Tag Archives: Karen Farbridge

Executive spite boosted the new city hall project costs by $23 million

By Gerry Barker

August 1, 2019

Opinion

Part Three of Seven stories to fuel your min

It all seems like yesterday when there was a sea-change in the composition of Guelph Council, or so most citizens thought and I was one of them

The defeated councillors included Mayor Karen Farbridge, Maggie Laidlaw; Mike Salisbury was elected in ward 4 replacing Mayor-elect Cam Guthrie. Retiring from council was Karl Wettstein in ward 6, Andy Van Hellemond in ward tw

Here is the result of the 2014 civic election: the majority of progressives totaled seven. These include James Gordon, June Hofland, Phil Allt, Mike Salisbury, Leane Piper, and Cathy Downer. The uncommitted are Rodrigo Goller and Dominique O’Rourke. The moderate councilorsr include Dan Gibson, Bob Bell, Christine Billings and Mayor Cam Guthrie. Holding the swing vote in council is Mark MacKinnon, ward 6.

The story on election night was the defeat of Mayor Farbridge by rookie Councillor, Cam Guthrie.

The defeat of the mayor was the lawsuit brought by the general contractor of the new city hall and renovation of the old city hall into a provincial offenses court. In 2006, council approved the $42 million contract.

Karen Farbridge was elected mayor in 2006 and her council held a majority of 11 councillors out of 13.

Enough already!

But a funny thing happened before the contract was completed. September 18, 2008, the general contractor, Urbacon Buildings Group Inc., was kicked off the job that was 95 per cent completed. Guelph police were called to expedite the removal of all employees including the sub contractors.

The reason was, and no one was taking responsibility including the Mayor or council or senior management, admitted they were responsible.

Later, chief Administrative Officer Ann Pappert said that her predecessor, CAO Hans Loewig, was responsible for the Urbacon firing. She said his authority was covered under the CAO bylaw.

Following the time of the firing of the general contractor, Mr. Loewig was awarded a three-year contract paying $190,000 annually for his work on the Urbacon file. Ann Pappert replaced him in 2011.

At best, Mr. Loewig was a part-time CAO being allowed 12-weeks, vacation spent at his Arizona home. Mr. Loewig was hired to replace the former CAO, Larry Kotseff, as acting CAO and on contract. That changed to permanent employment in 2008 followingnthe Urbacon firing.

Urbacon did not sit idly by and served the city with a wrongful dismissal suit for $19.2 million.

Meanwhile, the Farbridge administration was faced with hiring replacement contractors to complete the project Then the city counter-sued Urbacon for $5.3 million. Next was to deal with the completion bondholder, Aviva, and the architects charged with overseeing the construction. This was followed by lawsuits from the sub contractors who were not paid for their work before the firing of the general contractor.

Once work stopped it was more than a year before it was completed, using two other contractors to finish the job.

Whew! This was a disaster caused by the Farbridge administration despite the Mayor never owning up to it. My sources said she was enraged because Urbacon kept advancing the completion date.

There were reasons for this. First, during a subsequent five-week trial in 2013 in Brampton, the court heard there were more than 300 contract changes ordered by the city. Second, there was a sense of emergency over a number of city employees still working in nearby rented offices in which the leases had or were about to expire.

The Brampton trial was wrapped up in early 2013 and Superior Court Justice, Donald MacKenzie, delivered his judgment brief in March 2014 in favour of Urbacon. It was followed up with a devastating detailed judgment in June.

This document ordered that the costs of the case were to be completed in October, the month of the civic election.

Undaunted, the city lawyer took the case to another court requesting the costs of Justice Mackenzie’s judgment be postponed until after the October civicelection. That was denied by the presiding judge who said he would not change Justice Mackenzie’s’ judgment. In August, a settlement was reached costing the city$8 million payment to Urbacon.

This was the final event that led to the mayor’s defeat in October.

Shortly after, CAO Pappert announced that the city hall costs had increased by $23 million.

Urbacon, the six years of unnecessary expenses

In my opinion, as a taxpayer, this was a sloppy, self-centered series of events that spun out of control and should never have occurred.

When one thinks about it, that mismanagement, recognized as such at the ballot box, could have been used to build a new downtown library as was promised by two Farbridge administrations. Five years later, we are still eaiting.

In January last year, two city Councillors, June Hoflanf and Leanne Piper, supporters of Ms. Far bridge, during a workshop to assist women to become entrepreneurs, asked attendees to donate money to re-elect the former mayor.

Wisely, Ms. Farbridge chose not to be a candidate in last October’s civic election.

Next, Part Four of Seven:

Guelph Municipal Holdings Inc. covers-up losses of $68.3 million

 

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Was former Mayor Karen Farbridge ahead of her time, or was blinded by personal ambition?

