Tag Archives: Karen Farbridge

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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Audit of GMHI and Guelph Hydro reveals $161.483 million losses by the municipal holding corporation

By Gerry Barker

June 22, 2017

What follows are highlights of a devastating audit by KPMG of Guelph Municipal Holdings Inc. (GMHI) and Guelph Hydro. The audit revealed a total of $161.483 million that was wasted by the Farbridge administration’s secret and abortive attempt to force the city to make Guelph self-sufficient in terms of electricity and other spin-offs.

One of the most startling statements concerned two senior unsecured debentures taken out by GMHI totaling $103.612 million as of December 31, 2016. The largest, due 2030, was for $65 million 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 $30.000 million and is due 2045. Both these obligations carry interest rates of 4.012 per cent and 4.112 per cent respectively.

The source of these debenture loans are described in the audit as the CDS & CO. As both are unsecured, the loans were made because of the City of Guelph’s ownership 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 revealed that a $20 million credit facility has been 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.

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 continue to exist. The real 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, 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. This enterprise is so intertwined between various city-owned corporate entities that disclosure is inevitable.

This party needs wrapping up ASAP to avoid future cost blowouts.

This misguided project has been held up by the ability of Guelph Hydro to be the bank for GMHI. A search of the mysterious issuer of $95 million in debentures has been unsuccessful so far.

This audit reveals just how serious this experiment was mismanaged; how Guelph Hydro, wholly owned by the city, was sucked into the blind ambition of a mayor determined to turn the city into a world-class leader in power self-sufficiency.

It turned out to be a dismal, waste of the public’s resources and abuse of the public trust.

The audit performed by a respected auditing and financial management firm, KPMG, cost $2.8 million in 2016 and $2.5 million in 2015. These two audits totaling $5.3 million, were the cost of measuring the financial details of the failed projects initiated by the Community Energy Initiative (CEI) promoted by the former mayor as far back as 2007.

Here’s a note from the auditor’s report concerning fraud risk: “The audit team rebutted this presumption due to: “The majority of revenues are driven directly from the purchases of hydro with little judgment over revenue recognition required by management.”

Yes I know, I had trouble following that comment.

From 2011 to 2014, former Chief Administrative Officer of the city, Ann Pappert, served as Chief Executive Officer of GMHI. One would conclude in that position, both the former mayor who was chair of GMHI and Ms. Pappert would be in a position to know about the degree of “judgment over revenue recognition required by management.”

Keep in mind that this entire operation was cloaked in secrecy. It only started coming out of the closet when the GMHI CEO and CFO, Pankaj Sardana, reported the costs of poor planning and management of GMHI and its partner Guelph Hydro (GH).

May 16, 2016, Mr. Sardana and CAO Pappert both signed the document that revealed the estimated loss of GMHI to be $26.6 million. Ten days later Ms. Pappert resigned.

The utility’s operating arm, Guelph Hydro Electric Systems Inc., included the wholly owned Envida Community Energy Systems that was virtually broke. It owed $11 million to GMHI with no ability to even pay the interest of the debt. It had been involved in establishing the rooftop solar arrays on a number of public buildings; the setting up of the District Energy Nodes linked to the cogeneration system to supply hot and cold water to selected buildings.

But it was interrupted by the defeat of the former mayor in the October 2014 civic election by Coun. Cam Guthrie. It started an investigation about the role of GMHI and the link with Guelph Hydro. Now, a year and a half later, the truth is known about the cost of $161.403 million.

The unraveling of the GMHI and Guelph Hydro axis started shortly after the defeat of the former mayor.

The audit examining GMHI/Guelph Hydro operations for 2015 and 2016, commented:

“The district energy segment has continued to experience negative cash flows which are projected to be insufficient to recover the carrying value of the related assets.

In four years, the GMHI management failed to recognize their primary District Energy scheme was failing to meet profitability. Yet they kept spending public money of future large-scale projects including building two large natural gas-powered electricity generators in the city to achieve power self-sufficiency.

“Management has assessed Envida’s district energy property, plant and equipment for impairment and evaluated the cash flows associated with the Hanlon Creek Business Park, Galt District Energy (Sleeman Centre), and West End Community Centre. Based on value-in-use net present value calculations, management has determined that the carrying value of all the nodes are fully impaired.”

We now learn according to the audit, that there were not just two District Energy Nodes (pumps) in the Sleeman Centre and Hanlon Creek Business Park but a third in the West End Community Centre. The impaired value of the three is $12 million.

“Further, based on the obligations for contracts in place and the related estimated unavoidable costs of meeting the obligations exceeding the economic benefits to be received by approximately $50K annually over the life of the contracts, a provision has been recorded for $540,000 (18 years).”

This is another example of financial mismanagement by GMHI based on false assumptions.

“Management’s cash flow projections were based on the business plan for the segment for the upcoming years. Their analysis took into account factors including the remaining contract periods for agreements in place with current customers (approximately 18 years), history of revenue and expenses to date, and the useful lives of the equipment. Further, based on current plans and direction from the Board, the analysis includes only minimal additional investments required to service current customers.”

Why then did the experience and track record of the GMHI Board and that of Guelph Hydro, make so many devastating mistakes that have resulted in the loss of millions of public funds?

The audit statements include an estimate of future employee benefits totaling $10.297 million. Again, the citizens of Guelph will be paying for this for years.

Why Did GMHI send $1.5 million to the city each year, (total $9 million) when it consistently lost money?

How can GMHI or the city afford to repay that $103.612 million in debentures owed to CDS & CO, the lenders?

Who are the owners of the CDS & CO?

