a couple of months ago.

I was informed that in 2015 and 2016 there were 41 such meetings held in each year. That’s 82 over 24 months. That number dropped in 2017 when the council voted to conduct its business acting as the ‘committee of the whole.’ Last year there were 12 closed-session meetings with a similar number this year to date.

Why does this matter?

It is a slippery slope that allows city council and senior staff to virtually, make decisions in secret, without public input or knowledge. It results in pre-digesting the contentious items of business without telling anyone.

That’s how the Farbridge administration wasted millions on the Guelph Municipal Holdings Inc (GMHI) by imposing silence for four years using closed-session meetings.

To prevent leaks of the details of those closed-sessions, the hammer over the councillors was the threat of the Integrity Commissioner investigating the alleged misconduct and potential penalties.

The scope of this GMHI ‘green’ adventure was to create power self-suffiency and potential heating and cooling of downtown building and the Hanlon Business Park.

It was finally exposed following the defeat of the former mayor in 2014. It took until May 2016 before the awful truth was revealed. Ironically, the report was presented by GMHI CFO Pankaj Sardana and signed by Chief Administrative Officer (at the time) Ann Pappert. Ms. Pappert was appointed Chief Executive Officer of GMHI in 2011. So, she was wearing two executive hats and had to have intimate knowledge of the city and GMHI operations for four years.

But it gets better, or worse as the case may be. The former mayor was chairperson of the GMHI Board of Directors. Because of her position as mayor and head of GMHI that included Guelph Hydro, she named four members of council to the GMHI Board.

These included Councillors June Hofland who was also head of the council finance committee, Karl Wettstein, Lise Burcher and Todd Dennis. This gave Ms.Farbridge complete control of both the city and GMHI.

The disturbing situation some four years later, is that the financial mess is still to be cleaned up as contracts and operation of the District Energy pumps are still operating to supply hot and cold water to five buildings downtown, including the Sleeman Centre and River-Run theatre across the street.

Best estimate of the cost of wrap-up will require $17 million and counting. The bottom line is there remains insufficient revenue to continue operating GMHI but the problem has yet to be resolved. The purchase of GMHI shares by Alectra may solve the situation. According to the merger agreement, the proposed Alectra Inc. dividend will be paid to GMHI, not the city.

The Guthrie administration has promoted the sale of GMHI shares, which are worthless, to Alectra Inc as part of a merger agreement. The data shows that the owner of Guelph Hydro ‘s tangible assets including poles, wires, substations, and equipment is the subsidiary corporation Guelph Hydro Electric Services Inc.

And who owns GHESI? Why it’s GMHI. That’s why Alectra is ‘purchasing the shares of GMHI.

How did we get into this pickle?

Because as citizens we were denied important information and details including a supportive business plan that made sense, not chaos.

It was a carefully orchestrated scheme that was under the control of a city council, of which most members were bereft of skills, financial acumen and conscience.

So what does the Guthrie council do? They approve entering an agreement with a private corporation to redevelop the Baker Street parking lot into a spiffy downtown showcase of mixed use including a new library, businesses, shops and residences.

The estimated cost of this grand design is unknown. One estimate said between $314 and $350 million. This proposal won’t start until 2024. Citizens have no information about the city’s share of the development. And it won’t be ready for occupancy until at least 2028.

When is this stream of building abortive monuments going to stop? There is plenty of blame to go around. But until we elect responsible and experienced councillors we will continue swimming in a sea of uncontrollable, ego-driven waste of resources.

 

 

 

 

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One man’s opinion: Was there a conspiracy to merge Guelph Hydro instead of selling it?

By Gerry Barker

August 13, 2018

As many viewers know, guelphspeaks.ca has been a severe critic of the proposed merger between Guelph Hydro and Alectra Inc, the parent corporation of Alectra Utilities.

I call it the steal of the century.

The onus of this multi-million dollar giveaway lies with those 10 members of council who, on December 13 2017, voted to approve the merger. The truth, as it is gradually coming out, is that the council majority had already taken the bait and decided to approve the complex deal months before it took shape.

Despite late hour protests by citizens, including 22 who appeared before council expressing the need for more truthfulness, clarity and delay until the people understood what was at stake. Protests denied.

We have yet to be told how much GMHI cost the city over five years.

What did ten councillors know that we didn’t?

As a public service, here are the names of the ten: Mayor Cam Guthrie, Councillors Dan Gibson, Andy Van Hellemond, June Hofland, Mike Salisbury, Christine Billings, Leanne Piper, Cathy Downer, Mark Mackinnon, Karl Wettstein.

Councillors Phil Allt, James Gordon and Bob Bell voted against the approval.

In my opinion, there is no public record of discussions by members of council to accept the terms and considerations of this merger. The public, those people who actually own Guelph Hydro, were totally ignored by the majority of council in making the decision to merge with Alectra Inc.

So what is the truth and consequence of this decision? In my opinion, it was a conspiracy to bail out the multi-million dollar financial losses incurred by the former administration operating Guelph Municipal Holdings Inc. (GMHI) that included Guelph Hydro.

It took more than a year to finally be told the extent of the failed GMHI scheme.