By Gerry Barker

May 21, 20119

Opinion

In her eighth years as the head of council, Ms. Farbridge launched a composite of advanced environmental projects. She recognized the effect on the city of global climate change. She was also a masterful political strategist who made mistakes along the way. Despite her skill sets and vision she made one big mistake.

Read on and learn or recall the history of a Mayor consumed by all things environmental and turning Guelph into a world leader in self-sufficiency of waste management, banning fossil-fueled vehicles and weed whackers, stopping the use of pesticides, anything plastic that was non-bio-degradable.

She was determined to get us onto bicycles as basic transportation, sort out waste, protecting the tree canopy of the city, revitalize the downtown, building more bike lanes and reduce vehicle lanes to accommodate wider bike lanes, hiring more staff to carry out her numerous polices and projects. Finally, the cost of all this was annual incremental property taxes and user fees.

Whew! How did we survive?

In 2009, the Farbridge city council entered a three-tier government infrastructure plan in which the city was responsible for one third of the approved projects. As it turned out, the city overspent its share by adding projects including $2 million for bike lanes on Stone Road and a new $75,000 time clock in the Sleeman Centre.

These so-called environmental projects included a $34 million organic waste processing facility, to turn wet waste into compost. The facility was financed by the public since 2011, has been run by a wholly-owned subsidiary of Maple Reinders, the company that built the facility. This company also sells the capacity to other municipalities.

I requested information about the operation as to what has been the payback to the city. I was told that it was not expected to be profitable as it was a city waste management facility and not intended to make money.

This recent explanation summarizes the disregard that the city administration at the time, denied public information. The plant was overbuilt being licensed to process 60,000 tonnes of wet waste per year. The city of Guelph’s 10,000 tonnes of wet waste per year is miniscule. Today, the facility is accepting wet waste from the Regional of Waterloo and other municipalities.

It now appears that the city made a terrible deal and a high price to process its own wet waste in the past eight years.

Well, somebody is making money in this deal, and it’s not the citizens of Guelph who financed it. We can’t even access the finished compost that is sold privately by the operating company.

The $23 million mistake that took six years to explain

On September 18, 2008, there was that moment of mayoralty pique when general contractor, Urbacon Buildings Group Inc. was ordered off the construction site of the new city hall and renovation of the old city hall into a provincial offenses court.

The details are too many and complex to cover in this post, except that the original contracted price for the project was $42 million in 2006. When the dust settled in November 2014, the CAO revealed the cost zoomed to $65 million.

This dispute lasted for six years, a lengthy trial that found the city guilty of wrongful dismissal and it cost the Mayor her job losing to a rookie councillor, Cam Guthrie.

There was a municipal exhale following the election in which 43 per cent voted. Most folks pleased that the Farbridge era was over, my wife and I included.

In those heady days of electoral joy, there was a huge Farbridge controlled plan to use a small city-owned corporation called Guelph Municipal Holdings Inc. (GMHI) to take over Guelph Hydro to create radical new plans to make the city self-sufficient generating its own electricity and burying pipe underground to supply hot and cold water to a small number of building near the Sleeman Centre.

The mayor’s plan was to install solar panels on all public buildings to be installed by a subsidiary corporation of Guelph Hydro. Installing two natural gas pumps in the Sleeman Centre and Hanlon business Park cost $11 million.

The impact of the GMHI activities were chiefly unknown by the public. In late 2015, council engaged the accounting firm KPMG to conduct a consolidated audit of GMHI. In May 2016, the management of GMHI told council the bad news that the GMHI finances were in disarray and prospects of saving the components was remote. On May 26, 2016, The Chief Administrative Officer of the city and Chief Executive Officer of GMHI for four years, Ann Pappert, left the city staff.

In July a staff investigation of GMHI painted an even more divesting report of the GMHI performance in four years.

KPMG’s audit showed a shareholder’s liability of $60 million.

The disposal of Guelph Hydro

In 2017, city council appointed a Strategic Options Committee to sort through the options to dispose of the city-owned Guelph Hydro that in its 2016 financial report showed a book value of $226 million.

To this day, I maintain this was a giveaway of our power distribution system for peanuts. I believe it was to help wipe out the huge GMHI liability for which the city was responsible. What other reason would there be?

In October 2018, Council voted to accept a merger proposal with Alectra Utilities. January 1, this year the deal closed with the approval of the Ontario Energy Board.

But in 2015, Farbridge loyalists retained the majority of the new council and remain there today. In the October civic election the Farbridge group retained the majority. Only 33 per cent of eligible voters went to the polls compared to 42 per cent in 2014..

These issues will be revisited in a future GS post. The city council still clings to the Farbridge initiatives as our taxes and operating overhead increases every year.

One closing example: Some 23 new employees were hired in the 2019 budget costing annually $9.2 million.

Result? We got a majority Farbridge-inspired council because the majority of voters did not bother to vote last October.

 

 

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Setting the record straight on the Guelph Hydro/Alectra merger

By Gerry Barker

August 20, 2018

Some days are better than others.