With the shareholders equity of $67.122 million be written off in the years ahead, impairing the city’s ability to carry out the ten-year capital-spending plan?

CAO Derrick Thomson has already stated the capital plan is $170 million short to provide for major capital projects, including the South End recreation centre, new downtown Library and infrastructure demands.

Is the real goal of the Strategic Options Committee (SOC) charged with seeking candidates to sell Guelph Hydro or merge it with another utility, or to raise capital to recover the losses incurred by GMHI?

When will those councillors who served on the GMHI board of directors plus another independent member now serving of the SOC, be held accountable for what happened?

The audit documents can be found on the city website under the heading Agenda June 28.

It is the most shocking report that I have ever witnessed in my years of journalism. The secrecy resulting in an abuse of power should be a wake-up call for all citizens. The council should be held accountable to maintain the public treasury and never allow this to occur again.

This makes the $23 million cost overrun construction of the new city hall look like penny ante compared to the $161.403 million spent on this rape of the public purse.

The audit is first step. Now we know what happened, What is need is an independent investigation into how it happened and the impact on the citizens. More important, question those responsible and make them accountable.

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What happened to those dedicated reserve funds totaling $77,782,000 in 2011?

By Gerry Barker

May 11, 2017

It’s the stuff that happened six years ago that we soon forget. What stuff? Let’s start with the annual 2011 financial sitrep (situation report).

A check of the GS archives produced a column reporting the December 31 city financial data. It included a status of the city’s reserve, all 97 dedicated cash resources that totaled $77,782,000. Stating in the now defunct Mercury, Coun. Leanne Piper chided those naysayers who opposed the budget. She went on to say, nothing to worry about here because the city had $83 million in reserves. Yep! Nothing to worry about here.

This cavalier attitude was reported in the Mercury by former city hall beat reporter Scott Tracey. He said there was nothing new about using reserve funds to reduce the impact of property taxes on the budget. Okay, which of the 97 reserve funds was to be tapped to reduce property taxes?

Well, it turned out the tax stabilization reserve fund only had $1,383,000 in December 2011. That is a drop in the bucket to stabilize a budget in which the city had a major $2,571,000 negative budget variance in 2011. Five budgets later, in 2015, the negative budget shortfall was $1,143,123. In that five year period there was only 2014, election year, where the city declared a surplus of $1,O85,153. You will recall that year was the first in which the property tax rate was, for the first time, below 3 per cent.

Regardless, that was the years Mayor Karen Farbridge was defeated by Coun. Cam Guthrie.

In 2011, the accounting firm, auditing the city’s finances, stated that it was “a poor way to run the corporation.” It went on to say that using dedicated reserve funds to balance a budget is like borrowing an your credit card at 22 per cent. The effect is the same.

Sadly, nothing has changed except that there are only 26 reserve funds today with an estimated value of $11,000,000. In just a little over six years, the destruction and mismanagement of the city’s finances has cost millions of the public money. Those who are accountable are gone and there is no recourse available to the public.

As Chief Financial Officer, Derrick Thomson, put it, any attempt to commence a legal action against city employees or elected officials, akkdefendants’ legal expenses will be paid by the city. This indemnification bylaw also extends to former employees or elected officials.

This bylaw is nothing short of suppression of the rights of the public to take appropriate legal action against some 2,100 city officials from top to bottom.

The 2018 campaign has already started

Turning to an important aspect of how the Bloc of Seven is working hard to ensure their re-election next year.

The local weekly covered a meeting of the Guelph Neighbourhood Support Coalition (GNSC). The Guelph Civic League (GCL) organization founded 10 Carden Street, a community activist group. GCL supported former Mayor Karen Farbridge and a number of like-minded councillors in 2006. One of GCL founders is Coun. James Gordon.

GNSC is based in offices at 10 Carden Street across from city hall. Meanwhile, 10 Carden Street applied for a Trillium Foundation grant to operate a civic support group to promote greater participation in public affairs and elections. A few years ago the group received a $135,000 grant to promote greater public participation.

That was then. A couple of weeks ago, the majority of council voted not to allow online voting in the 2018 civic election. It does seem strange and awkward for the GNSC, a second cousin to 10 Carden Street, to be linked to the online voting ban. It further exposes the real purposes of 10 Carden Street and the GNSC. It is cloaked in the murky business of political action.

One would agree that the newspaper article pointed out some details of the work the Coalition does, providing food to children and the less fortunate. It appears it has grown sufficiently to build an activist organization consisting of 13 neighbourhood membership groups available to participate in the 2018 election.

There is little we know of the officers of GNS. What is its status as an organization, budget, staff, finances or mission statement. Besides the city and United Way are funding GNSC Carden along with unnamed grants. That does not exempt it from its links to the left’s political action group, the Guelph Civic League, which seems to resurrect itself prior to every election since 2006.

Bottom Line? There is no way this city can survive another four years maintaining the policies of the previous administrations. They willfully spent millions on self- serving, narrow gauged projects that often failed.

The time has come to stop the hardcore, ideological activists who have controlled our city for too long. This election has already started.

There will be more on this later.

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Just when you believed the influence of Karen Farbridge was over, read this

By Gerry Barker

April 24, 2017

How the worm turns.

Tonight is our last chance to support online voting next year

Before the 2014 civic election, council voted to allow online voting. This was a forward-looking approach to allow more voters to cast their ballot just like they did in Toronto and Ottawa. In fact, some 13,000 did use the system. There was no voter fraud, very few hitches; it exceeded all expectation by being available, fair and without problems.