Those losses and wasted resources were a stain on the city’s account books. The council realized that not even the financial resources including the credit rating of the Corporation of the City of Guelph could sustain and repay the losses.

Since early 2015, the administration has quietly worked behind the scenes with accountants and lawyers to extricate itself from the GMHI disaster in creating a system of power self sufficiency and incorporating it with a geo-thermal hot and cold water delivery to a small number of to commercial and hi-rise residences.

City council was frequently blinded as GMHI business was conducted in closed sessions for more than four years. The public, including this writer, had no clue as to what GMHI was doing.

That is, until May 16, 2016 when Chief Administrative officer, Ann Pappert signed a report along with CEO of GMHI Panaj Sardana, that revealed parts of the looming scandal that would have a disastrous impact on the city’s finances.

In mid-July 2016, a staff report provided additional information that gave more insight into what had occurred in the five years that GMHI operated in almost complete secrecy.

The plans created under the leadership of former Mayor, Karen Farbridge, were flawed and executed without the proper and necessary checks and balances.

Until the May 16 report there were many people, city staff and elected officials, who knew what was unfolding and never said a word.

The players

Let’s be frank, this could not have happened without the support and loyalty to the former mayor. Included were key staff members and some councillors who served on the GMHI board of directors. These included Lise Burcher, June Hofland, Karl Wettstein and Todd Dennis. Wettstein is not a candidate this year, Hofland and Burcher are candidates and Mr. Dennis is no longer associated with council.

It is important to note that former CAO Ann Pappert was also the Chief Executive Officer of GMHI for four years. The closed session meeting of council December 10, 2015 was when the four senior managers received the salary and bonus payments totaling $98,202. Ms. Pappert, Deputy Chief Administrative Officers Derrick Thomson, Al Horsman and Mark Amorosi were knowledgeable of the GMHI operations and problems.

Today only Derrick Thomson remains with the city as CAO although he resigned in January 2016 to take another position then returned in June to take over as CAO.

Not one of those councillors associated with GMHI, spoke up about the GMHI operations. In my opinion, they committed the highest form of dereliction of their sworn fiduciary responsibility. In fact, they were all paid extra for participating on the GMHI Board.

Coun. Karl Wettstein declined to participate during a council meeting discussing the   GMHI situation on the grounds that because he received remuneration for his membership on the GMHI board, he declared a perceived conflict of interest based of his financial connection.

But that didn’t stop Coun. June Hofland and Mr. Wettstein from voting for the merger of Guelph Hydro.

The extraordinary part of approving the merger is that those ten councillrs couldn’t have known what they were approving. The agreement was still being negotiated and it wasn’t completed until February, this year. That’s when a written proposal, containing 19 documents was available on request. Some of which had major redactions, Alectra Inc. and Guelph Hydro presented it to the Ontario Energy Board for approval.

No date has been set for the OEB to conduct a hearing and make its decision. There are four interveners who will ask the OEB to reject the proposal. A spokesperson for the board estimated that the hearing will not be held for up to 12 months.

Based on that statement, no decision will be made before the October civic election.

Entering from Stage Left, the SOC

The framework for this abortive, agreement hatched for the most part in closed sessions, was created in the fall of 2016 by the council-appointed Strategies and Options Committee aka SOC. It was originally co-chaired by Chief Administrative Officer Derrick Thomson and Guelph Hydro Chief Executive Officer Pankaj Sardana. There were three other members on the committee who we’ll call civilians.

There were no elected officials on the committee.

The structure of the SOC changed as Hydro Chair Jane Armstrong replaced Mr. Sardana. Two other members were replaced. This change occurred prior to February 2017 when council made a major decision, in open session, to remove the option of selling Guelph Hydro from further discussion or negotiation.

So why was council told to dump the option of selling the $300 million profitable, publicly-owned power distribution systems serving 55,000 customers?

I have learned that there were at least two neighbouring municipalities that expressed an interest in buying Guelph Hydro. Because this was discussed behind closed doors, we’ll never be told who they were.

The reason that the SOC was instructed to stop selling the crown jewel of Guelph remains a great, untold story of backroom intrigue and arm-twisting.

But the reason is clear that the massive debt accumulated by the Guelph Municipal Holdings Inc., along with Guelph Hydro, chaired by the former mayor, had to be dealt with on the city books.

For the record, this merger is to get rid of that debt by giving away Guelph Hydro and its assets to Alectra Inc for almost nothing. You don’t have to hold a PhD in accounting to figure this out.

How did the city get out of this hole created by a former administration without borrowing money from a recognized lender such as a bank or credit union?

Welcome to Trader Joe’s

The answer friends is they made a deal with the devil and traded Guelph Hydro and all its functioning assets to Alectra for a tiny share of Alectra Utilities’ profits of just 4.36 per cent but only sharing in 60 per cent of Alectra Utilities profits.

Voila! The trade kicks the accumulated debt of Guelph Hydro controlled by GMHI. The merger agreement states:

“The purchase by Alectra Inc. of all the issues and outstanding shares of Guelph Hydro held by Guelph Municipal Holdings Inc. a wholly owned corporation of the City of Guelph.”