This past week I had the opportunity to spend time with a professional accountant who was familiar with much of the details of the proposed merger between Guelph Hydro and Alectra Inc.

Right off, this was a complex agreement containing many parts that was conducted in such a manner that defied understanding, especially to me who had to rely on city statements, devoid of the details.

As it turned out, I wasn’t the only one who didn’t get it right and for that I apologize to my viewers.

My advisor walked me through the maze of financial manipulation of city-owned Guelph Hydro Inc (GHI) and Guelph Municipal Holdings Inc (GMHI) conducted by the former Mayor, Karen Farbridge.

It turned out to be an epic misadventure of the use of public funds over a time frame from 2011 to 2014 when she was defeated. She was joined by four of her supporting councillors, June Hofland, Karl Wettstein, Lise Burcher and Todd Dennis to serve on her GMHI Board of Directors. Chief Administrative Officer Ann Pappert was appointed Chief Executive Officer of GMHI in 2011.

Without going into the convoluted explanation here is a recap.

It started in 2011 with GMHI commencing its control of the following players: Guelph Hydro Inc, Guelph Hydro Electric Systems Inc (GHESI), and Envida Community Energy Inc.

Explanation: While the city-owned GMHI and its assets, the leadership was the same, Mayor Farbridge and CAO Ann Pappert. Supporting this arrangement were councillors friendly to the mayor and her agenda.

The key to fulfill the agenda of GMHI were the profits of GHESI, owners of the tangible assets, including the poles, wires, substations, service equipment and cash to serve the 55,000 customers. The 2016 GSI financial statement put the value of these assets at $228 million.

During these four years, the GMHI operated almost entirely in closed-sessions, defying the public its right to understand what was going on.

So, what was going on?

Guelph Hydro Inc, the parent company of these assets and liabilities, was brought into the GMHI Corporation. This was done to strengthen the financial viability of GMHI that was not earning sufficient income to support its agenda and pay the operating costs.

The profits of GHESI allowed it to pay a dividend to GMHI who only paid a portion of these dividends to the city. This development provided GMHI with only one source of financing.

Following the result of the 2014 election, Mayor Cam Guthrie assumed chair of GMHI along with Coun. Karl Wettstein. It was reported that in 2014 GMHI had lost some $3.5 million.

In the middle of this was Envida Community Energy Inc., a GHESI subsidiary that was operating the District Energy pumps in the Sleeman Centre and Hanlon Business Park plus other projects. In May 16, 2016, the CEO of GMHI, Pankaj Sardana, reported to council that the Envida assets were impaired and should be written down. Further impairment occurred the following year.

In 2017 it was reported that Envida had lost $17 million on district energy. The district energy assets were worthless. This in itself was a growing cash liability that needed to be addressed.

During 2016, the city appointed a Strategies and Options Committee (SOC) to examine the options available to move forward with GHESI. Council removed the option to sell GHESI at an open meeting.

My accountant showed that the GHESI had total assets of $228 million and liabilities of $159 million in 2016, not as how I had described it. GHESI’s value for the merger that was $129.4 million. While I speculated the proposed merger was a $300 million giveaway, it appears, based on the evidence now obtained that the merger value is is in exchange for a 4.63 per cent of Alectra Inc.

The merger agreement consists of a special dividend to the city of $18.5 million. While I believe that it is being paid with our own money, I now believe it is a righteous adjustment to clear up the financial morass created by the former mayor and her GMHI board of directors.

So what does the city get in return for agreeing to this merger? I have been informed that there will be a dividend paid annually by Alectra Inc. based on a pooled share of 60 per cent of that corporation’s profits. Alectra Inc is a $2 billion corporation and our share will be 4.63 per cent of that pool of profits. Right now it’s difficult to determine what the dividend will be. We’ll know better following the potential approval of the merger by the Ontario Energy Board and with the first dividend payment.

The agreement has the dividend paid to GMHI. It currently owns GHESI and will own the Alectra Inc. I believe that GMHI, if the agreement is approved, should be closed down and the dividend paid directly to the city.

In my opinion, GMHI was a dreadful episode in our city’s history serving the personal agenda of the operators including Karen Farbridge, Ann Pappert, Councillors Karl Wettstein, June Hofland, Lise Burcher and Todd Dennis those elected officials who served on the GMHI board. They failed their sworn duty to protect and represent the citizens who elected them.

In my Opinion, for that reason, GMHI board members and council candidates June Hofland and Lise Burcher should not be considered for re-election.

The solution to continue supporting GMHI’s condemned function is to close it down.

According to my source that the end of all this is a $17 million loss, and the clean up has yet to be completed.

It is possible that it will take ten years of Alectra dividends to eliminate this increasing loss.

Finally, I am not yet prepared to accept this as a good deal until all the facts are known. I appreciate the advice I have received from a professional accountant and will continue to monitor and report.

