Tag Archives: Mayor Cam Guthrie

There are great expectations by the Mayor of giving Guelph Hydro away

By Gerry Barker

November 17, 2917

You can’t help but wonder what happened to Mayor Cam Guthire in the past three years?

His determination to trade Guelph Hydro for four to five per cent share of Alectra, a consortium of Local Community Distribution (LCD) corporation that it has been assembled. Apparently this is based on bigger is better — but for Guelph?

Is the Mayor smarter than the rest of us?

Well, lets dissect the Seven “Facts” (his words) that he is publishing online to residents. Keep in mind the city has admitted that it is spending $2.36 million to sell this merger with Alectra to citizens. Then the administration says the publicity program will be funded by the so-called Guelph Hydro dividends sent to the city annually.

What’s wrong with this picture? Guelph Hydro is a profitable, well-run utility. Its revenue is almost entirely provided by the 55,000 Hydro customers. It’s one of the illusions that the Mayor fosters in his remarks about the seven “facts” about the merger.

He claims that more than a year has been spent studying the sale or merger of Guelph Hydro. So why are the final negotiation details not being revealed until November 30? The meeting will be held 13 days before council’s final approval or not, as it may turn out.

My information is that the mayor is recruiting, aiding and abetting council’s approval by siding with the gang of seven whom, I’m told, most are in favour of the Alectra Merger which bespeaks of their understanding of the deal.

The Mayor claims “Guelph will benefit from rates that will be better than they’d be if Guelph Hydro remained on its own.” Well, that’s not true. The rule of mergers between LCD’s, freezes the power costs to consumers for ten years. In Guelph’s case it is reported the amounts to a reduction of $40 a year.

The Mayor is mixing apples and oranges here. If this merger is approved, operational

control of Guelph Hydro will be assumed by Alectra. Once that happens, Alectra controls the costs of distribution of power to its consortium. Guelph customers will have no say.

Let’s move on to examine the seven “facts” presented by the Mayor.

Fact 1 – Comparing historical rate increases does not tell the story.

GS Comment – The Mayor is right that no two electric utilities are the same for a number of reasons. But Guelph Hydro has been judged by the government as one of the best run in the province. Again, what are the specifics to accept or deny this merger? What’s in it for the citizens and customers of Guelph Hydro?

This is a decision that we are being asked to support, in a month and a half that will affect the city far into the future when those approving it on council will not be in office.

Just wondering: Why did the Strategic Options Committee (SOC) in closed session last February, remove the option of selling Guelph Hydro from it’s mandate to investigate both merger and sale of the utility? Also, were other interested parties in purchasing Guelph Hydro considered?

Fact 2 – Savings for everyone in Guelph

GS Comment – Consolidating “our business operations” Guelph and Rockwood customers will avoid an estimated 5 per cent distributuon rate increase by 2021 and another estimated five per cent increase in 2016.” The basic information supporting this claim is not revealed nor are the savings to hydro customers.

The Mayor talks about the “potential” savings to the customers but will take years to be beneficial. The day this merger is approved is the day we lose control. The dependence on the Ontario Energy Board to protect our interests and increase dividends to the city counts for nothing. The Mayor cannot assure the citizens that this merger will be beneficial.

On a personal note, we have yet to receive any information outside of the social media world, any pronted information that details what this merger means as customers of Guelph Hydro. Not in the 13 years, we’ve lived here that included the abortive attempt to sell Guelph Hydro in 2008 to Hamilton and St Catherines.

This whole exercise is aimed at the 18 to 44 demographic by sending their message on the Internet. It excludes all thos folks who do not own or use a computer but are voters and customers of Guelph Hydro.

Fact 3 – Rates for busineses in Guelph

GS Comment – Rates for commercial/industrial power users are 39 per cent lower than that of Alectra. So the Mayor states that he expects the Ontario Energy Board would permit Guelph to operate as a “separate rate zone and commercial distribution rates would continue to be lower.” That’s called betting on a long shot with the potential of coming in last..

Next week, guelphspeaks.ca will publish an open letter to the residents of Guelph that is an unbiased report concerning the pro’s and con’s, of the Guelph Hydro/Alectra proposed merger. The author is an Energy Lawyer, Jay Shepherd, who has written extensively about all aspects of Ontario’s power, supply, distribution and government policies.

Fact 4 – Customer service and response time

GS Comment – Despiter the mayor’s claim that he has heard from the community of their concern about customer service and reliability, the minute that he signs this agreement, he cannot guarantee anything. In fact, Guelph Hydro’s record in those two key areas is among the highest in the province with an above average rating in the 90 per cent range well above the provincial average.

The quality of operations and the staff perforamance reflects the evidence that Guelph Hydro is well run and profitable compared to most municipally owned power utilities. Perhaps when a more careful investigation is conducted, Guelph Hydro may be part of a like-minded grouping of LCD’s where customer interests will be considered and transparency will prevail. What’s the rush?

Fact 5 – Who owns Alectra?

GS Comment: As best that can be told there are two Alectra’s. These are Alectra Utilities and Alectra Inc. the one that was incorporated January 31, 2017.

In its press releases, Alectra does not distinguish the roles of the two corporate entities. Apparantly in publishing the “facts” about who owns Alectra, the Mayor apparently cannot figure it out either.

Alecrta Inc. states that it is a publicly-owned utility formed this year. It is like a landlord that owns Hydro One Brampton that it purchased, and the rest of the Alectra family are partners. By agreeing to merge with Alectra turning over municipal control of each member’s power operation, we lose control.

“Following a merger, Guelph would join this list of municipal shareholders. We would continue to have an important say over hydro decisions affecting our community and we will continue to receive annual dividends we can re-invest towards community initiatives,” states the Mayor without attribution.

Here are two giant stretches of the truth. How can Alectra Inc. claim the members of its LCD consortium are publicly owned when Alectra has control? If Guelph council signs this agreement, say goodbye to Guelph Hydro in return for a miniscule share of Alectra’s profits, if any.

On the increased dividends that the mayor claims as fact, what assurances will the city receive of any increased profit? We’re facing giving up our power distribution utility for what? What’s even worse the chances are we’ll never know anything about the corporation that wan’t to control our property without any recource.

There is one thing we’ve learned about Alectra. It has borrowed some $225 million from a number of power utilities in British Columbia, Alberta, Manitoba, Quebec and New Brunswick. The mayor has steadfastly said that the Alectra deal is not a sale and that the out of province investors are not shareholders but only receive interest on their investments.

Summarizing: Guelph city council is negotiating with a corporation that has not been in business in Ontario for a year; a corporation that has borrowed $225 million from outside Ontario for unknown reasons; there is no reconciliation of the share of Alectra that Guelph will receive. As Alectra grows in its consolidation spree, what effect does this have on Guelph’s proposed share?

Would you buy a used acr from these guys?

Fact 6 – Jobs

GS Comment – The Mayor says that Guelph Hydro employs 130. He then says 70 per cent of those people would be unaffected by the merger. Doing the math, 91 employees, chiefly the technical staff, will remain. That means 39 staffers could be vulnerable unless they want to commute to Mississauga.