It’s important to note that Alectra Utilities is a subsidiary of Alectra Inc. This corporation is the so-called “purchaser” but Guelph only shares in the profits of its ubsidiary corporation.

Here’s the brutal truth. Alectra Inc. once approved as the new owner of Guelph Hydro, is dropping that brand name as soon as the OEB approves the merger. Here’s another possibility, Alectra Inc. can sell the assets of Guelph Hydro to the highest bidder and walk away with millions.

Mayor Guthrie keeps saying that the city is giving nothing away when asked about the proposed merger.

Did you know that the city admits it has spent YTD some $2.6 million of your money to sell this deal to us. The head of the city’s communications department was the key driver of the campaign to convince us with slanted polls and town halls where few people turned up.

Then just before the vote to approve the merger, the city announced that it was receiving an $18.5 million “special dividend” from Guelph Hydro as soon ad the deal is approved.

So our council is so smart to believe that getting $18.5 million of our own money is a fair trade for a $300 million corporation that the citizens happen to own.

Alectra Inc. is virtually getting a very valuable asset for nothing. The city negotiators were even willing to give Alectra the Hydro reserve cash but they declined.

And why not? They just got the whole enchilada for Pesos on the dollar.

Can you imagine this happening in a private corporation?

Those remaining eight councillors running for re-election will have to explain why, why did they fall for this grand theft Hydro?

It’s insulting and deplorable that in the new Working Together community report addition to the city website, the claim is made that city assets have increased by $13 million and the debt has been paid down by $24.4 million.

It only goes to prove that there is a sucker born every minute. Only we are the suckers who have experienced the malfeasance of those councillors who approved this deal.

In my opinion, there is strong evidence that this is a major cover-up that has the odor of conspiracy to defraud the citizens of a valuable asset to settle the mismanagement of the previous administration.

I believe there are grounds here to have an investigation by the Ontario Attorney General to determine if there is evidence of a crime being committed.

This isn’t going away.

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Say hello to Guelph Tomorrow, the new people’s participation association

By Gerry Barker

July 29, 2918

Please Note: There is a lot of material in this lengthy piece. It is part of the long march of electors to voting day, October 22. Check out Guelph Tomorrow’s website opening in mid August for reliable updates and information.

This is composed of like-minded citizens who reject the policies of the past three councils that have conducted the people’s business chiefly behind closed doors. The city debt has never been higher. By taking development fees from other projects, public buildings have been financed outside the box of financial management. Millions have been lost on failed energy and environmental projects such as the Guelph Municipal Holdings Inc’s failed projects.

The reserve funds have been depleted to a point that the administration will not reveal. In 2009, Coun. Leanne Piper was quoted that the city held $70 million in reserve funds. Would she care to update us on that one?

This occurred over the past 12 years because we the people let it happen. We elected ward councillors in the majority who collectively, were controlled by a mayor and professional staff. The former mayor who bragged that she was turning Guelph into a world-class leader in waste management and other environmental projects drove the agenda.

It’s time to elect and support individuals who are politically in the centre of the political spectrum. Guelph Tomorrow will assist those councillors running for the next four years to ensure that our municipal management must be conducted with transparency, with active accountability and open government.

This means shutting down the closed-session meetings of council that suppress public participation. It includes a quarterly summary of the financial status of city operations distributed through the Hydro mailing system.

Most important is to stop the annual property tax and user fees increases that are crippling the city and exceeding the inflation as set by the Consumer Price Index currently running at 2.5 per cent.

When was the last time you received a financial statement from the city?

For example, under the current Guthrie administration property taxes alone have increased by an estimated 17 per cent in four years.

To pay for all the mistakes, the Guthrie council approved giving away Guelph Hydro lock, poles, wires and most of the staff for a tiny dividend from the acquiring corporation.

It is a recipe for disaster, especially for lower income folks, those on fixed incomes and functioning below the poverty measurement.

In 12 years, the majority of a highly-organized political organization that operated below the public’s radar has shattered the public trust.

This group manipulated the agenda to promote their misguided and unreliable projects.

Let us count the legacy of political Action and its impact on the citizens.

Start with the Community Energy Innovation plan that was the mother ship of such leftist failed projects.

The Organic Waste Processing Facility cost $34 million and has yet to turn a profit. It imports wet garbage from Simcoe County and the Region of Waterloo, both of which are paying less per tonne than the basic operating costs.

Reason? The facility was overbuilt to the extent that its capacity was six times the needs of the City of Guelph. This is an example of a leftist dream that has resulted in the city having the highest waste collection and processing in the province.

The kicker? Don’t expect to get compost even though you paid for it

The $23 million over budget cost of the new City Hall complex took the end cost to $65 million. The settlement to the general contractor, Urbacon Buildings Group, was $8 million following judgment by a Superior Court judge.

The Guelph Municipal Holdings Inc. built a district Energy scheme that included installing a geo-thermal piping system to supply hot and cold water to five nearby buildings. Coupled with other zany projects costing the citizens according to the KPMG audit some $60 million in shareholder equity.