Oh, there were naysayers. Today the majority of naysayers are all sitting on council with the majority voting to ban it. For some it is a classic flip-flop.

In a recent city council Committee of the Whole meeting, a non-binding vote was held to approve allowing online voting in the 2018 civic election. To the surprise of most people the following councillors voted to disallow online voting for the 2018 civic election.

Councillors opposed included Phil Allt, James Gordon, and Mike Salisbury, who were not members of the 2014 council that voted for online voting. So what’s their beef?

Then the following councillors who did vote for online voting in 2014, June Hofland, Leanne Piper, Karl Wettstein are now voting against online voting. Why? Other than adhering to a misguided ideological rationale, why the flip-flop? It seems silly in that all three benefited from online voting in their 2014 re-election.

How Coun. Bob Bell voted no to online voting this time is both baffling and not known how he voted when the former council approved online voting. He also benefited from it, winning re-election in 2014.

Coun. Cathy Downer was the only member of the progressive majority who voted to allow online voting next year. Coun. Mark MacKinnon also voted to allow the online voting system.

The future of online voting is now

Tonight, April 24, council will vote to allow online voting, or not. This is necessary because the original vote was conducted when the council was in the committee of the whole. I know, procedural bylaws can be confusing but tonight is the night for the final decision.

It will take two defections from the “no” side to let it proceed. Of course the risk the “no” faction faces is diminished chances of re-election next year.

So what influenced new councillors Gordon, Allt and Salisbury to vote against it?

Was it the influence of that ardent socialist Susan Watson who urged council to reject online voting? You remember Ms. Watson who, between she and her husband, donated thousands to elect former Mayor Farbridge and loyal supporters.

She will also be remembered as the social activist who persuaded the city to order an independent audit of former candidate Glen Tolhurst’s election financial report. It showed a donation of $400 from GrassRoots Guelph, an incorporated citizen’s activist group.

The auditor, William Molson of Toronto, said the donation was legal, however the $11,000 cost of this “frivolous and vexatious” exercise was not paid by Watson but by the citizens.

But you have to hand it to Watson. I so hope she decides to run for council. She is chairperson of the Fair Vote movement in Guelph. This is a New Democratic Party national organization to encourage voting reforms. They include proportional voting to replace the system of the first candidate past the post, winning the election. It’s system that has been in place since 1867.

The Trudeau Liberal government ran on reforming the Canadian voting system, recently walked away from it, much to the rage of the New Democrats.

So, now Ms. Watson is trying to convince council to suppress voting by not allowing online voting.

Words escape me to describe this two-faced attempt to force restrictive policies on the electorate by forcing reform of the voting system and at the same time, disallowing online voting.

The Farbridge legacy lives on

What it really illustrates is the collusion and conviction of the majority group of city council to carry on the leftists’ policies of the defunct Farbridge administration. It was one of failure not only at the polls, but resulted in millions being spent on the Mayor’s personal agenda to impose unwanted social and environmental projects.

In her eight years in office, the former mayor inveigled her supporters to tap into reserves to balance the city accounts due to excessive overspending of budgets. The assets of Guelph Hydro and wasting public funds on giveaways to developers to encourage high-density development were part of the Farbridge agenda to turn the city into a vibrant place for all citizens. How did that work for you?

It was the Farbridge plan to turn the city into an exciting urban downtown without the input6 from asking the residents. Earlier this year the Chief Administrative Officer, Derrick Thomson, announced the city was pursuing the Reformatory lands, owned by the province, to build a modern high-density complete community. The plans were to develop a community without cars, walking distance to shopping and jobs. Trouble is the city has spent millions planning an urban design for those lands but doesn’t have the money to buy the property.

You know, I keep thinking of Kevin Coster in the movie “A Field of Dreams” who believed converting a cornfield into a baseball stadium: “If you build it, they will come.” Trouble is, we don’t have a Shoeless Joe Jackson to seal the deal.

The real issue is where did the money go when the former mayor ran Guelph Municipal Holdings Inc. GMHI for four years?

How does this affect online voting or visa-versa?

In 2010, shortly following the civic election, the Mayor informed council she was setting up GMHI to manage city assets. This was to be an independent, incorporated body operating separately from the city, although owned by the city. Here’s the organizational set up for GMHI as reported in a news release:

“GMHI is a holding company set up by Guelph City Council to manage select City of Guelph assets, which currently includes Guelph Hydro Incorporated and its subsidiaries, for the purpose of maximizing revenue potential and strengthening community prosperity. GMHI is governed by an eight-member Board of Directors including the Mayor as Chairperson, four City Councillors, the Guelph Hydro Incorporated Chair and two independent community members.”

The Board appointed Chief Administrative Officer Ann Pappert, as Chief Executive Officer of GMHI. Operations started in 2011. From the start, GMHI was the corporate vehicle to continue the mayor’s Community Energy Initiatives. In July 2013, GMHI filed an annual report as follows:

“Guelph, ON, July 10, 2013 – Guelph Municipal Holdings Inc. (GMHI) held its second Annual General Meeting today to update shareholders on its 2012 accomplishments and 2013 future directions.

“A top priority for 2013 is addressing a recent Ontario Distribution Sector Review Panel recommendation that a number of local energy distributors, including Guelph Hydro, be consolidated into larger regional distributors. Given the possibility that this situation could be provincially mandated or driven by the regulator, the Ontario Energy Board, GMHI has endorsed a Guelph Hydro staff investigation of solutions that may include sharing services and resources, or more formal mergers and acquisitions. “Consolidation is a distinct possibility regardless of how it is achieved. We will continue to be well prepared to respond to all opportunities for lower energy costs for customers, improved efficiencies, better access to technology and sustainable solutions.” (Signed) Karen Farbridge, Chair of GMHI.