Alectra says that it intends to set up a Green Power Trechnology Centre in Guelph that will create a number of good-paying jobs. Key word: “Intends.” Perhaps former Mayor Karen Fabridge may head it up as she has a lot of experience in Green Power.

These “Facts” presented by Mayor Guthrie, are not facts at all. Instead, the real facts are hidden from the owners of Guelph Hydro as final negotiations are conducted in closed-session. If and when the real financial and operational facts are made public, then council has a fiduciary reponsibility to oppose the merger.

Fact 7 – Have your say

GS Comment – It is strange why the city spending $2.36 million to convince citizens this is beneficial to them, their children and their children. It has been a designed program to influence the citizens into believing it’s a good deal, and it’s without public debate with the principals. Put it this way, when a developer applies to build an apartment building in Guelph, are not the citizens living nearby informed of the plans and the affect on the neighbourhood?

So why is this Alectra deal any different? The owners, the citizens, are deliberately being kept in the dark. The Mayor’s “Facts” do not meet the standard of transparency or public participation in the city’s business.

So why is he so convinced Council should approve this merger

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We are being fed pablum and baloney concerning the Guelph Hydro proposed merger with Alectra Inc.

By Gerry Barker

November 13, 2017

The pablum is a metaphor for our innocence and naïveté. Similarly, the baloney is the shallow approach to take over Guelph Hydro leaving out the pertinent details that justifies the Alectra Inc. merger proposal.

Confused? You are not alone.

In last Tuesday’s weekly paper, guest columnist Bob Bell, (no kin to Coun. Bob Bell), identifies himself as vice-chair of the Guelph Hydro Electric Systems Inc. In it he stated the reasons why this merger with Alectra is a win-win for the 55,000 hydro customers.

In reality, this merger proposal is more like a Chinese fortune cookie. You never know what the message is inside. That folks, is what Mr. Bell, a member of the Strategic and Options Committee (SOC), is selling. Here are some samples:

He says the SOC was “tasked by Guelph City Council” to review the options for the future of Guelph Hydro. This committee was formed in October 2016 and its mandate was to consider the sale or merger of the city-owned public utility.

Here is the fortune cookie example again. Just four months on the job, the SOC membership changed leaving only CAO Derrick Thomson and Hydro vice-chair, Bob Bell as originals. In February, a few days after the incorporation of Alectra Inc. January 31, 2017, the decision was made by the revamped SOC, to take the selling of Guelph Hydro off the table and concentrate on just merging the system.

In my opinion, this proposal was already in the oven and citizens had no information or confirmation of what the SOC and Alectra were cooking. And right now we still don’t know the details of this deal.

Here’s flashback for you: It’s June 2013 and Mayor Karen Farbridge, as chair of Guelph Municipal Holdings Inc. (GMHI), releases the 2012 annual report. In it she says that a priority of GMHI was to research the potential of merging Guelph Hydro with another municipal utility. That year GMHI lost $2 million, a figure that was not included at the time but learned later.

Well, the cookie crumbled in 2014 when Cam Guthrie defeated the mayor. Since then, the financial and managerial disaster of GMHI under the leadership of Ms. Farbridge, has taken three years to unravel, well almost.

Trying to put the GMHI Humpty-Dumpty together again

A key point pressing the GMHI wrecking crew charged with putting the pieces back together, was about the money spent by the Guelph Hydro subsidiary company, Envida Community Energy. Envida was the construction company charged with building the GMHI solar panels on public buildings, District Energy pumps and the underground thermal energy system installations. The resulting debt was transferred back to Guelph Hydro that declared a $93 million long-term debt on its books in 2016.

Keep in mind that these funds are all coming out of our pockets.

The consolidated audit of GMHI by the accounting firm KPMG confirmed this debt borrowed by GMHI included two debentures totaling $93 million but also the evaporation of $63 million in shareholder equity in GMHI.

Yep! It all comes out of our pockets.

It remains possibly the worse financial meltdown in the city’s history.

Now, the mayor is pushing to join our Hydro distribution system with an organization of dubious credibility and no financial track record.

Guelph Speaks has learned that even by giving Alectra its $228.4 million in installed transmission equipment, apparently Alectra will not assume that $93 million debt.

As both parties, Alectra and Guelph city council, munch through the fortune cookies, Chairman Bob Bell spins a yarn of possibilities, promises and assumptions. Comparing this proposal is nothing but a sales pitch, not fact-based for responsible consideration.

Note: On Thursday November 16, guelphspeaks will publish the 2,600 word neutral dissection of the proposed Alectra merger. Energy lawyer Jay Shepherd, of Toronto, writes an open letter to Guelph residents. He explains details of the problems facing mergers of Ontario’s municipally-owned power distribution corporations.

It’s a factual assessment that should clarify the unknown facts about this merger deal. His conclusion is interesting.

Mr. Bell writes that Alectra will bring “reliable services maintaining local jobs, investing in the community and focusing on environmental sustainability as top priorities.”

But isn’t that what Guelph Hydro does now?

Then the Bell guest column goes on to say: ”That after careful review of all options, “the committee recommended to Guelph city council that Guelph Hydro merge with Alectra.”

That’s it? Are we out of cookies?

When the people’s business is done behind closed doors

The first thing we have to remember is that the SOC and city council meetings are conducted in closed-session. What is preventing city council or SOC to openly reveal their “careful review” of all options for supporting this merger?

Mr. Bell claims that the city will still retain ownership of Guelph Hydro. “Under the proposal, the City of Guelph will join 15 other Ontario municipalities owning a share of the electric utility (Alectra). This means that our city council will continue to have an ownership stake and receive dividends each year. Given that the City of Guelph will own a share of a larger utility, these annual returns are expected to increase.”

That sounds like another “expected” promise that is as hollow as the entire article as published.

The Alectra team is throwing the book at citizens using a fancy website, expensive brochure and phone survey. The campaign’s so-called public information sessions across the city carefully set up to not allow questions to be asked by the principals. The entire exercise to persuade citizen, read that the 13 members of council, who represent the people is a mockery and insult to the populace.

The cost that we are paying for this give away to Alectra has already been established by the city to be $2.36 million. Just to be sure of this, we are paying the promotional costs of this attempt to take-over Guelph Hydro.

Does this make any sense to you?

The Alectra campaign leaves out the thousands of residents who are not social media savvy but are dependent on electricity. This includes the elderly, disabled, the working poor and those confined in retirement and nursing homes.

Look at it this way: Guelph Hydro sends out 55,000 bills a month chiefly through snail mail. Here is an inexpensive way to inform all the customers of the details of this proposal. Nope. Instead, this Alectra sales campaign is focused on the electronic media.

The response was that the dividends that Guelph Hydro pays the city annually would finance the Alectra pitch. But didn’t that money come from the citizens who pay their hydro bill?

Alectra says the board of directors will each receive $25,000 plus $2,500 for each board meeting they attend. The company says that the directors “honourarium” is expected to increase to $35,000.

That sounds like the good jobs claim start   a at the top of the organization.

It hurts me when I laugh at irrational behaviour

The Baloney Scale 1: If city council approves the proposal, Guelph will lose control of Guelph Hydro. So at this stage, just 27 days left, citizens remain in the dark because of the secrecy associated with the negotiations. There is no recourse to exit this merger once council approves it.