The list of wasted funds is extensive. What it has accomplished is forcing Guelph taxpayers and citizens to pay for it. The result is the city has become one of their most expensive places to live in Ontario.

Guelph Tomorrow’s mission:

Transparency, Active Accountability and Open Government in all city operations.

The No Frills plan to reform and change our city to be less proactive and more reactive to measure and control management through the council and not the professional staff.

That’s why this election is so important.

Just recall the recent announcement that the city was entering a Public Private Plan to redevelop the Baker Street parking lot into a $350 million mixed-use project including a new downtown library of some 88,000 square feet.

Plans call for shovels in the groun in 2024 and occupation in 2028 barring any delays, heritage or environment problems. By just calculating the effect of inflation on the cost of the project over ten years is easily an estimated 30 per cent or more than $105 million.

Guelph Tomorrow is in favour of affordable development but not long-term schemes designed to ensure re-election of city councillors including the Mayor.

The attached No Frills reform package is necessary to halt spending on projects that bind future councils.

First, we have to clean up the mess and rebuild our city with fair taxes and fees we can all afford today but not tomorrow.

The No Frills Action Plan for the People by the People

Here is the Guelph Tomorrow No Frills Action Plan to return common sense and councillors’ fiduciary responsibility to the administration.

No Frills means hiring an Auditor General to supervise the internal auditors.

No Frills means the city auditor will complete a full audit of city finances before submission to the Ministry of Municipal Affairs.

No Frills means closing down Guelph Municipal h\Holdings Inc. and removing Guelph Hydro from GMHI returning it to the city as a separate department

No Frills means halting capital spending until the audit of the city finances is completed.

No Frills proposes a new senior management structure to change with a City Manager heading the staff with Directors in charge of major departments.

No Frills recommends that a reorganized administration will include an executive management team composed of the Mayor, Deputy Mayor, City Manager, City Clerk, City Solicitor, Chief Financial Officer, Director of Public Services, Director of Environmental, Engineering and Planning. The City Manager acts as chair. Ex officio would include the Chief of Police, Fire Chief and Director of EMS.

No Frills recommends that the first responder departments, Police, Fire and EMS be amalgamated into the Public Safety Department. Chair would be rotated every two years between the three heads of divisions.

No Frills means stopping the merger of Guelph Hydro and Alectra Utilities.

No Frills means closing down Guelph Municipal Holdings Inc. and removing Guelph Hydro from GMHI, returning it to the city as a separate department.

No Frills means Guelph Hydro board of three members will be elected for four years.

No Frills encourages public participation in all areas of the administration.

No Frills means that the status of finances in all reserve accounts and the purpose of each and be revealed to the people.

No Frills means evaluating all polices including NGO subsidies and donations.

No Frills recommends on the advice of the Executive Team to restore the committees of council with members receiving a stipend based on attendance.

No Frills means scrapping the protocol allowing closed-session meetings. Only those conditions for such a meeting are to be used according to the Ontario Municipal Act.

No Frills means a review of the purchasing and procurement system by the CFO and Internal Auditor filing their report to the Executive Team.

No Frills mean freezing all salary and benefits until the city audit is completed.

No Frills means ordering a staff rationalization review by an independent authority.

No Frills means reviewing all by laws by the City Solicitor and reporting finding to Council.

No Frills means investigating to change the University “B ed Tax” law in lieu of property taxes.

No Frills Communication Plan

No Frills means publishing a summary of the city’s financial status every three months including budget variances.

No Frills means freezing all communications, contracts and systems.

No Frills means the General Manager of Commications will conduct a weekly media news conference at City Hall.

No Frills means recognition of staffers for operational excellence as recommended by Department Directors.

No Frills means that any closed-session meeting conducted under the Ontario Municipal Act must be summarized by the Mayor or designate within 24 hours.

No Frills fixes of Property Taxes and User Fees

No Frills means freezing property taxes to 3 per cent for 2019 and 2020.

No Frills means immediate elimination of the 2 per cent property tax levy.

No Frills means eliminating the storm water levy on Hydro bills returning it to operational expenses.

No Frills means freezing all user fees pending a review by the CFO.

No Frills mean freezing all planning and development approvals pending a review by the Director of Environmental, Engineering and Planning.

No Frills steps to fix procedures, protocols, and governance issues

No Frills means dismissing the Integrity Commissioner.

No Frills means closing down Guelph Municipal holdings Inc. andf removing Guelph Hydro from GMHI returning it to the city as a separate department

No Frills means dismissing the closed-session investigator Amberlea-Gravel of London. Replace with the Ontario Ombudsman’s services.

No Frills means review of the Council Code of Conduct.

No Frills means staff accountability at all levels.

No Frills means rewarding and encouraging staff performance and efficiency.

No Frills means courtesy and civility, at all levels of the administration, is required.

No Frills means that complaints by the public must be dealt with expeditiously.

 

 

 

 

 

 

 

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Dancing with the devil: A tale of two municipalities dealing with Alectra power distribution

By Gerry Barker

June 25, 2018

Remember last December 13 when Guelph city council approved merging Guelph Hydro with Alectra utilities, a subsidiary of Alectra Inc?