 

 

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After four years Karen Farbridge is alive and well on the city’s website

By Gerry Barker

August 5, 2018

Contained in a new glossy addition labeled “Working Together” that can be found on the city’s website, we discover the omnipotent presence of the former mayor circa 2007 to 2014.

The following outlines some of the projects and policies of the former mayor. In fact there is a large presence on this new section of the city’s website. Today, we only address some of the topics of interest and concern of citizens in Guelph. There will be more coverage in the next few weeks, exclusively in guelphspeaks.ca.

So you thought when Karen Farbridge was defeated in 2014 the voters rejected her and her policies.

Nope. She’s still present and on the record according to the Guelph city website’s “Working Together” a new remake featuring the Guthrie years as Mayor

Any presumption in early 2015, that new Mayor, Cam Guthrie, would keep his word to end the so-called “Guelph Factor” and keep property tax increase no greater than to the Consumer Price Index. That flew out the window March 2015 when city council passed a property tax increase of 3.96 per cent. The CPI rate at the time was reported to be 1.99 per cent.

It was the beginning of an administration headed by a Mayor who is now described as Farbridge ‘Lite’, and with good reason.

In December 2015, the administration’s greatest test however fell upon the administrative professional staff. Four top city managers were granted, in closed session, huge increases totaling $98,202. Within four months, CAO Ann Pappert, Al Horsman and Derrick Thomson had resigned. Only Deputy Chief Administrative Officer Mark Amorosi remained.

The senior management was gutted and the city council struggled to maintain some form of leadership. CAO Pappert left May 26, 2016. Former senior manager Derrick Thomson resigned in January 2016 to take a job in his town of residence. He was recalled and took command of the professional staff in June 2016. Former Chief Financial Officer, Al Horsman left in August 2015 for the CAO’s job in Sault Ste Marie.

The Sunshine List showed that Ms. Pappert received $263,000 for five months work and Mr. Horsman received $181,000 for his eight months tenure in 2015.

The lady remains a featured player in the Grand Royal City Opera

After reading the details on the city website, one would believe that former Mayor Karen Farbridge was still in charge. Even though she has been gone for almost four years, her imprint remains on the official city website. Yikes!

This can only be described as the current city councillors giving the middle finger salute to the people they work for and are responsible to.

The following is on the city’s website today:

“In November 2008, Mayor Karen Farbridge and Guelph City Council committed to the development of a new ten-year Economic Development and Tourism Strategy for Guelph — Prosperity 2020.

Prosperity 2020 will support the City of Guelph’s vision of being “the city that makes a difference”, and the strategic goal of having “a diverse and prosperous local economy.”

The Phase 2 Economic Development & Tourism Strategy will provide direction, priorities and performance measures for the transformation of Guelph’s economy over the next decade and beyond.

Here are the members of the Mayor’s Prosperity 2020 task force.

Karen Farbridge, Mayor, City of Guelph
Frank Valeriote, Member of Parliament, Guelph
Liz Sandals, Member of Provincial Parliament, Guelph
Dr. Alastair Summerlee, President, University of Guelph
Mark Goldberg, President, GlobalTox International Consultants Inc.
Mike Bouk, Executive Director, Ag-Energy Co-operative
Lloyd Longfield, President, Guelph Chamber of Commerce
Kevin Hall, Vice President (Research), University of Guelph
Dave Smardon, President/Director, BioEnterprise Corporation
Don Drone, Director of Education & CEO, Wellington Catholic District School Board
Kathy Bardswick, President & CEO, The Co-operators Group Limited
Michael Annable, Industry Representative.”

 

Let’s update the ten-year program titled “Prosperity 2020.”

What did the task force accomplish in those ten years? Also where are most of them now? Are we better off today?

Well, it’s what they didn’t accomplish is the real question. It’s fair game for citizens to question why this is still posted on the city website’s new feature presentation ‘Working Together.’

So let’s review how ‘Prosperity 2020’ has affected the quality of life in our city in the past ten years.

First, economic development means creating jobs, increasing industrial and business assessment and creating a balance of property tax revenue between residential, industrial and commercial expansion.

That has not changed in 12 years under two Farbridge and one Guthrie Administration. At a ratio of 84 per cent residential and only 16 for industrial and commercial assessment, it has not altered since 2001 when Karen Farbridge was first elected Mayor.

By any measure that does not mirror economic development. Instead, the load keeps falling on the shoulders of those property-taxed owners who have experienced huge increase in taxes on their properties.

The average assessment ratio in Ontario is 60 per cent residential and 40 per cent industrial and commercial.

Think about this: If the ratio increased from the present industrial/commercial figure of 16 per cent to 30 per cent, the effect would be less dependence on the residential assessment. But three administrations, in 18 years, failed to accomplish anything to correct the imbalance.