Baloney Scale 2:

Guelph Hydro’s entry fee into the Alectra consortium is transferring all its assets to Alectra with no compensation. Oh! There is one caveat. Alectra will not assume Guelph Hydro’s long-term debt of $93 million.

In summary, we give away our Guelph Hydro system to Alectra and in return receive an undisclosed interest in a large corporation with a short-term financial record?

Who is negotiating this deal, Bernie Madoff?

I think I’ll toss my cookies if this cock-eyed deal is approved by city council.

 

Please Note: There is a group of concerned citizens who oppose this merger. Any resident of Guelph, 18 years or older can sign the petition to be presented to Council before the December 13 meeting to approve or reject the merger. Please send your name, address and ward in which you reside to gerrybarker76@gmail.com. Your name will be added to the petition. Volunteers willing to participate in collecting names are most welcome. As the project develops read guelphspeaks.ca for further information.

Never underestimate the power of the people.

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History proves selling Guelph Hydro won’t solve the basic problems facing our city

By Gerry Barker

October 30, 2017

Our mayor, a man with perceived municipal fixes and promises, states that he voted against seven budgets over which he participated as a councillor and Mayor in the last three annual budgets. Perception is always accepted when the former administration fumbles multi-million cost overruns building the new city hall.’

In this case, the people voted with their feet and Ms. Farbridge was defeated. The defeat was exacerbated by the Larkin effect in convincing council to completely renovate the police headquarters building at a price tag of $34 million.

The original estimate by the Guelph Police Service Board was $13 million just seven months prior to council approving the former police Chief’s plan. Chief Larkin had already accepted a job as chief of the Waterloo Regional police service and morally had no skin in the game.

Instead the task of selling the new plan fell to former mayor Farbridge and her fellow councillor on the Guelph Police Services board, Leanne Piper. Council approved it in August just before all capital projects were frozen due to the upcoming civic election Oct. 27.

Former Chief Larkin publicly supported the Mayor in her re-election bid, breaking a basic rule of police officers not publicly expressing support for a political party or candidate in a civic election. The mayor was defeated anyway.

They’re breaking up that old gang of mine

But post-election, a group of Farbridge appointed senior managers who, without hesitation in November 21, 2014, after the defeat of the Farbridge universe, in the vacuum of political masters, reorganized the senior management staff. The group, headed by former Chief Administrative Officer (CAO), Ann Pappert, (resigned May 2016); current CAO Derrick Thomson, (resigned March 2016 and returned June 2016 as CAO); former DCAO Mark Amorosi, (dismissed February 2017); Director of Environmental Services, Janet Laird, (resigned November 2014); Chief Financial Officer Al Horsman, (resigned August 2015) Director of Operations, Derek McCaughan, (resigned November 2014); City Solicitor Donna Jacques, (resigned February 2017).

The senior staff re-organization promoted them a higher salary reflecting the new rank, as the scale of the newly named Deputy Chief Administrative Officers (DCAO) replacing the title, Executive Directors.

Two of the three senior managers of Emergency Services, Police Chief Larkin and Fire Chief Shawn Alexander resigned in 2014.

The city did not have a Chief Financial Officer from November 2014 until June 2017. Instead there were three general managers of finance and treasurer during that time, Katrina Power, Janice Sheehy and Tara Baker who coming off maternity leave is the current GM of finance and treasurer. During Ms. Baker’s absence, James Krauter was appointed interim GM of Finance.

And there were others including the firing of veteran Chief Building Inspector, Bruce Poole, who was rewarded by winning a $1 million lawsuit against the city for wrongful dismissal. The settlement was never revealed.

You don’t need an adding machine to figure this out

It all added up in a brief two years as chaos in high places. Most citizens were left in the dark about all this chaotic fallout that affected their daily lives. This was mostly ignored by the local media.

In my opinion, the seven councillors, who vote as a bloc, are overly protective of the senior staff and coupled with the high number of closed-session meetings conducted by council, the public is shut out, shunned and used whenever it is convenient.

It is a very serious culture of entitlement and arrogance that drives the great divide between council and the people they represent. Only we the people can change it and our opportunity comes next October.

Change not only occurred at the senior civil servant level, but also was completed before the newly elected Mayor had a chance to try out the seat in his office on December 1, 2014. It was slick and self-serving move before the new administration was officially in charge.

The question arises, was the incoming mayor and council advised of these major managerial changes and increases in pay? Did the incoming council agree to this before being sworn in?

What motivated the senior management drain?

So the new council approved a budget on March 2015 that reflected the agenda of the seven member progressive majority on council.

Newly elected Mike Salisbury initiated one of my favourite observations. He proposed taking unspent 2014 money for expanding bike lanes on Woodlawn Avenue, adding the 2015 bike lane commitment of $300,000 to spend $600,000. It sums up council’s inability and failure to understand that it is illegal to move money that is unspent in one fiscal year adding it to the current fiscal year. Council didn’t seem to care they passed it anyway.

The Woodlawn job was botched and the engineer in charge left the city.

The Mayor just received his indoctrination that he cannot depend on support of the majority of this council.

The great Salary-Gate cover-up

So, in December 10, 2915, in closed-session, during the final budget approvals, we later learned that four senior administration officials including Ann Pappert, Al Horsman, Mark Amorosi and Derrick Thomson, were awarded a total of $98,202 salary increases. The trouble is they never revealed those huge increases until the provincial Sunshine List published the details in March 2016.

That’s when Derrick Thomson resigned; he received a 19 per cent increase in that secret closed-session meeting Dec. 10. In April 2016, CAO Ann Pappert, resigned and she received a 17 per cent increase totaling $37,000 taking her salary to $263,000 plus a $6,400 taxable benefit. This increase placed Ms. Pappert as one of the highest paid CAO’s in Ontario. It is noted that while only working for five months, the Sunshine list for 2016 shows she received her full salary.

During this time it was odd that Mayor Guthrie stoutly defended Ms. Pappert even to the extent that he threatened legal action against a citizen who published damaging evidence of Ms. Pappert’s performance in the five years of service as head of the city staff.

His defence of Ms. Pappert is even stranger when he knows of her involvement as Chief Executive Officer of Guelph Municipal Holdings Inc. (GMHI). This multi-million dollar attempt by then mayor Farbridge as chair of GMHI has been audited by the KPMG accounting firm. The consolidated balance sheet shows the financial losses including some $63 million in shareholder equity that is worthless because GMHI has no assets or revenues.

So why is GMHI still there?

What follows is strictly an educated theory.

The Strategic Options Committee (SOC) is part of GMHI. The current chair of GMHI is Mayor Guthrie.

Last week with great fanfare, the Mayor announced that Guelph Hydro would merge with Alectra Utilities of Mississauga. A memorandum of agreement has already been signed. The mayor claims that Guelph’s 55,000 hydro customers will witness lower rates as a result of the merger. And there’s more good news, the dividend paid to the city will increase. We learned that the Mayor would be appointed to the Alectra Inc. 14-member board of directors.