Well it turns out that the Town of Collingwood had a six-year partnership with an outfit called PowerStream. This corporate entity of that operate, PowerStream, is also the power distribution system in Mississauga wholly owned by Alectra Inc.

In 2012, PowerStream purchased a 50 per cent interest in Collingwood utilities operating the power distribution and water system for Collingwood known as Collus (Collingwood Utility Services Corp.) At the time Mayor Sandra Cooper along with the head of the Utilities Corporation told council that PowerStream was paying $15 million for 50 per cent of the utility.

In a separate issue revealed later, the mayor’s brother, former Liberal MP Paul Bonwick, was working with PowerStream plus other companies doing business with the town.

Citizens complained about Paul Bonwick’s involvement with PowerStream, who was hired on a monthly basis by the acquiring corporation. In January 2012, PowerStream successfully bought a 50 per cent share of Collingwood’s public utility company, Collus, for $15 million allegedly.

Acting town CAO, Ed Houghton, told CBC News that PowerStream’s projected growth and “recapitalization and debt to equity ratio” promised a better long-term return for taxpayers, and noted the sale was approved by an 8-0 vote by council.

Does this sound familiar?

Didn’t Alectra make a similar pitch to Guelph city council last December with adjustments for technical blue-sky changes in power distribution?

Our guys fell for the pitch by Alectra voting 10-3 to accept the draft agreement.

The big difference between Collinwood’s experiences dealing with PowerStream aka Alectra is that they were allegedly paid for half of the Collus operations.

What did Guelph get for giving Guelph Hydro away?

Following the February 27, 2018 town council meeting, the CBC reported that lawyer William McDowell, hired by the town, outlined how a judicial inquiry could help answer who benefited from the sale, potential conflicts and where the money from the sale went.

At the sane meeting, Collingwood town council voted to invoke a rarely used section of Ontario’s Municipal Act to set up a formal judicial inquiry into the 2012 sale to PowerStream of a 50 per cent stake in the Collingwood Utilities Corp.

Complaints of citizens prompted an investigation by the Ontario Provincial Police. To date no charges have been laid.

That $15 million price, as it turned out, was never paid and the town received only $8 million.

Then, PowerStream offered to purchase the 50 percent of Collus stock it did not own for an alleged $13 million.

The February 27 meeting of town council voted 5-1 to launch a judicial inquiry with Mayor Cooper the only dissenter.

In November 2017, PowerStream, now known as Alectra Inc. the corporate owner of 50 per cent of Collus, said it would sell its shares back to the town in a buy-sell agreement.

Norm Loberg, chairman of Alectra Inc. said: “Working closely with the excellent staff at the utility, we were able to improve reliability, enhance service and offer a broader selection of conservation programs.”

It was a similar comment he made to Guelph city council last December only the promise to establish a Green Technology Centre in the former Guelph Hydro headquarters differed from the Collingwood statement.

So if what Loberg tells Collingwood council is true, why do they want to sell their interest back to the town?

Further, why three months later is the town prepared to launch a judicial inquiry into the original purchase of the utility and the six years of partnership with Alectra?

Deputy Mayor, Brian Sauderson, who voted for the inquiry said: “”Who benefited? If things were done in such a way that people benefited, then people in this community need to know.”

Is there a message here for Guelph city council?

The merger of Guelph Hydro with Alectra Utilities poses a similar series of questions in its impending deal now before the Ontario Energy Board (OEB).

In 2012, Collingwood at least sold a 50 per cent share in its Collus for $8 million.

Heck, that’s chump change comparing the giveaway of Guelph Hydro worth an estimated $300 million.

Who benefits from this merger? Is it the 55,000 owners of Guelph Hydro who have been paying their bills and supporting the growth of the City and Rockwood?

Read the words of the Alectra Chairman above. Should we feel comforted that city council is giving away our reliable, efficient, profitable and highly rated utility for the promise of a 4.36 per cent annual dividend of Alectra Utilities’ profit … but only 60 per cent of its profit?

Does that make sense to you?

There are 19 documents in the written Alectra proposal to the OEB. Some of the material is redacted on the alleged ground it contains proprietary information about Alectra.

The final insult to our collective intelligence perpetrated by city council was the last minute revelation that the city was going to receive a “special dividend” of $18.5 million.

Really!

To juice the merger deal just before the vote, city council agreed to pay us back with our own money! Those funds are coming from Guelph Hydro’s cash reserves. That’s public property.

This exercise has already cost the city $2.4 million just to perform its lame dog and pony show to convince we peasants that this is a great deal.

We can learn from the Collingwood experience dealing with Alectra.

Perhaps council should rethink its position in approving this merger. It’s still not too late as the OEB hearing may not even be held this year. There are citizens who have been approved as interveners.

Despite the closed-session meetings of the Strategies and Option committee, appointed by council, it may turn out to be a monumental political blunder come next October.

We all know what happened in 2014 when the people voted.

As an aside, there were more than 6,000 votes cast online in the advance poll four years ago. But the present council voted not to allow online voting this year.

Wonder why?

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Does corruption exist in our municipal government?