Just look at why the city administration failed to increase the economic development revenue ratio. The city website remains a mortuary of the Farbridge administrations that has cost we citizens millions.

Taking a trip down memory lane

* Remember the $23 million Urbacon cost overruns?

* The $15 million GMHI? District Energy and geo-thermal plants?

* Natural gas generating plants that were never built?

* Waste management debacles including buying trucks for auto pick-up of bins??

* Spending $5 million to buy two buildings on Wyndham Street to turn the space into    enlarging the Baker Street parking lot?

* Overbuilt organic wet waste processing facility costing $34 million?

* The Detroit recyclable fiasco?

* Closing lanes on major roads to allow bicycle lanes?

* Intensification of residential complexes with little open space and parking?

* The lack of parking downtown?

* Failure to clean up the downtown possessed by druggies, drunkenness, panhandlers and the homeless?

* Failing to build affordable housing for the less fortunate working poor?

* The renovated railway bridge on Wyndham Street that had large trucks crashing into it.

And don’t forget the high increases annual taxes paid by the residential owner and user fees charged for city services. The city is so desperate for revenue that it inflicted a one per cent levy on property taxes allegedly to pay down the $500 million infrastructure deficit. Then Council approved an additional one per cent levy on properties for “City Buildings.”

Truth to tell it was a move to start funding the $63 million South-end Recreation Centre. The two counncillors sponsoring the motion were Mark MacKinnon and Karl Wettstein. Both represent Ward Six. Some $3.5 Million has already been spent on plans for the $63 million recreation  centre in Ward Six.

Until citizens realize that their 2014 vote was wasted when the new mayor capitulated to the demands of the seven-member progressive bloc who are dedicated to preserving the Farbridge legacy.

Otherwise, what more proof do you want that if anything there is a ton of Farbridge’s ill-conceived and executed action plans that have left an indelible historical imprint on the history of our city.

This study of the Farbridge unabridged legacy is far from over, more to come.

Perhaps a website content purge is in order.

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Its time to clean up the Guthrie administration’s inherited train wreck

By Gerry Barker

July 9, 2018

In 2006, some 12 years ago, the Mayor elect, Karen Farbridge, campaigned on the slogan “She will put Guelph back on track.”

Well, eight years with Karen Farbridge and four years of Cam Guthrie, has created the train wreck that is the legacy of three election cycles being dominated by the successive council’s being stymied by the leftist majority In the case of the Guthrie administration the leftist majority driving up debt and escalating property taxes and user fees.

After monitoring and writing this for those 12 years it is not rocket science to know what has happened to successive administrations. Three councils all made promises they never kept. But the two Farbridge administrations set the the downward glide of excessive spending and mismanagement.

Remember the new downtown main library? A promise made by then Mayor Farbridger and not kept. Cam Guthrie made that same promise. We still have no new downtown library.

Remember the Urbacon disaster in which the Farbridge administration wasted more than $23 million to complete the new city hall complex that was originally contracted to cost $42 million?

It cost Farbridge and four of her councillors their jobs in 2014.

The doozy of bad deals occurred December 13, 2017 when by a 10-3 cote, council approved the merger of Guelph Hydro with Alectra utilities in which there was no payment by Alectra for the estimated $300 million Guelph Hydro distribution system.

That agreement is now before the Ontario Energy Board and some citizens have been approved to intervene when the hearing is held.

Turning to Mayor Cam Guthrie’s performance, his penchant to hold closed-session meetings of council led to the infamous secret increases to four senior managers in December 2010. The cost came to $98,202 with Chief Administrative Officer, Ann Pappert, receiving more than $37,000 most of it was a $27,000 retroactive performance bonus.

Pappert resigned four months later but stuck around until May 26, 2016 then left. The provincial 2016 Sunshine List revealed she was paid $263,000 for five months work.

Couple that with the seven months performed in 2016 by her successor, Derrick Thomson, and the cost of paying the two CAO’s in 2016 was $397,166 not including taxable benefits. In Mr. Thomson’s case, his taxable benefit was an additional $11,000.

This all happened under the leadership of Mayor Guthrie. Aside from the Finance department and members of council, 99 per cent of citizens would never know how much that December 10, 2015 closed-session would impact the citizens. That is until guelphspeaks.ca revealed it.

Then a couple of weeks ago, Council by an 8-5 vote approved increasing the Mayor’s salary from $122,000 to 152,000. The 12 city councillors were also given an addition $5,000 increase.

These increases were made to maintain the take-home pay of all councillors because the Federal government has cancelled the one-third portion of their income that used to be tax-free.

Now here’s what happened.

The Remuneration Advisory Committee, appointed by council, recommended that 12 councillors should receive the increases but not the Mayor. Four days after that decision was published, council awarded the Mayor the increase in order to retain his take-home pay.

Then the Mayor voted to increase his new salary and that of the councillors.