“An additional priority for GMHI this year is to pursue a new energy project designed to create a thermal (heating and cooling) distribution network – often referred to as District Energy – that will allow for flexible, efficient, competitive and secure local supply and delivery of thermal energy to Guelph in the future. About half of Guelph’s total energy demand is for thermal energy. The District Energy project represents a significant opportunity to ensure a reliable local supply a midst economic uncertainty and increasing climate change concerns.”

Part of those unfulfilled grandiose plans by GMHIL was to build two large natural gas generating plants, one in the Hanlon Business Park and the other on city owned land. These units were to make Guelph self-sufficient producing its own electricity.

The fallout of these schemes was loses of $26.6 million and being stuck with an impaired investment of some $69 million, borrowed from Guelph Hydro, as of 2015 in which GMHI has no revenues to even pay the interest. It’s held on the city books as an asset but that will be written down over time. The  reason is that GMHI has no income to even pay the interest on the loan.

Are you beginning to see the corporate anxiety to sell Guelph Hydro?

As a shareholder in the City of Guelph Corporation, I now understand why the GMHI annual report failed to contain the following important details that were in the public interest and ignored.

There is no operational financial information provided in the former mayor’s 2014 annual statement of GMHI including an audited balance sheet, a listing of expenses and revenue; The status of the annual $1.5 million dividend paid to the city by GMHI; a statement of the “accomplishments” reported by Chair Farbridge; no overall statement of operations and future plans of GMHI; No indication of taxes collected and paid; no identification of the auditor as appointed by the Board or evidence of an audit. These details are required under the provincial Corporations Act and are public documents.

The most interesting part of the Chair’s 2013 report was the long dissertation about how Guelph Hydro may be merged or sold if the province mandates it. Four years later, the correct council, through its Strategic Options Committee, is shopping Guelph Hydro. I know, they don’t like that description but that’s what the majority on council authorized it to do.

In almost seven years, the fallout from the GMHI operation has cost the city some $96 million. May 16, 2016, Pankaj Sardana, Chief Executive Officer and Chief Financial Officer of GMHI revealed much of the disastrous cost of this misadventure conducted at the taxpayer’s expense. He told council much of the details of an ill-planned project that was shrouded in secrecy and described as a project that should never have been started in the first place.

In July 2016, a staff report revealed additional information that was equally devastating. Ten days after the Sardana GMHI report, co-signer CAO Ann Pappert, left the city. The only remaining city councillors who were paid to serve on the GMHI board for four years, are Coun. June Hofland and Coun. Karl Wettstein. They both remain on council and are silent on their involvement.

It’s ironic that Ms. Hofland was chair of the council finance committee for those four years and failed to express concern about the downward financial spiral of GMHI and its management.

So why do these events worry the anti-online council majority? Regardless of the outcome of the vote, the GMHI debacle will be a major issue in the 2018 election. The memory lingers on the effect of online voting in the 2014 civic election in which mayor Farbridge and seven councillors were defeated or retired. The exception was Mayor Guthrie who moved from council representing W4 to the Mayor’s chair. Mike Salisbury took his seat.

The five-vote victory of June Holand in W3 gave the progressives the majority on council. So that’s why the left do not want online voting because of the fear it may lead to their defeat.

And that folks, would be a good thing

Let your councillors know before tonight’s meeting that you favour online voting.

 

 

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Clarity alert! Ontario’s Energy Minister says electricity fixes cost $35 billion but the Premier says $50 billion

By Gerry Barker

April 3, 2017

Breaking News

The Strategic Options Committee has lost two members, Pankaj Sardana, CEO of Guelph Hydro and Richard Puccini a retired engineer. Mr. Sardana is replaced by Guelph Hydro Chair, Jane Armstrong, who said she felt that Guelph Hydro Electric Services needed a str0nger presence on the committee. She admitted she  and the Hydro board favoured the recommendation of the SOC selling Guelph Hydro if the opportunity arises. The city has yet to announce a replacement for Mr. Puccini.

This is a combination feel good and feel bad story.

It’s based on a first-rate analysis of Ontario’s high cost electricity generation and distribution system reported by retired bank executive, Parker Gallant, published recently in the Financial Post. Gallant looked at his power bill and didn’t like what he saw. We thank FP for providing this important analysis that affects every person in the province.

The good part of this story illustrates the incompetence of the Wynne government in managing the province’s electric power systems coming out of the darkness. The details are a stunning indictment of a ship of fools that we elected to run our provincial government. Their decisions over12 years, affects the entire population, industry and future of our province. It reveals why Ontario has the highest electricity costs in Canada.

How incompetent are they? Well, according to Mr. Gallant, the Minister of Energy, Glenn Thibault, says the province spent $35 billion fixing the broken electricity system since attaining power in 2003. His boss, Premier Wynne, says it cost $50 billion.

If they can’t get their act together, what can the citizens who pay for it, conclude?

Mr. Gallant states: “Thibeault’s $35 billion would represent spending $8,000 per residential ratepayer; Wynne’s $50 billion, $11,000 per ratepayer. Bear that in mind as you travel through my computations. Some of these are estimates from reasonable and reliable sources. The spending, initiated via more than 100 directives issued by a succession of Liberal energy ministers over the past 12 years, often had no connection to fixing anything, or generating electricity.”