First, neither the Mayor nor Alectra have any say in what hydro customers must pay for electricity across the Province. Those rates are set by a provincial agency. Perhaps the Mayor can explain why the city will receive greater dividends as a result of the merger.

What was not discussed in the press conference were the pertinent details such as how much is Alectra paying for Guelph’s Hydro system valued at $228.4 million? What is the book value of goodwill, cash flow details, servicing the customer base, staff layoffs, value of contracts and what happens to Guelph Hydro’s $93 million in long term debt?

In my opinion, that was part of the GMHI salvage job. As I understand it, that money was loaned to GMHI by a subsidiary company of Guelph Hydro. It was in the form of two debentures with no apparent security or collateral. The debt repayment was never made by GMHI and unpaid interest alone was $10 million.

It is apparent that the interest was forgiven and the GMHI debenture debt, was quietly essentially returned to the lender, Guelph Hydro, where it now sits as a long-term debt on Guelph Hydro’s books.

Birds of a feather, flock together

This all happened because the principals, the City, GMHI and Guelph Hydro are all owned by the taxpayers. It became a garden of manipulation, sloppiness and incompetence tilled by a corrupt and secretive administration.

We should not let this occur again and vote to clean up the garden of organized deception and waste of our resources.

Now you have to ask: Is this maneuver linked to the Alectra deal? Until the truth comes out describing the details of this deal, the people cannot support it. The problem is the SOC supports it, the Mayor is effusive in his support but where do the other 12 members of council fit in when they, as our representatives, vote December 13 to approve it or not?

If you believe this proposed take-over of Guelph Hydro is in the best interests of the taxpayer owners, then re-elect those members of council who voted to approve it.

We still say: NO SALE.

 

BREAKING NEWS

Evidence has just surfaced about Alectra Inc’s expansive plan to own and control the second largest community electric distribution company in North America, is about to take over Guelph Hydro. Watch Guelph Speaks for details to be revealed soon.

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How the administration’s Cone of Silence closes the door on public participation

By Gerry Barker

September 18, 2017

Today there is good news and bad news

First, it’s my birthday, please no applause.

Second, is yet another confirmation that we the people of this fair city don’t count when it comes to the operations of the administration headed by Mayor Cam Guthrie. The Mayor sent out an explanation of how he “polices and oversees” closed-session meetings of council. He claims it ensures the discussion stays within that which the Municipal Act (OMA) allows. He added that he takes this responsibility seriously.

Or, is he suggesting that the closed-session subject strays into other discussions not realted to the OMA authority?

So what does this mean to us? Well, after three years in office, little has changed when it comes to properly informing the public of city business. The system works like this and was used extensively by the previous administration:

Whenever there is a contentious issue, let’s use the $2.5 million loss by the city-operated recycling plant for starters, the council dives into closed-session. It uses a section of the OMA that defines the criteria for holding such a meeting.

Can the Ontario Ombudsman open the closed-session meetings?

Every one of the 445 municipalities in Ontario is bound by the terms of the OMA. The section allowing closed-session meetings of council is very broad. So broad in fact, that the Ontario Ombudsman, the independent overseer of all Municipal and School Board meetings, handles an estimated 35 per cent of its docket investigating closed-session meeting complaints at many levels

Now here’s a wrinkle. Last December, I requested the minutes of a closed-session council meeting held December 10, 2015. I requested that the Ombudsman investigate this and was told that Guelph had its own “closed-session investigator” known as Amberlea Gravel based in London. After requesting an answer after waiting more than four months, I was told that my request was denied.

Now Amberlee Gravel has been on retainer to the city since 2008. Since then it has investigated three closed-session complaints or requests for information. None were approved. The organization was hired by the Farbridge administration. The amount of its retainer paid annually over nine years is not available.

This was a deliberate move that effectively put the lid on the public being informed of the contents of any closed-session. It remains an integral part of the Cone of Silence that shuts down public participation in city operations.

Introducing the Integrity Commissioner, the second leg of the Cone of Silence

Five years ago, the Farbridge administration hired a Caledon lawyer to act as its Integrity Commissioner with an annual retainer of $5,000 plus time spent investigating breaches of the code of conduct by councillors and staff. The reason was her concern, along with her Chief Administrative Officer, Ann Pappert, of alleged leaks of information that was supposed to be private not for public access.

The irony of this was a demand for the Integrity Commissioner to investigate the action of then Coun. Cam Guthrie. His alleged offence, joining with other opposition councillors at the time, was to request a Freedom of Information release of a public document. The department involved refused to allow Mr. Guthrie to see the document that the province had already released to the public.

Following an investigation, the Commissioner decided there was no reason to pursue the matter and sent a bill for $10,000.

What this accomplished was warning any councillor or staff member that they would be disciplined if it were proved they revealed discussions and decisions made following a closed-session meeting of council. It also had blanket coverage of disciplining any councillor who broke the code of conduct. That’s what occurred in the Guthrie case.

Both those weapons are still in place today. That’s the Cone of Silence that surrounds the administration and prevents public participation in the affairs of its city.

Shutting down public participation using leg three of the Cone of Silence

We now know that Ms. Farbridge as chair of Guelph Municipal Holdings Inc (GMHI) held closed-session meetings during the four years that created one of the greatest losses in the history of the city. The Chief Executive Officer of GMHI was Guelph CAO, Ann Pappert.

During the four years, GMHI paid an annual “dividend” of $1.5 million to the city despite a money losing operation. In fact, GMHI never made a profit and by 2015 was worthless because it owed more money than it could pay its creditors. That essentially wiped out the $65 million shareholders’ equity in GMHI. In this case, the shareholders are the citizens of Guelph whose interests were represented by the city council.

That’s so much for the lack of public participation, accountability and transparency. The citizens are the victims in this betrayal of the public trust for the past 10 years.

Mr. Mayor, let’s drift back to early 2015, your first year in office. A citizen launched a legal complaint against another resident claiming he received an illegal donation of $400 from a citizen’s activist group, Grassroots Guelph.

Susan Watson, a friend and supporter of the former mayor who was defeated in October 2014, asked the Compliance Audit Committee to audit the election financial report filed by Mr. Glen Tolhurst.

An auditor specializing in candidates’ financial reports was hired by the city to investigate. William Molson interviewed the parties involved including my wife and me. It did not take him long to figure out that Mr. Tolhurst was not the target of Ms. Watson’s claim but was GrassRoots Guelph of which I was one of the founders.

Bottom line: Mr. Molson found no evidence that Mr. Tolhurst or GrassRoots Guelph violated the Ontario Municipal Elections Act. Here comes the kicker. The bill for all this was more than $11,000 and council, headed by Mayor Guthrie, ruled that Ms. Watson was not responsible for the costs. The taxpayers had to pick up that bill.

For example, there are five members on this council who benefited from Ms. Watson and her husbands’ donations to their 2014 election campaign. Now you know how it works: It’s whom you know not what you know, that counts.

So where was our Mayor when he claims that he takes closed-session matters seriously? This was a decision made in closed-session and announced by the City Clerk, Stephen O’Brien.