The question, was this a conflict of interest? Five councillors who voted against the motion seemed to think it was. These council salary approvals are always a difficult decision. I happen to advocate that all elected position salary should be greater in order to attract qualified candidates but reflect the increasing workload as the city grows rapidly..

In the case of the Mayor he should have recused himself.

It reflects the deep-seated disregard of that business that is troubling and must change.

I don’t disagree with the increases to elected officials, just the way it was handled that leads to public mistrust. Something that’s not a good idea in an election year.

I do not agree with the method of choosing salary and benefit increases by senior management. Those salary and benefits of senior managers should be determined by an outside body to avoid further conflicts of interest.

Final example. When Mr. Thomson was appointed CAO in June 2016, he said his contract was for three years at a salary of $230,000 plus a taxable benefit of $11,000.

The 2017 Sunshine list revealed his salary was more than $260,000.

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Are you ready for another four years of Karen Farbridge as your Mayor?

By Gerry Barker

October 9, 2017

There were some events this past week that confirm that our city is controlled by a political minority that has held power for the past ten years.

The most startling announcement came from a division of Innovative Guelph. Two Guelph councillors, Leanne Piper and June Hofland, were promoting an event that would feature former Guelph Mayor Karen Farbridge. Ms. Hofland is named co-chair of the event while Ms. Piper is serving on a panel with Brenda Halloran, former Mayor of Waterloo and Chris Fonseca, councillor in the City of Mississauga.

As the keynote speaker, Ms. Farbridge, a veteran of 11 years as mayor of Guelph, is being promoted to “Raising women’s voices: Overcoming barriers to Women’s participation in politics.”

The Innovation Guelph (IG) organization is hosting the meeting November 14 at the Farquhar Street offices of IG. That is to set up a campaign school known as “Guelph Wellington Women’s Campaign School” It is a collaboration of several (unidentified) Guelph community partners devoted to helping women overcome barriers and support them through the political campaign.

The promotion is titled: “Ask a female politician.”

Sounds like the Lavender Hill gang is on the warpath.

Since Ms. Farbridge’s defeat in October 2014 there has been a drumbeat of recrimination by Farbridge followers over their leader’s resounding defeat by, horrors! A man.

In years past, Innovation Guelph was a project initially financed by the city during the Farbridge term as a favourite project.

It’s mission statement is: “Innovation Guelph is building prosperity for community wellbeing by providing mentorship and business support services that help innovative enterprises start.”

So, do these lofty goals have anything to do with pure political action?

Let’s check out the composition of women members of council elected in 2010. Including the Mayor, six women were elected to city council. Along came the 2014 election and only four women were elected to serve. Three of the four are supporters of the former mayor and two are involved in the current “Ask a female politician” initiative.

What can I say? Asking the former mayor to speak at a gender-focused event to help women overcome the alleged barriers to obtaining political office is like throwing up a barricade where none exist.

Their motives are entirely sexist. What’s next, a forum for men to overcome the barriers of political office that some women claim exists?

Further, why is IG involved in sponsoring this forum that strays from its own mission statement? Is it not an organization dedicated for all people in the Guelph/Wellington area regardless of gender, colour, or sexual preference?

The program says there is no charge to attend and all genders are welcome.

Her hardcore supporters are still feeling the pain of the Farbridge surprise defeat. As for the rest of us, perhaps we may attend this self-serving soiree and ask some pertinent questions about Ms. Farbridge’s involvement in the Guelph Municipal Holdings Inc. (GMHI) fiasco.

According to the announcement questions from those attending will only be asked of the three-person panel and not the keynote speaker. Of the panel only Coun. Leanne Piper represents Guelph.

Here are some questions that should be asked of the former mayor:

* As chair of GMHI, why were most of the GMHI meetings held in closed session?

* What was the role of CAO Ann Pappert as Chief Executive Officer of GMHI for four years?

* Did she report to you as chair of the GMHI board?

* Did GMHI, under your leadership, ever earn enough revenue to cover its operating expenses and if so, from where and how much?

* How could GMHI send a total of $9 million as dividends to the city’s general revenues between 2012 and 2015 when it was operating with a deficit?

* The shareholder’s equity is listed on the KPMG GMHI consolidated audit as $63 million. What form of equity of the shareholders (i.e. the Corporation of City of Guelph) made up that $63 million and is it recoverable?

* Why did GMHI borrow $93 million in two debentures from a subsidiary of Guelph Hydro? What happened to those funds?

* Why did Ann Pappert resign ten days following the May 16, 2016 report by Pankaj Sardana that she co-signed?

* Finally, is Innovation Guelph just another tool in the former mayor’s visionary toolbox to support her pro-environmental, power self-sufficiency and sustainability agenda to Guelph?

Regardless, three years ago voters soundly rejected Ms. Farbridge’s performance in retaining power by shutting down public participation using closed-session meetings. To now participate in a meeting to have women encourage you to run and donate to your campaign is not only premature but in my opinion, politically stupid.