Before breaking down where the money went, in Guelph we have a Strategic Options Committee (SOC) composeed of non-elected citizens, working to sell off or merge our Guelph Hydro with another power distributor with the highest bid. Presumably, either option will result in losing any semblance of municipal control of vital electricity distribution. More on this later.

Here is Mr. Gallant’s breakdown of where the billions went.

Total spending on frills, fluff and baubles: $7.4 billion

“First, there are the “frills and shiny baubles” spending category, essentially money spent that neither created new generation nor improved transmission nor reduced blackouts or brownouts.

  • Spending on “smart meters,” which Ontario’s Auditor General in her December, 2014 report, concluded funds were basically wasted since “many of the anticipated benefits of Smart Metering have not been achieved and its implementation has been much more costly than projected:” Cost, $2 billion.
  • The smart grid was supposed to work in conjunction with smart meters. Consumers are billed for the costs of developing the smart grid but the benefits accrue to a few select individuals and companies: Cost, $1.2 billion
  • Closing the coalfired generating plants required Ontario Power Generation to write off the remaining value of the plants when the last one closed in 2014:
  • Cost, $600 million.
  • Costs of conservation programs, in which some consumers are paid to not consume, while the costs between $300 million and $400 million annually are passed on to all Ontario ratepayers: Cost, $2.5 billion.
  • Gas plant moves, from Mississauga and Oakville to Lambton and Bath, Ontario: Cost, $1.1 billio

Total spending on “unreliable and intermittenr” power providers: $21.4 million

Second, considering our “intermittent and unreliable” category, in which the province added wind and solar capacity that is unable to deliver generation when the wind isn’t blowing and the sun’s not shining.

  • Ontario’s independent system operator shows the province will have installed wind and solar capacity of more than 7,000 MegaWatts (MW) as of March 31, 2017, including 4,650 MW of wind at a capital cost of $2.2 million per MW. Cost, $10.2 billion.
  • Solar generation as of March 31, 2017 will total approximately 2,400 MW at a capital cost of $2.6 million per MW: Cost, $6.2 billion
  • Transmission spending by Hydro One to connect wind and solar to the grid and for embedded connection expenditures. Cost, $5 billion.

Those photo-op costs are $2.6 million

Our third category is “photo-op generation,” money spent on large hydro infrastructure projects producing little power but presenting politicians with great photo-ops.

  • Big Becky hydro power expansion. The original Adam Beck Niagara hydro generation plant,, which went $600 million over budget to squeeze an additional 150 MWs of capacity from Niagara Falls. Cost, $1.5 billion.
  • Mattagami Hydro Power project, originally estimated at $1.6 billion to increase the rated capacity by 438 MW, went over budget by $1 billion. Before these two hydro projects were completed, Ontario Power Generations produced 30.6 TWh (terawatt hours) of hydro generation. Despite the addition of 588 MW of capacity, hydro generation in 2016 fell to 29.5 TWh. Generation data from March 21 indicates Mattagami generated power at about eight per cent of rated capacity, while all other hydro was operating at an average of about 50 per cent of rated capacity: Cost, $2.6 billion.

Nuclear power’s value for money

The fourth category is “value for money.” Some of the claimed investments in generation actually provided some value.

  • The Bruce Nuclear refurbishment of two reactors came at a cost of $4.8 billion but, according to Ben Chin, former VP of the Ontario Power Authority, the cost to ratepayers was limited since shareholders were forced to accept a portion of the over-budget costs. Cost, $3.4 billion.

Grand total to the end of 2016: $36.3 billion

This estimate comes reasonably close to the $35 billion claimed by Energy Minister. Glenn Thibault. But more spending is in the pipeline over the next 18 months, including another 500 MW of wind capacity with an estimated capital cost of $1.1 billion, 100 MW of solar for $300 million and 1,300 MW of gas at a rough cost of $900 million.

Total for what’s still to come: $2.3 billion

Even if one includes the money still to be spent, the total investments (most of them wasted) are over $11 billion shy of the $50 billion that Wynne claims has been spent.

We need to see Thibeault’s accounting, and Wynne’s too, to allow Ontario’s taxpayers and ratepayers to determine whether the spending has provided the claimed value for tax dollars.

So what does this mean for Guelph power consumers?

Predictably, Ontario’s power strategies have been a dismal failure that will cost citizens well into the future.

An immediate problem is the operation of the Strategic Options Committee that had pledged to report later this year on their investigations and bargaining with potential purchasers of Guelph Hydro as to whether to sell it or merge with another distribution operator.

This is the second time in nine years that the administration of the city has attempted to recover its equity in the city-owned utility that is profitable. In 2008, former Mayor Karen Farbridge, a member of the Guelph Hydro board of directors, attempted to convince her council to sell the utility to a consortium of Hamilton and St. Catharines power distributors.

The reasons then are the same as the reasons today.

The former mayor desperately needed the money to participate in a $66 million infrastructure plan funded on a one-third contribution by the city, provincial and federal governments. Guelph’s share was $22 million. The attempt failed when the people protested and the majority of council, many of them Farbridge supporters, voted no to the sale.

The mayor still got her money by calling a note of $30 million owed to the city by Guelph Hydro. The result was the city added a few frills such as a new time clock in the Sleeman Centre and bicycle lanes on Stone Road among others.

One of the arguments put forth at the time was that the province wanted the “smaller” electricity distribution systems to sell or merge with larger units. It was not mandated by the province but recommended for lowering costs and increasing efficiency.

Today, that same reason has been given to city council. SOC Co-Chair Pankaj Sardana, Chief Executive Officer of Guelph Hydro, has cautioned members of council that not all mergers are successful partly due to the clash of cultures between the two organizations coupled with a loss of jobs.