The Mayor speaks to a selected few not the citizens

Mayor Guthrie’s three-page explanation of the necessity of holding closec-session meetings, was sent to 16 individuals including 12 members of council. It was the result of a letter sent to the Mayor by Guelph resident by Pat Fung, CA, CPA asking for an explanation why council conducts much of its business in closed-session. He specifically addressed the $2.5 million loss concerning the city’s recycling centre.

In his September 8th email, the Mayor detailed why closed-session meetings are needed and the criteria for calling one, more or less.

In his email reply to Mr. Fung’s question, the Mayor claims that a program of service reviews was started by his administration. He says that the reviews are an excellent way to show taxpayers that “we take department reviews seriously.” Well, we certainly hope so.

Further, he says the reviews “look to identify opportunities … to confirm that our services are effective and efficient.” But isn’t that what management should be doing on an ongoing basis?

Last year, it was suggested that an independent audit firm should conduct a staff -rationalization review. That was shot down by the progressive majority on council because of a potential threat to their labour supporters. They claimed it would cost too much. As compared to the loss of $2.5 million in recycling operations, which is only one part in the Environmental Services department, how does that argument stand up today?

Question: Why did the Mayor select a tiny sample of the electorate to convey his explanation of the necessity of holding closed-session meetings of council?

The Mayor agrees with Pat Fung that council has a “may or may not” alternative to hold a closed-session. He then goes on to say that council must vote to discuss items allowed under the Act as exemptions that would be of a “closed” nature. So, by that definition, why is losing $2.5 million operating the recycling plant an exemption?

Moving along the Mayor explains: “In this particular case under Section 239 (b) and (d) states that council can “consider” in relation to personal matters about an identifiable individual, including board employees and labour relations or employee negotiations and potential labour or union impacts.”

What is so private about not revealing reasons for the loss of $2.5 million by city employees? Whose reputation is being protected here?

The provincial Sunshine List lets the cat out of the bag

Flashback: December 10, 2015, council in closed-session, voted to increase the salaries of the four top city managers by $98,202 for 2015. The only problem was, the citizens were never informed. Not until Guelph Speaks posted the details when the provincial Sunshine List was published more than three months later, March 31, 2016. Those increases ranged from 14 to 19 percent.

Chairing that meeting was Mayor Guthrie. Is this what he means when he says he takes the policing and overseeing of closed meetings seriously? The Mayor had to know the details would be eventually published.

What citizens have to question is why was it deliberately covered up and when, there was not one iota of reasons why these four were entitled to have their increases concealed from the public.

In my opinion, it was an abuse of the public trust by its elected officials. So, we will never know which councillors voted for the increase and which did not. They were all bound by the closed session omerta, fear of reprisal for leaking the information. That’s a primary example of how the Cone of Silence protects every one in the administration but not the taxpayers.

The public had the right to know what their senior managers were being paid and they were all identifiable. Instead, council concealed the decision avoiding transparency, accountability and potential negative public reaction.

It gets better, in August 2016, Coun. Cathy Downer asked the Human Resources department for a breakdown of the retired Chief Administrative Officer Ann Pappert’s final salary package. It included unused vacation and sick leave benefits and a $28,000 retroactive performance payment. She left the city May 26, 2016 and received $263,000 in 2016 for five months work.

It was complicated when Ms. Pappert announced in March 2016 about the same time that the news of her 17 per cent increase was revealed in the Sunshine List, that she would be leaving but would stay on to assist her successor. That turned out to be Derrick Thomson who had resigned to take a job with the Town of Caledon. He took over in June as CAO and announced in the fall of 2016, that he would make his salary and taxable benefits public. The 2016 Sunshine list showed he earned $245,000 plus a taxable benefit of more than $9,000.

Of the four senior managers who received that large salary increase Dec. 10, 2015, only one still works for the city, CAO Thomson.

Question: Will the service review of the recycling plant explain how it lost $2.5 million?

Moving along the Mayor explains: “In this particular case under Section 239 (b) and (d) states that council can “consider” in relation to personal matters about an identifiable individual, including board employees and labour relations or employee negotiations. … and potential labour or union impacts.”

Who would know better to keep those details secret than our council? There’s that Cone of Silence descending again.

The case of the missing 53,000 emails

This brings up the case of former Chief Building Inspector, Bruce Poole, who was fired by the former CAO, Ann Pappert. Mr. Poole, a 30-year veteran in the building department, and chief for 20 years, sued the city for wrongful dismissal claiming $1 million.

The alleged reason for his dismissal was because he complained that some 50 building projects being conducted by the city did not take out building permits. He said he would have to take the information to the province for failure of the city to follow the rules. For carrying out his responsibilities, he was fired.

Well a funny thing happened. Mr. Poole’s lawyer, as part of examination for discovery, requested from the city all electronic files pertaining to his client. Instead, he was sent 53,000 emails from the city’s Information Technology department in an external drive that contained personal information about city employees including performance reviews.

To make a long story short, the case was quickly settled in Mr. Poole’s favour and the errant files returned.

Details of the settlement were sealed at the request of city. The city solicitor resigned to take another position. It is yet another example of using the Cone of Silence to paper over incompetence.

Truth or consequences

About a week following the December 10 closed session meeting, council again in closed-session, approved a protective barrier, Bylaw 19995. It is designed to provide legal assistance to any staffer or elected official facing a procedure brought by a citizen or corporation. It was yet another leg of the controlling Cone of Silence.

Question: Has the Corporation of City of Guelph or any employee or elected official ever been sued for defamation, slander, or libel? This is the Mayor’s explanation of the consequences if the corporation failed to not conduct its business in closed-session.

This effectively makes it almost impossible to sue city hall, its hired staff and elected officials. Again, the door is slammed shut and public participation is denied and ignored.

Question: Does the city not have liability insurance to protect employees from civil suits? If so, why is it necessary to have such an offensive bylaw to protect the members of the city administration? It is also interesting to know if the city employees or elected officials have ever been sued.

This mélange of administration stiff arms to protect their own interests and not those of the people who pay their salaries, benefits and guarantees their pensions, has reached epidemic levels.

The shadow of deceit and obfuscation hangs over 1 Carden Street like a darkening cloud of public distrust of its managing institutions that hides behind appropriated OMA terms and conditions.

October 2018 cannot come soon enough.

 

 

 

 

 

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When Gerry met Sally and other taxing issues

By Gerry Barker

September 11, 2017

Heard from a number of people this week questioning administration decisions that end up costing citizens. Here are three examples.

The pitch to spend $90,000 for security guards at City Hall

The first example is a report that the city wants to hire five security officers plus a vehicle to protect the city staff from the taxpayers who are entitled to voice their complaints at the welcome desk in the foyer of our city hall.

The lead in the local weekly was that the Mayor overheard an individual being rude with the staff at the customer service desk. Turns out, according to the city supplied statistics, that in 2016, there were 448 security calls for staff assistance at city hall and 216 police responses. The occurrences are increasing this year.

The staff is recommending hiring two security guards as well as purchasing a vehicle for their use at an estimated cost of $90,000. The matter was deferred until the 2018 budget negotiations commence later this year.

In the grand scheme of things it could be argued that $90K is no big deal when the whole city operating budget will be more than $350 million. But it is a big deal.

As a public service here are some considerations.