But perhaps the announcement makes it clear what your intentions are concerning the October 2018 civic election with the following exhortation:

“ASK HER TO RUN AND SUPPORT HER CAMPAIGN.”

Come to think about it, perhaps Ms. Farbridge is setting the stage to run as a Liberal in the June 2018 provincial election to replace the retiring Liz Sandals.

Now, wouldn’t that be special.

 

 

 

 

 

 

 

 

 

 

 

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The GMHI Odyssey: Following the money leads to a staggering hit on city finances

By Gerry Barker

July 24, 2017

The epic unraveling of the Guelph Municipal Holdings Inc, (GMHI) affair is like watching a kitten untangle a ball of wool.

There are so many moving parts, bopping through a dense fog of spin, denial, obfuscation and malfeasance.

What people are expecting is how much did this excursion into a fantasy world of power self-sufficiency coupled with providing co-generated hot and cold running water to buildings actually cost?

Guelph Speaks used two official documents to reach its conclusion that GMHI cost the city $157.422 million most of which is not recoverable. The two documents include the audited consolidated balance sheet of GMHI and the Guelph Hydro 2016 financial report. By any definition losses can only be described as “staggering.”

The long-term effect is a severe restriction of capital and operational spending. That amount represents about 40 per cent of the total 2017 city operational and capital spending budgets.

In my opinion, it has jeopardized capital spending on the $63 million South End recreational centre and the Downtown library (again) of an estimated $60 million. Keep in mind that city council has approved capital projects including the $34 million police headquarters and the $20.5 millionWilson Street parking garage.

There is no easy solution to this. The project is a failure financially and leaves the city with few alternatives to recover the losses of GMHI. Increasing debt, property taxes and user fees are not alternatives. Rationalizing cost of operations is now a necessity to reduce overhead costs. It’s the only way out of the situation because the city cannot win the lottery.

It all started in April 2007 when the new city council unanimously approved Mayor Karen Farbridge’s proposed Community Energy Initiative (CEI).

Here are the goals set by the CEI to achieve by 2031:

* Use 50 per cent less energy per capita

*   Produce 60 per cent less greenhouse gas emissions per capita

*   Encourage and facilitate community-based renewable and alternative energy   systems.

The staff report at the time, said the CEI would position Guelph among the top energy performers in the world.

Today, the key management players are no longer employed by the city, leaving behind a multi-million dollar losing legacy that has challenged the most skilled financial practitioners among us. Item: The city has spent more than $2.8 million just to have the KPMG accounting firm perform a financial autopsy on this turkey, aka an audit.

The people associated with the GMHI project, have left the building. They include the former mayor, Karen Farbridge, and Chair of the GMHI Board of Directors; former Chief Administration Officer and Chief Executive Officer of GMHI, Ann Pappert; Former Chief Financial Officer Al Horsman; City Solicitor, Donna Jacques and Jasmine Urisk, who at the time, was Chair of the board of directors of Guelph Hydro. Other peripheral managers have also departed at all levels of the City of Guelph Corporation.

These include members of the city administration, Guelph Hydro, GMHI and Envida Community Energy Inc. and Guelph Hydro Electric Services Inc. (GHESI), the operating division of Guelph Hydro. In addition, GMHI and Guelph Hydro entered into contracts to supply power and co-generation thermal heating and cooling system.

These contracts were never fulfilled and the city has negotiated settlements, it is reported.

The Guelph corporate family of companies

So here is the cast of operational participants, all belonging to the City of Guelph’s corporate family.

GMHI was set up under the express direction of former Mayor Karen Farbridge. She took on the job of Chair of the GMHI board of directors in 2011. She handpicked her board thereby maintaining complete control. At the time of formation the assets to be managed included the Guelph Junction railroad.

Her mission was to implement the CEI announced in 2007. It was the product of a series of meetings with many of the leading citizens in the city described as stakeholders. They included members of the city administration, Union Gas, Guelph Hydro, business and industrial representatives, the University of Guelph, School Boards and the Guelph Chamber of Commerce.

It was an all-star cast that produced the agreement and thrust of turning Guelph into a world-class jewel of conservation, self-sufficiency in power, renewable energy sources, total management of waste and the gradual reduction of the use of fossil fuels to reduce the effect on climate change.

It was dreamy, heady stuff that stirred the environmental souls of those participating. But little happened for four years until the corporate vehicle, GMHI was established in 2010. In 2013, the Farbridge-dominated council approved moving Guelph Hydro unto GMHI.

The wheels of this ignoble experiment started to come off in 2009 when Guelph Hydro’s subsidiary, Ecotricity Corporation reported a loss of $3,945,000. The report said the loss was due to declining methane gas from the Eastview landfill. An impairment charge of $2.984 million was taken that year.