The reason for selling is obvious. The city has drained most of its reserves to pay for the mistakes, failed ventures and refusal to reduce its overhead. High debt levels and betting on increased revenues through reassessment of properties, user fees and subsidies from province and Ottawa, is pie in the sky.

All those financial mismanagement episodes for the past 14 years have hobbled the city’s ability to carry out its short and long-term strategies. The quick solution: Sell Guelph Hydro and recover an estimate $125 milllion.

The city is on the brink of failing to have the financial resources to continue its short and long-term strategies. Selling Guelph Hydro is not the solution.

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Royal City Blues: A documentary

By Gerry Barker

March 20, 2017

If there ever was the opportunity to develop a documentary to describe the woeful record, it is now outlining how three administrations have lost more than $136 million in ten years. Perhaps it’s time to reconcile the city’s finances by hiring a Chief Financial Officer with experience and savvy.

Here is a draft outline that details the events that have drained the financial resources of the city, to the extent that the current Guthrie administration is engaged in selling Guelph Hydro to rebuild the financial losses of previous administrations.

The Guthrie administration is hamstrung to even pay for needed infrastructure repairs and replacements, let alone reducing costs. A new city report clearly states that it is going to cost double what the administration estimated when approving the 2017 budget.

And council couldn’t even get that straight when it voted to double the so-called special property tax levy from one per cent to two percent. The staff recommended a one per cent levy to help pay for the infrastructure costs but council added another one per cent to pay for “city buildings.” The reality? It is an attempt to start construction of the $60 million South End recreation centre.

Trouble is there is no capital funding for this project. So council approved shelving some $700,000 to replace the parking meters downtown, a project in the 2016 budget, to produce parking revenue. Then council turned around and spent some $650,000 toward pre-construction costs of the South End recreation centre.

Most people would believe this is a commitment to proceed with the project. Most people will figure out what is occurring is a back-door attempt to force the next council to come up with the capital funding for the project.

Both Ward Six councillors, Karl Wettstein and Mark MacKinnon, pushed this attempt to force future councils to pay for it.

Is this any way to run a city? Any way to mortgage future generations of residents to pay for something they did not vote for? Is it right to ignore the costs of infrastructure to assuage the desires of a minority of citizens?

Already, there are decisions being made to ensure the re-election of the present majority of council including the mayor. A key problem is the greatly diminished level of reserves that have been used to shore up projects and balance sheets for far too long.

That’s where we stand today. But let’s look back at how and when we got into this mess.

Back to the future, Guelph style

In February, City Solicitor, Donna Jaques, resigned and left for a job in North Bay with the Ontario Northland Railway. Deputy Chief Administrative Officer, Mark Amorosi, who was dismissed, followed right after her departure. They are yet further additions to the exodus of senior executives leaving the city since Mayor Cam Guthrie was elected. Scott Worsfold, another city lawyer resigned last fall.

More than 20 senior managers have left the city since 2014. These are the people who administer the operations of our corporation. In any business, the adage is it’s more difficult to replace a key employee than to fire the incumbent.

An example is the recent announcement that the General Manager of the Community Energy Initiative (CEI), Rob Kerr, has been dismissed. At the same time the city is setting up a Climate Change Office. Is this really needed? Premier Wynne is already taxing us through our Hydro bills for our use of household fossil fuels. These include use of natural gas in a variety of appliances including barbeques, stoves, dryers, fireplaces, furnaces, and water heaters.

And now we need a Climate Change Office?

What follows is a documentary of how our city investments have been squandered by three administrations. Since 2007, these administrations have created social engineering projects that most people did not request or want.

It documents abuse of the public trust, its right to know and participate. We have been subjected to absolute control, secrecy, distortion of facts and unparalleled arrogance. So, we can only blame ourselves as we elected them. Here is a record of how our money was misused and managed without recourse on our part.

Scene One: The genesis of a financial disaster

It’s early in January 2007 when the newly elected Mayor of Guelph, Karen Farbridge, persuades leaders of organizations across the city to join, creating the Community Energy Initiative. More than 20 prominent individuals accepted her invitation to join and participate. They represented the Guelph Chamber of Commerce, The University of Guelph, Guelph Hydro, Industrial and commercial leaders and energy experts.

Little di we know then of the impact on city finances of this project.

Scene Two: Spending $16 million renovating a derelict building on someone else’s property

Mayor Farbridge becomes immersed in running her city and introducing a number of initiatives. These included approval of spending $12.7 million to move the Civic Museum into a leased former derelict convent next to The Church of Our Lady. This project took five years to complete and cost more than $16 million. Of that amount, the federal and provincial governments provided roughly $6 million. As an aside, more than $1 million was spent landscaping the hill in front of the Museum, on land the city does not own.

Scene Three: The $33 million great landfill diversion scheme

With little public input, council approved a new solid-waste management system. It included spending $33 million on an organic waste-processing facility that had a processing capacity that was three times the needs of Guelph for 20 years. It was operated by Aim Environmental a subsidiary company of the builder of the plant, Maple Reinders. Another Maple Reinders subsidiary called Organix sold the compost produced.

Details of the organic operation were never revealed to the public, including the sale of the composted material. The city management said it could not reveal the details because of “private proprietary interests.” An internal audit of the waste- management operations in 2016 revealed it was losing $270,000 a year. The Executive Director of Environmental Services, Janet Laird, resigned after the 2014 election. Her General Manager, Dean Wyman, left in December 2015 for a job in Edmonton.