By Gerry Barker

June 21, 2018

In a closed corporation, that masquerades as being open, transparent and accountable as the City of Guelph, is there the potential of corruption?

Municipal corruptions is usually the result of closed meetings, manipulation of the system for personal gain or just stealing public funds.

In the last 11 years the creep of covering up the public’s business through a system of closed-session meetings that are justified by certain bylaws of which 99 per cent of the citizens have no clue.

Well, why not?

It’s because the system allows bureaucratic jargon, simplistic explanations of complex problems, lying, lying by omission, holding closed-session meeting and manipulation of the message.

Successive Guelph’s governments have gradually choked off any sensitive or political public discussion by debating behind closed doors.

The professional staff is complicit in dumbing down the message.

Four senior staff members grabbed huge increases in 2015 with the approval of the mayor and city council. They approved this $98,202 bundle in closed session. And never told anyone.

The cover-up was blown when almost four months later the 2015 Provincial Sunshine List revealed the truth.

But you didn’t hear or read about it in the media.

Is it possible these increases passed without public knowledge should be investigate by police or a judicial inquiry?

Only guelphspeaks.ca took the trouble to compare the 2014 Sunshine figures with the 2015 report for these four senior staff recipients of public funds.

But it gets better.

Five months following the December 10 meeting, Chief Administrative Officer Ann Pappert, gave her notice after some five years as Guelph’s CAO.

She stayed on the job until Derrick Thomson one of the four staff who received the secret increases, was repatriated following his earlier resignation and named CAO. Ms. Pappert left May 26, 2016

According to the 2016 Sunshine List, she received $263,000 for five months work. By comparison in 2014, she earned $219,000. These figures do not include taxable benefits

As editor and author of some of the blog posts critical of this cover-up I was sued by a DCAO. Expect more on this later.

Again, This information was only obtained from the 2016 Sunshine List. It has never been acknowledged by the city.

The Great Hydro giveaway

This is probably the greatest heist in the history of Guelph. Here’s where it we t wrong.

It was a dark and stormy night when the Strategies and Options committee appointed by council, in closed -session pulled the sale of Guelph Hydro off the table and commenced negotiations with Alectra Utilities to merge operations.

Early in October 2016, Mayor Guthrie announced an agreement in principle to merge Guelph Hydro with Alectra. The Mayor said the merger would make Guelph more adaptable to the many technical changes in delivering power to the 55,000 Hydro customers served by Guelph Hydro.

Here we go again. 90 per cent of all negotiations leading up to the agreement were held in closed-sessions. In fact we civilians didn’t even know when the meetings were held or where.

When was the last time you received a financial statement from the city?

December 13 2016, the city council approved the merger by a 10 to 3 vote.

The classic railroad job

What did citizens get out of this deal? First, they are to receive $18.5 million composed of Guelph Hydro’s cash stash. It’s our own money. Second, the city will receive an unknown annual dividend of 4.36 per cent of only 60 per cent of Alectra Utilities profits.

The brand Guelph Hydro will be gone once approved by the Ontario Energy Board and the title will be transferred to Alectra Utilities.

What’s the Guelph Hydro Corporate title worth in today’s market? First, there is $228 million in poles, wires, substations, equipment and Hydro headquarters. Throw in the goodwill, no debt, established profitability and the real value is estimated to be $300 million.

Our Mayor denies that this deal — if it can be described as that – is not a giveaway.

Is this another case of corruption when 10 councillors fail to understand their fiduciary responsibility and what they voted for?

The good news is that the OEB will probably not hear the merger details for between six and 12 months. My wife and I have been granted intervener status when the hearing will be held along other citizens.

Guess this means that the issue will be a topic of discussion during the upcoming civic election. Ya think!

Or the Ford government will throw out the Wynne plan to amalgamate the small to medium sized municipally owned electricity distribution systems.

Is there any doubt about who really could benefit from this merger?

 

 

 

 

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Guelph Hydro/Alectra Utilities’ merger is legalized theft by shutting down public participation

By Gerry Barker

April 23, 2018

Breaking News: I have just spoken with an official at the Ontario Energy Board acknowledging receipt of  our intervener letter. He explained that if the board decides not to hold an oral hearing, then only those citizens, who have written to intervene by the end of the month, would still be permitted to question a written application before the OEB. The board has announced that any hearing on this merger application may be held within 6 to 12 months. Please send your intervention letter today (either snail or email) to be part of our last opportunity to be participants in the process.

Breaking News: Congratulations to Ray Ferraro, acclaimed as candidate to represent Guelph for the Ontario Progressive Conservative Party in the June 7 provincial election.

Most of my viewers know by now why I am opposed to the Guelph Hydro merger with Alectra Utilities.

I also believe that there was a well-planned assault on the citizens to dump our Hydro to pay off Guelph Municipal Holdings Inc.’s (GMHI) millions of debt.

Think I’m kidding?

This deceptive legacy started in the fall of 2016 with the appointment of the Strategies and Options Committee (SOC) by city council. It was a propitious time as the accounting firm KPMG had completed the audit of GMHI’s finances. The results were not revealed until early January last year.