* Under what authority can these proposed security guards act? Will they be armed? Why is a vehicle required if they are stationed at City Hall? What kind of training and background will be required?

The role of the police is quite clear. They are required to protect public property. But it seems that the degree of service staff discomfort in certain situations determines who should respond for assistance.

It is tricky and happens often, totaling 664 calls in 2016 for a quick decision by service staff as to whom to call for assistance. I am curious over those numbers compared to other peer cities and how they handle encounters with the public staff.

The report in the weekly said issues include: “Disturbances, drug related calls, intoxication, trespassing, theft, vandalism, assault against staff and the public.”

It would appear all those occurrences called for police response except “disturbances”. Aren’t all those examples disturbances?

Here are a couple of immediate solutions:

One, select two volunteers from the current staff, train them with no reduction in their previous salary, skip the vehicle and have them in uniform during the hours the city hall is open to the public. No increase in costs because we are already paying them.

Along comes Sally

The other solution is to have a trained Doberman named Sally behind the counter in full view and tied to a quick release button. Sally would become the guardian of the service desk at City Hall but not to be petted. There is a technicality, who walks the dog and who is the handler? Sally could do double duty chasing the geese from the parks when not guarding city hall.

The other benefit is Sally could have pups and begin a Doberman dynasty being guardians of the public places. And the overhead of training and controlling Sally would be dog chow compared to the $90,000 recommended by the staff.

Okay, so I’m being facetious. But this is a management problem that involves personnel training, discipline and police support. The Mayor is right when he says City Hall should be safe and open to the public. He may also investigate why there appears to be an increasing number of incidents at the service desk. Perhaps it may be the increasing dissatisfaction with the city operations?

*            *            *            *

After six years, why is Guelph’s recycling operation losing $2.5 million a year?

A report by Tony Saxon in the online report Guelph Today, says that the blue box system of collecting recyclable materials is costing $2.5 million annually less than the $4.9 million that the facility recovers after sorting.

Here are a couple of problems. One is the revelation that Environmental Services is accepting containers of recyclable material from Simcoe County. The other is another area of the deal struck with the Region of Waterloo to process 20,000 tonnes of wet waste to be processed in the $34 million organic waste compost facility. That target has yet to be reached but volumes of wet waste from Waterloo are increasing.

While the two are not related they are part of the six departments of the city’s waste management organization. What connects them is decisions by the previous administration turning Guelph into a waste dump for other municipalities. Why do citizens have to finance overbuilt facilities costing an estimated $55 million in capital funding to service other municipalities?

Neither of these facilities has met its operating costs since inception. In the case of the organic composting plant, it is not operated by city personnel but by a subsidiary of Maple Reinders, the builder of the facility. It’s ironic that Guelph citizens who financed the facility cannot even obtain any compost provided by the plant. It’s sold elsewhere.

Did waste management not learn anything about accepting recyclables from Detroit that cost some $1.5 million when the alleged contract was shut down? Solid Waste General Manager, Dean Wyman, told council that an extra shift was needed to process the Detroit material but the city would make $370,000 per year. The fallout of this and other mismanagement issues included the retirement of former Executive Director Janet Laird of Environmental Services, and GM Wyman who resigned to take a job in Edmonton.

The historical reasons for this waste management failure to deliver results costing millions of dollars rests with the former Farbridge administration. Public funds invested in a variety of projects and schemes were designed to slow delivery of garbage to the land fill site.

That target alone has failed, as there is still a high percentage of waste still going to the landfill since 2011, when the organic processing facility became operational.

This was all the doing of the council of the period headed by former Mayor Karen Farbridge. She was aided by a cadre of supporters who believed that the money they were spending was making their city a world-class leader in waste management.

The decision to import other municipalities’ garbage to Guelph was an example of the terrible business plans associated with these waste management projects. Already there are rumblings of outsourcing the operations to private enterprise. The unions that could be affected are readying their opposition.

Here is a one example of how outsourcing will pay off and save up to $4.9 million per year. Cut a deal with Waste Management to process Guelph’s recyclables in their upscale automated plant. Depending on the terms of the Simcoe County contract, wrap it up. Shut down the Guelph recycling facility.

All that is required is political will. It’s something to think about when the 2018 budget is being crafted for next year’s civic election.

The people are the key to making change. They did it in 2014 when Cam Guthrie defeated the former Mayor by more than 5,000 votes. It can happen again.

*            *            *            *

Guelph Transit route changes map is like interpreting a Salvador Dali painting

The city news section of the local weekly printed a full-page diagram of the new route changes of Guelph Transit. I do not use Guelph Transit but if I did, I would need an interpreter trying to follow that ad illustration.

Someone commented that the new routes are designed to serve the 20,000 incoming University students. There is no doubt they are imporant customers as they must pay $75 per semester for a bus pass. The average course includes two semesters per school year that amounts to $3 million in revenue every seven months.

The next questioin is what is the total budget of Guelph Transit? The last time I checked about four years ago, the city was subsidizing the system by $12 million. That being true, it would appear that the citizens are paying a huge price every year to supply public transportation. It is a system used by less than ten per cent of the permanent population.

Guelph needs a system of public transit, if for no other reason than to cope with the growing mobile population and changing demographics. But it went off the rails in the previous administration. As long as I can remember in ten yeas of commenting, there has been a transit strike by the union representing the workers. Also there was the matter in 2013 when an audit by the internal auditor of the system’s overtime charges revealed a cost of $1 million for a staff of about 350. That year it averaged $2,857 for each employee.

More worrying is the number of Guelph Transit general managers who have been employed and released. So what’s wrong? The first thing is to bring clarity and transparency to the table. This could result in everyone on staff being accountable.

It is unreasonable for a system this size with our city geography to be profitable. If, as former councillor Maggie Laidlaw once predicted, there would be no cars on Guelph streets within 20 years – I believe we have ten years to go to fulfill her prediction. Maggie was an ardent cyclist, rain or shine and believed that fossil-fueled vehicles had to go.

Well, the opposite has occurred and there are more cars and trucks on our streets than ever before. And the traffic congestion has been exacerbated by the previous administration’s policies to reduce vehicle traffic lanes on major routes to accommodate wider bicycle lanes that frequently start somewhere and end nowhere.

This social experiment has cost millions at the expense of ignoring badly needed infrastructure repair and replacement. The city staff recently stated the cost to carry out necessary infrastructure needs was more than $400 million.

There are a number of bus pull-offs that could allow buses to pull off the main road to load and unload patrons. These pull off inserts would halt the stopping of all vehicles when a bus must stay on the road to allow passengers to load or unload. Costly? Yes, but a necessary accommodation for traffic to move without delays.

We need the system but not at this price. It is difficult to understand why buses are running routes mostly empty daily, particularly in the summer months. In my opinion, indicates that Guelph Transit needs to do a serious rethink of its task based on total city usage by residents and the students.

 

 

 

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Why the 2018 budget is so important for Guelph’s future

By Gerry Barker

August 28, 2017

Let’s start by saying there are many smart people who run our city.

The problem is that the political ruling class – the council gang of seven progressives – has dominated and controlled public business for more than 10 years.