The department is now undergoing a rationalization study to develop a greater degree of effiency and reduce reduce costs of an operation that is losing $270K a year. This is under the leadership of Deputy Chief Administrative Officer, (DCAO) Scott Stewart. Good luck, Scott.

Scene Four: A fateful decision to get tough and lose millions

It’s spring 2008. Mayor Farbridge was getting impatient about the progress of General Contractor, Urbacon Buildings Group Corporation, building the new city hall and renovating the old city hall into a provincial court. The original contract was $42 million for both projects. On September 19, 2008, Acting CAO Hans Loewig ordered Urbacon off the site, supported by Guelph Police.

For his loyalty, former CAO Loewig was given a four-year contract starting at $199,000 plus generous benefits, including several weeks of vacation annually. Ann Pappert replaced him in 2012.

Urbacon responded by suing the city for breach of contract and sought $19,184,181.71 in damages. This began a legal wrangle that lasted for five years and eventually included five lawsuits. Fast forward to March 2014. Justice Donald MacKenzie delivered a stunning verdict in favour of Urbacon and chastised the chief city witness, the site manager, Murray McRae for his testimony. The mayor’s impatience cost a $23 million overrun of the new city hall, from $42 million to $65 million.

Here is a comment from a guelphspeaks posting September 9, 2014:

“This remains an epic error in judgment for which the Farbridge administration must take responsibility. How can they say, with a straight face, that the costs are covered and there will be no impact on taxpayers? They’re manipulating your money to suit their agenda and again avoiding responsibility.”

As it turned out, it was CAO Ann Pappert, who made that claim misleading the citizens.

Scene Five: The year of multi-mistakes leading to the defeat of the mayor

Election year 2014, witnessed several events. They included the Urbacon decision, transit strike and approval of the $34 million police HQ renovations which would take more than five years to complete. These events impacted the future of Mayor Farbridge and four council supporters who either decided not to run or were defeated.

The progressives were stunned over the loss of their leader. Changes came swiftly. The top senior staff was reorganized when Janet Laird retired to Whistler, B.C. and Derek McCaughan resigned. The shuffle occurred before Cam Guthrie took over as the city’s new mayor, December 1, 2014.

Observation: The city administration does not have much success when it comes to constructing major capital projects and staying on budget. Besides Urbacon, there was the Civic museum, both of which exceeded contracted costs by $33 million.

Scene Six: It’s 2015 and we’re off to a rocky start

Early in 2015, there were events that would shape the new council that was dominated by seven supporters of the previous Mayor and her policies. In January, Mayor Guthrie attacked me in an email urging his followers to ignore me. The outburst was attributed to a piece I published in guelphspeaks.ca in which I said the council was reviewing CAO Ann Pappert’s contract.

The Mayor, for whatever reason, supported Ms. Pappert until the day she gave her notice in April 2016 that included her extravagant retirement payoff estimated to be more than $150K. Early last year, concerned citizen, Rena Akerman, sent a detailed email to other citizens outlining the performance of the CAO in the past four years. Mayor Guthrie threatened legal action against Ms. Akerman. Fortunately for him, that didn’t happen.

Scene Seven: the Guelph Municipal Holdings debacle

In 2015, there was an even bigger scandal brewing. Mayor Guthrie and Coun. Karl Wettstein were appointed as council representatives on the Guelph Municipal Holdings Inc (GMHI) board of directors. The former mayor said GMHI was to manage the city-owned assets including Guelph Hydro, its subsidiary Envida Community Energy Corp. and the Guelph Junction Railroad.

Simmering below the surface was this disastrous experiment created by the former mayor. It is a wholly-owned corporation of the city. Mayor Farbridge appointed herself as chairperson of the GMHI board of directors, composed of a majority of her council supporters, plus two members of Guelph Hydro and two independent directors. CAO Ann Pappert was appointed Chief Executive Officer of GMHI and remained in that job for four years.

On May 16, 2016, the truth was revealed in a GMHI situation report signed by Ms. Pappert in her capacity as city CAO, and Pankaj Sardana, her successor at GMHI. In fact, in its five years of existence it has never made a dime but the losses climbed to more than $26.6 million. This loss, according to a May 16, 2016 was reported and presented to council, jointly by CAO Ann Pappert and Pankaj Sardana, CEO and CFO of GMHI.

The report stunned everyone when Mr. Sardana said GMHI had lost $26.6 million and had no financial ability to continue operations. It turned out to be only the tip of the iceberg. GMHI had accepted a loan of $65 million from Guelph Hydro to expand its projects to achieve electric power self-sufficiency for the city. That loan is now an impaired asset on the city’s books and was on the 2015 Financial Information Report valued at $69 million. “Impaired Asset,” means that the receiver of the funds, GMHI, has no money to pay the interest on the loan. Also it has insufficient assets underlying the loan.

Over time, this large loan will have to be written off. Unless, the city can sell Guelph Hydro and profit from the estimated proceeds of more than $150 million. Later this year, the Strategic Options Committee will make its recommendation after shopping Guelph Hydro in the market place.

It is only recently revealed the former mayor and the GMHI board had secured land in the Hanlon Business Park and Downtown to build large natural gas-fired generation plants as part of its Community Energy Initiatives. Again, public input was not invited or considered.

The two natural gas plant sites were obtained when the Guthrie administration shut down operations. Guelph Hydro was brought into the city as part of its finances.

It is now plain what the former mayor was bent on accomplishing. Electric power self-sufficiency and sell Guelph Hydro to the highest bidder to get rid of the losses.

