Tag Archives: Mayor Cam Guthrie

Nothing nefarious or backhanded here Guelph Mayor Cam Guthrie tells concerned citizens

By Gerry Barker

October 10, 2019

Opinion

When bad stuff hits the fan, it’s time to pull the plug.

That’s what our Mayor Cam Guthrie did Monday night during a council meeting. He said he was sick and tired of the ‘continuing narrative’ of his administration’s operations and citizens’ concerns of ‘demising democracy’ in Guelph.

One report said the mayor ‘bristled’ over his description of the ‘continuing narrative’ that he sees as criticism of his administration. Now this is a Mayor who is known for easily becoming angry over something he didn’t like. In his case ‘bristling’ is an understatement.

I know from personal experience dealing with the man.

And guelphspeaks has been a constant critic of the mayor and his council so I presume we are included in the bad stuff hitting the fan.

The subject of the meeting concerned public access to the 20 public advisory committees appointed by council. Leading that delegation was civic activist, Susan Watson. I generally haven’t agreed with Ms. Watson over the years but she is right in asking council to allow public access to the public advisory committees.

Guelphspeaks.ca has been complaining since 2013 about the use of closed-session council meetings that deny the right of the public to be informed and able to express opinions in the public’s interest.

I know that when I requested a copy of the closed-session minutes of that December 10, 2015, regarding salary increases for three senior staff managers. The request was denied four months later.

I filed the request in January 2016. I was tipped off what had happened at that December 10 meeting. I was also told that council passed a bylaw, also in closed-session, that indemnified any employee and elected official who were facing a legal procedure brought by a citizen or corporation. The bylaw protected that group from legal action by the city paying their legal expenses.

I bring up the case of former Chief Building Inspector Bruce Poole who was fired because he dared to challenge the administration because some 50 city-owned building projects did not obtain building permits as required by law.

In this case, the city was his employer but did not pay his legal expenses when he sued for $1 million for wrongful dismissal. He won his case when the city Information Technology department bungled a request from Mr. Poole’s lawyer for documents pertaining to his dismissal. Instead, some 50,000 private emails were sent to the lawyer. The city settled the case withholding details of the settlement.

Was this a case of a double standard? I believe today that December meeting information was in the public interest and was co erred up.

When the 2015 Sunshine List was published in March 2016, I compared the 2014 salaries of the senior city staff with the 2015 List and it confirmed my early information that it was accurate. I proceeded to report the information, focusing on the responsibilities of the Deputy Chief Administrative Officer, Mark Amorosi.

Why him? It was because he was responsible for the Finances of the City and Human Resources. He also oversaw three other departments. If Mr. Amorosi was not involved in the decision, who was?

Instead, as a result of my reporting, he sued me for $500,000 alleging defamation. Slightly more that two months after filing the lawsuit, Mr. Amorosi was fired for cause. The sick joke was that despite his alleged incompetence, his legal expenses are still being paid by the city. That includes my wife and I.

So, when Cam Guthrie says he is sick and tired of the continuing narrative of a diminished democracy, he should consider that he was Mayor when the corporation, with its deep pockets, supported Amorosi’s lawsuit brought November 16, 2016. He was fired February 9, 2017.

This is a mayor who agreed to support Mr. Amorosi when his former Dec. 10 colleague, Chief Administrative Officer, Derrick Thomson, who said the city would continue to pay his legal expenses, fired him. That has been the case for the past two years and seven months and counting.

Sick joke number two: Amorosi testified that he agreed to leave. Even the motion judge punctured that balloon stating that three major media outlets described his dismissal as being fired.

This is a case of corporate corruption by an elected council led by a mayor who did not like what I wrote or me personally. Regardless, the council had to agree to support Amorosi except that the legal reason to do so using the indemnification byway to justify their decision.

They twisted the bylaw’s intent backwards. I did not take legal action against Amorosi, because I was forced to defend myself as the defendant.

I am not giving up because I can’t. This case is before the courts and I must pay my legal bills untold a resolution is reached.