And it wasn’t a pretty picture as some $60 million in shareholders GMHI equity was worthless. There were other liabilities that created a huge hole in the city’s books. Who were these shareholders? The city council represented the citizen’s of Guelph, owners of Guelph Hydro.

Starting to get the picture?

The SOC had five members none of who were elected to council. The committee performed its duties in closed-sessions with the odd neutral public report to council.

The SOC mandate was to explore and investigate two basic options: The sale of Guelph Hydro and/or merging with a larger power distribution organization.

Now this is important to remember. It is the policy of the Ontario Liberal Government to “recommend” the merger and amalgamation of small to medium sized Local Community Distribution systems to larger privately owned municipal distribution systems. The reason? It was to encourage “efficiencies.”

The reality is the larger power corporations had a field day gobbling up the small community power distributions system often ten cent on the dollar.

Who were these acquirers? This includes Hydro One the semi-privatized Ontario power distribution corporation with only 47 per cent still owned by Ontarians.

Also Alectra Inc. that now controls power distribution systems in Brampton, Vaughan, Richmond Hill, Aurora, Markham, Hamilton, Barrie, St. Catharines, Collingwood, Simcoe county and Mississauga. Add TransCanada Pipelines to the list as the big boys take over the small and medium sized power distribution systems.

In each take over, the OEB had to approve the merger, sale or amalgamation. The deals were all over the map in terms of benefits to the little guys that varied with each proposal and the OEB approved most of the applications.

In fact, a whole new industry developed benefiting the printing industry, legal firms, financial advisors, engineering companies specializing in power generation and distribution, financial institutions, publishers and graphic designers.

The turning point

In February 2017 the SOC, in closed-session, removed the option of selling Guelph Hydro and not to be considered.

It was a sudden decision. Why would the SOC dump the sale option without explanation? In fact it was only revealed after a leak of the SOC decision made behind closed doors.

Ask yourself, why would an acclaimed community power distribution system, with an exemplary record of service, management and profitability fail to be worth at least the $228 million in book value of its assets? Such assets include wires, poles, substations, equipment, real estate, a fully equipped headquarters building plus some $22 million in cash reserves.

This decision followed a shake-up of the personnel of the SOC with Guelph Hydro CEO Pankaj Sardana being replaced by Hydro chair Jane Armstrong, as co-chair of the SOC with Guelph CAO Derrick Thomson.

What we don’t know is why the decision not to sell Guelph Hydro? That information is sealed in the closed session meeting that decided not to consider the sale of Guelph Hydro.

Alectra is no stranger acquiring municipal power systems and paying for ownership. Brampton Hydro One is an example. So, why not Guelph? You want it? Then paying for it seems logical.

The reason is simple. City council wanted the GMHI debt off its books. The only tangible asset of GMHI is Guelph Hydro.

Now you know the rest of the story

Here is a revealing fact as contained in a two-page spread in the Globe and Mail last Saturday. The lengthy investigative piece describes how the Wynne Liberals kept billions of borrowed money off its balance sheet. It is another example of the Liberal’s energy file being bungled in 2017 due to the Fair Hydro Plan to lower power rates.

You probably recall that the Liberals said they would lower Hydro rates by 25 per cent, and hold increases to the rate of inflation for four years. The Ontario Auditor General, Bonnie Lysyk, pointed out that the province had to borrow billions to pay for most of it.

Ms. Lysyk charged that the government used ‘bogus’ accounting to keep the debt off its books.

The similarities are startling comparing the Ontario Liberals juggling the numbers and the merger agreement between Guelph Hydro and Alectra giving Alectra control and title to Guelph Hydro for no cash consideration.

That agreement is now before the Ontario Energy Board (OEB) for approval.

Our last chance to express opposition to this estimated $300 million give away to Alectra, is to write a letter to intervene at an oral hearing of the application before the OEB, later this year.

After today, there are six working days remaining to have your say. The deadline for public participation notification must be postmarked no later than next Monday, April 30. If we don’t respond, the OEB states the hearing will proceed without public participation.

The opportunity to resist, for many legitimate reasons, will be gone without any recourse

There are a number of reasons why we must object to the written application by Guelph Hydro and Alectra.

Let there be no harm done

First, there is the OEB ‘s ruling that there must be “No Harm Done” in the application. Second the degree of secrecy that was used to shut down public participation by city council and the SOC. Third, the timing of the council meeting held December 13. Fourth, the written application to the OEB delivered two months later with no public announcement not made until the first week in April.

If we citizens can force an open hearing of the application, there will be legal support available to advise our opposition.

Finally, this is our last chance to stop the giveaway. For your convenience here is the OEB address and file number.

Ontario Energy Board

300 Yonge St.

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

April 23, 2018

Re File: EB-2018 –0014

 

 

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Only 5 working days left to file your letter to the OEB to stop the merger between Guelph Hydro and Alectra

By Gerry Barker

April 17, 2018

Last chance to have your say opposing the merger between Guelph Hydro and Alectra. So that citizens understand the real issue here is our city council is giving away our Hydro distribution system for shares of Guelph Municipal Holdings. Those share are worthless because the money was spent by the previous administration on failed district energy systems, solar arrays on public buildings and an expensive geothermal underground water heating and cooling system that did not have a customer base to support its operations. I estimate that the GMHI share represented public funds wasted on these projects and the loss of $60 million according to the audit performed on GMHI by KPMG. That’s your money and mine. If we do not respond and request an oral hearing when the OEB schedules the event, we have no recourse. We will be bound by the OEB decision.