Please think about this: If Ms. Farbridge had been re-elected in 2014, we would still be kept in the dark while millions were poured into a scheme to make our city self-sufficient in electricity supply. If fact, Mr. Sardana said that in order to make the two $8.7 million District Energy Nodes to break even, it would require an additional investment of $60 million.

Did the former mayor ever consider the billion it cost to dismantle two partially built gas-fired plants by Premier Dalton McGuinty to save four Liberal seats?

Well folks, so far it’s only cost you and me $96 million including the $65 million loan from Guelph Hydro. It will eventually disappear into the mists of One Carden Street.

For comparison, the Ontario gas plant tear down cost just over a billion dollars. The population of Ontario (including us) is more than eight million people. So Guelph loses $96 million spread over some 121,500 residents and businesses. Our loss will cost $790 per person, babies, young, old and the infirm. That money has gone.

McGuinty’s gas plant loss cost each of the eight million population of the province $12,500.

But wait a minute! We are included in the Provincial figure so that means every citizen of Guelph is responsible for $13,293. A high price to pay for badly managed, high cost social engineering schemes, all of which failed on both levels of government.

The real problem is that it’s public funds that have been misspent. Regardless of whether it’s posted in the Guelph Hydro books or the city books, it’s a stunning loss and misuse of public money. The city has no choice but to write it off.

But here’s the concern for all citizens: Until there is an independent investigation and forensic audit of the whole GMHI debacle, the people will never know the truth. Most recent development is the dismissal of Rob Kerr, general manager of CEI and the formation of ”Climate Change Office.”

Is this what Karen Farbridge promised when she campaigned in 2006 to “Put Guelph back on track?” Just asking.

Scene Eight: Revenge: Thy sting is not so sweet

In early 2015, Susan Watson, a strong supporter of the Farbridge administration, hired a Toronto lawyer to represent her in an action before the Compliance Audit Committee (CAC). It was in regard to a $400 donation that had been given to former Ward Six candidate Glen Tolhurst by the civic action group, GrassRoots Guelph (GRG). Her lawyer argued that GRG was not permitted to donate to candidates under the Ontario Elections Act (MEA).

Two of the three CAC members voted to have an independent auditor examine Mr. Tolhurst’s election financial statement and the role of GRG. As members of GRG, my wife, Barbara, and I, were subpoenaed to appear before the auditor, William Molson of Toronto. We were questioned for an hour and a half. A couple of weeks later the auditor presented his findings to the CAC committee exonerating Mr. Tolhurst and GRG of any breach of the Municipal Elections Act.

The estimated $11,000 costs of this procedure were paid by the taxpayers and not by Ms. Watson who initiated the complaint.

Scene Nine: Along comes the mother of municipal financial failures

Starting in 2011, GMHI annually deposited a $1.5 million dividend to the city. In 2015, GMHI said it had sent a total of $9 million to the city as dividends. The only problem was the GMHI never made any money. Ten days after signing the report, she left the city to work for the Province of Ontario.

So far, more than $8.7 million, the cost of installing the two District Energy nodes, has either been written off or written down. But there remains a number of unresolved issues including contracts with those buildings connected to the co-generation thermal system supplying hot and cold water. The city cannot afford to subsidize these already installed connections to five large buildings. The statement has been made that it will continue to supply the service. The city has maintained that the Community Energy Initiative is under review with decisions to be made when a staff report is presented to council.

The real problem lies with the $65 million Guelph Hydro loaned to GMHI after board chair Karen Farbridge and her board voted to fold Guelph Hydro and its subsidiaries into GMHI. Since then, the city has taken control of Guelph Hydro. But a major problem remains. In doing so the city has shifted the Guelph Hydro loan to GMHI into its own books as an asset, although impaired. That means that in 2015, that impaired asset had grown to $69 million because GMHI had no money to even pay the interest. The huge problem is that there are no assets in GMHI or funds to even pay the interest on the loan.

Well, the fact is the city now has the loan on its books it’s like lending your son or daughter $25,000 to go to college and never expecting it to be paid back. It’s all in the family.

Scene Ten: The fallout of financial mismanagement will affect all of us for years

Please think about this: If Ms. Farbridge had been re-elected in 2014, we would still be kept in the dark while millions were poured into a scheme to make our city self-sufficient in electricity supply. If fact, Mr. Sardana said that in order to make the District Energy Nodes to break even it would require an additional investment of $60 million.

It is only recently revealed the former mayor and her colleagues on the GMHI board had secured land in the Hanlon Business Park and Downtown, to build large natural gas-fired generation plants as part of its Community Energy Initiative.

Again, public input was not invited or considered. Did the former mayor ever consider the billions it cost to dismantle two gas-fired plants, partially completed by the McGuinty Liberals to save four Liberal seats?

Well folks, so far it’s only cost you and me $96 million including the $65 million loan from Hydro.

When you stop and think, imagine what that $96 million could have done to capital spending in the city. Particularly for a new downtown library, the former mayor promised that 19 years ago. Or the South End recreation centre that was promised by the same mayor nine years ago as a priority.

These are bread and butter issues. We have been held hostage for ten years now by a radical group of progressive councillors who are “big picture” representatives. They obsess about climate change, energy, bicycle lanes, public transit, water sold commercially from the aquifer, protecting the environment.

Running a city is not rocket science. Councillor’s primary responsibility is to make sure everything works. It includes roads, water supply, waste disposal, parks and recreation, cleaning the streets, picking up the garbage and creating jobs.

And please don’t tell me that we are better off than we were four years ago adding more than 400 new full time equivalent employees, with property taxes soaring by 14.2 per cent and user fees for using our own dump and managing our storm water.

 

 

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