Update: Guelph Hydro has paid to take over the Eastview gas generating plant paying some $550,000 for it. Now which city corporation gets that money?

What is the interpretation of an ”impairment” charge? If the recoverable amount of an investment is less than its carrying value, then the asset is deemed to be impaired. The value must be written down to the recoverable amount.

It’s not difficult to understand that when assets are wriitten down, that’s real money lost forever.

There is more on this to come

Suddenly, the door was shut to public participation. Only a few politicians and civil servants were in on the plan’s execution.

It is now believed that Guelph Hydro was the banker for GMHI. The first step was to have Guelph Hydro form Envida Community Energy Corporation to be the hands-on builder of new projects, including installing solar panels on the roof of the Sleeman Centre and several public building throughout the city. Envida now owes millions in debt to GMHI.

The audited GMHI balance sheet revealed a startling statement that concerned two senior unsecured debentures taken out by GMHI totaling $103.612 million as of December 31, 2016. The largest was for $65 million, due 2030 and no interest of the debenture has been paid for two years, increasing the principal due by $8.612 million. The other debenture is for $30 million and is due in 2045. Both these obligations carry interest rates of 4.012 per cent and 4.112 per cent respectively.

The source of these debenture loans is described in the audit as the CDS&CO. As both are unsecured, the loans were made because of the City of Guelph’s owneship of GMHI and Guelph Hydro. It is difficult to imagine any financial institution committing $95 million without the assurance of repayment by the city. Regardless, the loans are unsecured. One can only conclude that a corporate relative within the city’s corporate family guarantees the liquidity of GMHI. The audit also revealed that a $20 million credit facility was arranged for GMHI but the source is not revealed. As of December 31, 2016, there has been no draw down on that facility by GMHI.

It is now clear that there was a lot of money flowing between various city-owned corporations. It was a five-year irresponsible mismanagement of public funds that has left the citizens with a $157.422 million price tag with no benefits to show for it. And, also there remains no possibility of repayment of rapidly depreciating assets.

Adding up the numbers

The balance sheet of GMHI shows assets of $230.596 million of which $162.653 million is composed of property, plant and equipment. Conversely, in my opinion, many of these assets are depreciating and failing to provide adequate cash flow to allow GMHI to pay its bills and continue to exist. The real cash liabilities of $163.474 million closely match the value of the total assets. The inclusion of shareholder equity of $67.122 million, according to the audit as a liability, is enough to match the total assets of $230.596 million to balance the books.

In my opinion, the shareholder’s equity, and that’s you and me, is virtually worthless because there is not enough cash from operations and assets to allow redemption of the shares. The record now shows that GMHI is so intertwined between various city-owned corporate entities that disclosure of the facts is an expensive and difficult task.

It would appear the debenture funding came through Guelph Electric Services Inc., the operating arm of Guelph Hydro. Envida was involved in other projects including the District Energy nodes set up in the Sleeman Centre and Hanlon Business Park.

Through all this GMHI activity, the public had no clue as to what was happening with their money. Item: Hydro bills for the 55,000 clients of Guelph Hydro increased electricity fees by 42 per cent in four years. In the past year the billing has decreased.

Today, Guelph Hydro reports a total of $228.3 million in assets. Its long-term debt is listed as $94.3 million and net income for 2016 was $7.1 million. It would take 13.28 years of $7.1 million in net income to repay it. Amazing coincidence! That’s 2030 the year the $65 million unsecured debenture is due for redemption.

Would you or I want to merge with a utility that carried an impaired debt of $94.3 million? How does the city merge or sell Guelph Hydro with that problem?

Now this is when it gets interesting. In May 16, 2016, Pankaj Sardana, CEO and CFO of GMHI, said there was an impaired charge to GMHI of $68 million. He explained that this was provided by a group of investors, without naming them.

Accounting for those pesky two unsecured debentures

But on the audited GMHI consolidated balance sheet there is a liability of $95 million composed of two unsecured debentures, one being $65 million and the other $30 million. The auditor reported the source of the debentures was CDS&CO. Remember this is now an impaired asset.

It is apparent from the audit by KPMG and the Guelph annual 2016 financials that Guelph Hydro has assumed the hit on the debentures and lists $94.3 million as debt.

Is it coincidence that the GMHI debenture debt has morphed over to Guelph Hydro who lists it as debt? Why would Guelph Hydro, well established with earnings of $7.1 million report debt of $94.3 million? If these figures are accurate, according to official public audits and financial documents, then the total GMHI loss includes the worthless shareholder equity, $63.122 million and the Guelph Hydro debt of $94.3 million totals $157.422 million.

On a historical note, some members of the Gang of Seven city councillors walked out of a closed session in January 2016, preventing council to continue its business because of a lack of quorum. Interviewed later, Coun. Phil Allt said their action was to “protect the staff and the corporation.”

Wonder how that worked out for them now that the details of the GMHI debacle is being revealed?

 

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