Under the leadership of former Mayor Karen Farbridge, grandiose schemes and social engineering policies have brought the city to a state of a serious financial condition. Not the least of which is the $163 million loss made by Guelph Municipal Holdings Inc. (GMHI) and its impact on Guelph Hydro.

This loss was verified in the Consolidated GMHI balance sheet audited by the KPMG accounting firm, completed last December.

Part of the $163 million GMHI losses are two debentures issued by “investors” to fund an ambitious plan to build two large natural gas generating plants to achieve electricity self-sufficiency for the city. Although GMHI purchased land to build these plants, the corporation collapsed. Because GMHI is wholly owned by the city, these debentures have been transferred to Guelph Hydro that now has a $94 million debt on its books.

There is little disposable cash available to meet the growing demands of the city. Assessment is only increasing at a rate of 1.5 per cent per year. Taxes are increasing exponentially at an average rate of 3.6 per cent per year. The city has one of the highest per capita debt rates in the entire country.

Spending remains out of control as major projects initiated by the Farbridge council have failed to meet budgets or acceptable performance. The detailed comparison of City of Guelph operating and capital spending budgets is telling. The 2015 report by Guelph resident Pat Fung, CA, CPA, compared Kitchener and Cambridge showing both those cities’ matching budgets were 50 per cent lower than Guelph’s.

There are fundamental reasons why this disparity of these two similar-sized city’s overhead and operating costs are substantially lower on a per capita basis. And yet Mr. Fung was mocked by a number of councillors after he left the chamber following his presentation. And that report was made before the GMHI audit revealed the complete failure of the former two administrations to force citizens to trust their judgment. Maybe that’s why for four years the GMHI board of directors dodged public scrutiny by holding its meeting in closed session.

The GMHI board operated like mushrooms, growing in the dark.

The GMHI board was chiefly composed of the former mayor as chair and four of her council supporters who controlled the operation. Two of those councillors are still on council, June Hofland and Karl Wettstein. Neither has disclosed any of the details of the GMHI collapse in which they were a party.

The overspending marches on. Mayor Cam Guthrie ran on the promise to match property tax increases with the Consumer Price Index. His promise was defeated in the first two months of his election by the Gang of Seven councillors who were supporters of the former mayor.

But he has accomplished some important achievements the greatest being exposing the failed GMHI Community Energy Initiative (CEI) founded in 2007 by the former mayor.

The CEI was the basis of the attempt by the former mayor to make Guelph energy self-sufficient. It was matched with a system of thermal underground co-generation piping to supply hot and cold water to a small number of buildings.

It was a colossal failure, as reports and an audit of GMHI’s operations were made public of the “initiative.” As a result, there’s a number of senior staff who left the city. Part of the reason was due to a closed session meeting of council December 10, 2015 that awarded $98,202 in salary increases to four top city executives.

Three of the four are now gone including former Chief Administrative Officer (CAO), Ann Pappert, Former Chief Financial Officer, Al Horsman, and former Deputy Administrative Officer (DCAO), Mark Amorosi. The fourth senior staffer receiving the secret increase was the current CAO Derrick Thomson.

We, the public did not discover the executive increases until March 31, 2016 when the Ontario government posted its Sunshine List of all public employees who were paid more than $100,000.

Operating a $500 million Corporation without a Chief Financial Officer

After some 28 months, the city did not have a designated CFO, although Trevor Lee has been recently hired as a DCAO taking over Mr. Amorosi’s responsibilities that includes the finance department.

The policy of constantly increasing property taxes approved last December included an extra two per cent tax levy on all city properties above the normal tax increase. Those funds were to be applied to infrastructure repairs and maintenance and city buildings. For the past ten years the increases have averaged 3.6 per cent. The exponential growth of these annual increases has created a cash box of money to fund the failed projects of the former mayor and her supporters.

Starting next month, the 2018 budget process will start. Already the staff is preparing its recommendations to council. The staff report will be the basis for discussion and provide for public input.

To say it will be the most important budget since 2007 is an understatement. Because it will occur in an election year, expect some goodies and a possible lower property tax. That’s what happened in 2010 and 2014. It’s called political survival and is the final opportunity by the 13 members of council to ensure their re-election. Or, at least that’s the theory.

I believe that it’s time for political courage and council should take the necessary steps to reduce the operating overhead of operating the city.

So, what are the choices?

There has been a fairly high turnover of staff since 2014. The biggest expense the city has is the cost of its 2,200 employees. It would be a good first step to freeze hiring for six months giving managers time to reconcile their operation to reduce costs. A real staff reduction goal of five per cent is achievable in all areas of operations. Cost reductions lies not just in numbers of employees but also in reform of operational procedures.

Hanging out there is the potential sale or merge of Guelph Hydro with another Local Distribution Company currently underway by the Strategic Options Committee. It is co-chaired by CAO Derrick Thomson and Guelph Hydro Chair, Jane Armstrong. Nine years ago, the former mayor attempted to persuade her colleagues to merge Guelph Hydro with utilities from Hamilton and St. Catharines. It was a bad idea then and it still is.

The public revolted and council voted the proposal down. In my opinion I do not believe anything has changed insofar as the current public rejection of a similar proposal. Again, the Mayor is in favour of selling the utility with current assets stated as $228 million. I see this proposed sale as a band-aid to fix a major financial problem.

Experience has shown that once council has money on the table it will disappear down the rabbit hole of personal agenda and schemes. It is impossible to repair the financial damages caused by previous administrations with an open cheque for selling an important and vital utility that pays an annual dividend to the city.

Reform city council by reducing the number of councillors to nine from 13

Another choice facing the electorate is reformation of council in the individual ward elections in which the progressives have controlled for almost 11 years. It’s a lousy system that requires amendments to make it more democratic and effective. By that I suggest reducing the number of councillors to nine, one from each ward and three councillors including the Mayor who are elected at large across the city. The present council will never agree to that, Instead the change should be included in the 2018 ballot and let the citizens decide.

Another choice that voters have is to prevent any future mayor or member of council to integrate Guelph Hydro with city operations. This is what happened with the integration of Guelph Hydro with GMHI. The mayor achieved control of Guelph Hydro that created her unwarranted full control of the financial disaster of GMHI. It must never happen again and only the voters can prevent it in the next civic election. Accordingly, we citizens should demand the cancelling the Community Energy Initiative and a wind-up of GMHI.

To assist citizens in making this happen, I suggest that Guelph Hydro dump the present appointed board of directors as of October 2018 and replace it with five elected Hydro commissioners who would elect their own chairperson.

Maintain an operational firewall between Guelph Hydro and city council

It is now essential that there must be a firewall between Guelph Hydro and its owner, the City of Guelph. The recent experience of GMHI that created long-term losses should be a grim reminder that control of Guelph Hydro should never be used again to perpetuate the will of any mayor or member of council.

Well folks, next year will be a game changer if citizens act to not only vote but also let their representatives know how they feel about the future of the city.

The greatest challenge is to seek out and persuade candidates who are prepared to be game changers to return truth to power and to the people.

Guelph Speaks will continue to report and comment on events as they unfold. Mind you, at times it feels lonely in the weird world of local media with the exception of the online paper, Guelph Today. It often produces real news stories and not the usual Pablum of rewritten city press releases instead of challenging or investigating the real issues that affect us all.