Other News: A tiny story in Tuesday’s Guelph Tribune reported the Guelph Hydro  merger with Alectra is before the OEB in written form. The OEB has invited public participation in deciding the fate of Guelph Hydro simply by inviting citizens to present their objections to the OEB by sending a letter to hold an oral hearing instead of the proposed written version. What’s at stake? Your interest in Guelph Hydro will be gone in about 12 months.After April 30, 2018 there is no recourse to influence the outcome.

By sending a letter of protest today, it’s an important step in letting the OEB know that this application, born and conceived in secrecy, is not in our best interests. There is tremendous Harm being done by this proposal. It’s time for us to stop it. Read details below on how to take action.  This is the ninth inning and there are two out. GB

The long journey to give away our $300 million Guelph Hydro

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 principle 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. I don’t keep Trib papers beyond that point.

Also, the public paid “City News” carried in the Tribune had zero information, not even a news story.

Do you really believe the people 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 that was concluded in many secret, closed-session meetings that ignored the real feelings of the 55,000 Guelph Hydro customers.

Because 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.

So here’s the current situation. We have just 15 days remaining to intervene and request an oral hearing with the OEB in which citizens, registered as interveners, can state their views,

If we do 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 will likely be approved by the OEB.

How the stench of corruption hangs heavy in the air

Let’s drill down to look at the seamy corruptive practices of the public’s business.

One of the factors was the Liberal Premier Kathleen Wynne to consolidate the small and medium sized local community owned power distribution systems with larger distribution corporations.

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.”

Editor’s Note: I have posted a sample letter to intervene on guelphspeaks. ca (located at end of post). Viewers are free to use the content of this information plus their own views, to reinforce their opinions. The details of contacting the OEB are printed below. When sending your intervening letter by snail or email be sure to use the file number EB-2018–0014.  

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 for a status report on the final agreement? He seems to be a decent guy entrapped in a tangled web of power politics.

So the people directly affected by this merger agreement have just 15 days to apply for an intervener status at an OEB oral hearing.

Finally, here is the evidence that our Guelph Hydro 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 an activist, taxpayer and communicator, I want open administration, accountability, and transparency in my 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.

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.

So, what is Alectra paying for these worthless GMHI shares? More importantly, who winds up owning the title of the Guelph Hydro Corporation?

The $60 million shareholder equity loss is confirmed by the independent audit by KPMG in which the GMHI 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 dilemma for the present mayor and council.

How to dance through the Last Tango of  merger mania

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 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.

Whopper #2

The submitted agreement states that Guelph Hydro’s distribution system is “transferred” to Alectra Utilities with no apparent serious cash consideration. Mayor Guthrie keeps saying that nothing is being given away. Well Cam, you’d better check the agreement you and Alectra have already submitted to the OEB for approval.

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.

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 the 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, was 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?

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

So, here’s how to intervene before the April 30 deadline

  1. Our file number for this case is EB-2018-0014. To learn more about this hearing, find instructions on how to file letters or become an intervener, or to access any document related to this case. Please select the file number EB-2018-0014 from the list on the OEB website: oeb.ca/notice. You can also phone our Consumer Relations Centre at 1-877-632-2727 with any questions. If you are ready to send a snail mail request in your intervener application, here is the address:

Ontario Energy Board                                                                                                           300 Yonge St.  27th floor
P.O. Box 2319
Toronto, ON M4P 1E4

Your application to intervener 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 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.

In order to assist citizens wishing to intervene and hold an oral application here is a draft form to assist you to beat the April 30 deadline. Use any part of this post in your letter but your personal opinion is what really counts.

Together we can stop this and get a fair hearing.

If we don’t respond, we only have ourselves to blame. We turned over our trust to elect a council that has proven in the past three years, in the majority, to be dumb and dumber.

            Draft letter to the OEB to intervene in the merger of Guelph Hydro

Your name(s) and address

Ontario Energy Boar

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

Re File: EB -2018—0014

April   ? 2018

To who it may concern:

I (we) reside in Guelph and am customers of Guelph Hydro.

I(we) request being accepted as an intervener and the OEB order an oral application instead of the written one that has already been received.

I(we) understand that time is of the essence but have only just received the basic terms of the agreement.

I(we) believe there is great harm being done to the 55,000 customer of Guelph Hydro. The fact that the summary agreement as received by the OEB fails to guarantee any rate protection, or creates job losses of Guelph Hydro following approval of the merger.

We believe the process leading up to the city council, which represents us, voted 10 to 3 to accept the agreement in principle despite overwhelming objections from 22 citizen delegates and a petition of 76 residents protesting the proposal.

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 this merger agreement was created and executed can be questioned and is not in the best interests of the owners of the utility.

Sincerely,

Your name(s)

 

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