Good government is based on a system of checks and balances. In Guelph there is an absence of this because our elected representatives rarely challenge staff recommendations. Failure lies in all the closed-session meetings in which the public’s business is discussed in private often with the staff. It happens before every meeting of council and often during a council meeting.

In my opinion, the $98,202 payment to four senior managers authorized by council, in closed-session, December 10th 2015, was an affront to the public but also to members of staff. The fact that the citizens did not know of the action until the provincial Sunshine List was published four months later, only made the barn smell worse. It’s called lying by omission. And council still refuses to accept responsibility, or allow release of the minutes.

It’s something to recall in the next civic election.

Remember that all this occurred before the citizens knew about the $163 million GMHI fiasco and the losses of public money. In reality, this makes the 2014 Urbacon lawsuit that was part of the $23 million cost overrun of the new city hall, look like penny ante.

Just remember that both these projects were planned and executed by the former mayor and her elected supporters. Seven of those supporters are members of the current council.

Let’s not forget.

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Shared Economy: Another incomprehensible project we are expected to accept

By Gerry Barker

August 17, 2017

This week the city sent a press release about “navigating the shared economy.”

It was long on jargon and these was a pathetic explanation by Mayor Cam Guthrie.

“I’m proud of the leading role Guelph has played in creating a tool that will help local councils and communities analyze the impact of various sharing economy services on their own residents and businesses so they can make decisions based on local needs.”

Some clarity please, Mr. Mayor. What kind of tool are you talking about? How will it help the cost of services to the citizens specifically, what are you talking about?

Perhaps Chief Administrative Officer Derrick Thomson can explain it: “Sharing economy initiatives are being shaped by zoning codes, hotel and taxi licensing regulations, transit and all manner of distinctly local policy. The Shared Economy guide is designed to help municipalities understand this new economy, what it means on a local level and how to respond appropriately.”

Does this Shared Economy include include tighter financial control of operating overhead and capital budgets? Particularly, in view of the huge losses incurred by the city management such as the $163 million wasted on the failed Guelph Municipal Holdings Inc? Part of that has been parked on the Guelph Hydro financial statement as a $94 million debt. The balance of the loss is the shareholder’s (all citizens) equity of some $67 million spent on a variety of projects, most of which were authorized and executed in closed-session meetings between 2011 and 2015.

Was this a shared economy issue?

This week the Association of Municipalities of Ontario (AMO) is meeting in Ottawa. The Guelph delegation composed of some councillors, led by Mayor Guthrie, has joined in support of a recommendation to the provincial government to raise the Ontario portion of the sales tax by one per cent taking the HST to 14 per cent.

The Ontario government rejected the proposal a few hours after the presentation. What were the municipal representatives thinking? Did they believe that the Wynne Liberals would approve increasing the HST before a provincial election June 7, 2018?

First, the provincial government funds the AMO. That gives it power to accept or reject proposals.

Second, excessive spending of the public’s money are the problems facing the 445 Ontario municipalities. Chiefly, in most cases it is repairing and replacing neglected infrastructure. A Guelph staff report pegs the cost of infrastructure in the city at more that $400 million.

In many cases it’s about cash management particularly, revenue from property taxes and user fees. In Guelph, there has been endemic abuse of boosting revenues from those sources to pay for misadventures in environmental projects with no return.

In most homes and businesses, revenues must balance spending. The use of credit to invest in necessary lifestyle issues such as emergencies, operating costs and capital projects, is practised in more than 90 per cent of property owners and businesses.

The corporation of the city of Guelph is no different. It is obligated by the province to supply a Financial Information Report (FIR) annually with no deficit.

What has occurred over the past ten years is that the budget forecasts have been exceeded because of overspending. It is an annual occurrence. The city does have a safety net called reserves. In 2009, Coun. Leanne Piper was quoted as stating that the city had $77 million in reserves. In 2014, an outside management consultant, BMA, said those city reserves had been depleted and used to balance the city books. Their report raised a “red flag” over the reserves’ depletion.

In 2012, a citizen’s activist group, GrassRoots Guelph, presented a petition to the Minister of Municipal Affairs and Housing. The documented petition, using the city’s financial statements, presented data that showed the discrepancies in the annual FIR’s. The petition requested an audit of the city’s finances. The Minister said the two parties should get together to resolve their differences. It never happened. The former CAO, Ann Pappert, claimed it was a waste of time.

This was a fight between two pit bulls in which there was no loser except the citizen’s of Guelph.

Guelph has become the poster city for failing to control spending on projects initiated by elected officials and staff of public servants with little public input.

For the past 10 city budgets, starting in 2007 until 2017, property taxes have increased annually by an average of 3.6 per cent. This has resulted in an exponential increase of some 45 per cent.. Now we are about to begin the 2018 budget negotiations spurred by staff recommendations.

Keep in mind this is an election-year budget so there will be debate about revenue and expenses. The council will end up approving budgets designed to please the electorate and lull us into believing all is well.

Instead, citizens are being fed another new management plan called the “Sharing Economy.”

Here is a capsule of the city press release’s explanation:

“The Guide provides a brief introduction to the sharing economy and then identifies the following six decisions to guide municipalities that are anticipating or reacting to a shared economy platform in their jurisdiction.

Ulp! Why is Guelph the instigator of this?

  • What type of approach is most appropriate?
  • Answer: Control spending and control of revenues is limited. That well has drained. Change the composition of city council. Reduce the number of councillors to nine from 13. Elect a single full-time councillor in each ward. Elect at large the Mayor, Deputy Mayor and an executive councillor with the key responsibility of overseeing city finances.
  • What are the primary public policy goals?
  • Answer: Fix the assets that are broken or are redundant. Stop buying the people with their own money such as the Well-Being handouts and miscellaneous city supported community projects.
  • What type(s) of sharing will be included?
  • Answer: Managing a city is not rocket science. We elect people presumed to be aware and competent and professional staff to manage the city.
  • What kinds of policy actions or tools are needed?
  • Answer: Control spending on consultants. Reduce staff and overhead costs. Work on developing growth in the manufacturing area to increase assessment and reduce the dependence on residential assessed properties. This will also provide jobs outside of the public sector.
  • Design considerations
  • Answer: The city council must enact considerations based on facts supplied by the professional staff. There must be a clear division between elected and professional officials to provide a system of checks and balances. In Guelph, there has been a serious lack of financial management and policies.
  • Implementation and evaluation
  • Answer: Most people in the city feel that there has been too much money spent on failed mismanaged projects. This is one program that should have full public input.

The Guide was commissioned by the Large Urban Mayors’ Caucus of Ontario, financially supported by the Province of Ontario and developed in collaboration with the Guelph Lab—a partnership between the City of Guelph and the University of Guelph.

A variety of other partners including the Guelph Chamber of Commerce and the municipalities of London and Mississauga contributed to the Guide.

We should be wary of this proposal, as we have just experienced a similar collaprative venture known as the Community Energy Initiative. It is important that we solve the immediate problems facing the city before launching into an academic exercise that may distract us from what’s needed today.

Too much money has already been wasted; it’s time to stop the bleeding.

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