This is not just about me. It is the ability of the City of Guelph to use public money to suppress any criticism by a citizen using the public’s money to enforce its power.

Gerry Barker is a Guelph resident and retired journalist. His 13 years writing and blogging of the City of Guelph administrations frequently exposes reports and commentary of the lack of open government, accountability and transparency.

 

 

 

 

 

 

 

 

 

 

 

 

 

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Has the stain of corruption been the city administration’s operating practice since 2007?

By Gerry Barker

October 7, 2019

Opinion

What is corruption? Is it good people behaving badly? Is it a matter of convenience to hide operations by using closed-session council meetings?

Looking back in the coverage of the city administration in the past 13 years, my bulging files are full of data including dates of publishing either in the Guelph Mercury or guelphspeaks.ca.

Well, the records shows that closed-session meetings were the product of the Farbridge administration with Chief Administrative Officer Ann Pappert, as head of the city staff and Chief Executive Officer of Guelph Municipal Holdings Inc. (GMHI) for four years.

The Mayor also served as chair of GMHI that eventually scooped up Guelph Hydro and its subsidiaries.

In my opinion, these top executive controled the epicemtre of administrative corruption.

First, it gave awat control of all the City of Guelph Corporation assets and operations. It artfully eliminated public participation.

Second, the Board of Directors of GMHI was made up of the mayor’s loyalists on city council, including Todd Dennis, Karl Wettstein, June Hofland and Lise Burcher. Not one has disclosed details of those GMHI closed-session meetings. And I am not on their Christmas List.

Conducting closed-sessions enhanced control by the GMHI Board of Directors. The only occasional press release stated in principle that GMHI had sent $1,500 to the city as a dividend each year.

The problem was that GMHI was losing bags of money so what was the source of that dividend?

Actually, the only GMHI asset making money was Guelph Hydro.

The wheels starting coming off this comingled collection of the public corporation with the defeat of Mayor Farbridge and a number of her supporters.

Cam Guthrie was elected Mayor but was stuck with a majority in council of the former mayor. They managed to be in control with seven members. What few people realized was that the progressive supporter had built a formidable political firebase throughout the city.

The Mayor oversaw some 84 closed-session meetings in his first two years in office. In 2015, CAO Ann Pappert requested that she wanted reimbursement for her unused sick days and vacation allowances. She also knew about her new salary would include a $27,000 retroactive performance bonus.

Did you know about this? Neither did I or anyone else except the staff and council insiders who kept their mouths shut.

Then in March 2016, the provincial Sunshine List was published. I was the only media outlet that compared the salaries of staff in the 2014 List with the 2015 List. The annual List reports the salaries and taxable benefits of every provincial public service employee earning more than $100,000 in the previous year.

The three senior managers, Ann Papper, Mark Amorosi and Derrick Thomson share increases totaling $98,202. That figure was never confirmed or denied.

As the lone wolf in this, I wrote a number of blogs that were critical of Mr. Amorosi who was the Deputy Chief Administrative Officer in charge and responsible for Finance, Human Resources, Information Technology, Special Projects and Court Services.

If anyone should know about the salary increases it should be him, right?

On Novembers 16, 2016, I was served with a charge of defamation of Mark Amorosi. On February 9, 2017, Amorosi was fired for cause by his colleague Derrick Thomson who replaced Ann Pappert as CAO. Thomson went out of his was to say the dismissal had no affect on the city-financed legal fees of the departed Amorosi.

To be clear, I had nothing to do with his firing. His evidence presented to the court was that he agreed to leave his job. His counsel said that in two years he applied for four jobs and never obtained an interview. He was listed on LinkedIn as a retired civic manager listing his experience in Guelph.

In my opinion, no matter how you slice it, the city by agreeing to pay his legal bills is complicit in this vigorous personal attack on my wife and me just because I wrote the truth in words they didn’t like.

The senior manager receiving a share of that $98,202 remununeration boost for 2015, are all gone.

So much for checks and balances of the public’s interest.

 

 

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Along came a spider who sat down beside her and said, “what a nice new Library you may have”

By Gerry Barker

September 26, 2019

Opinion

This is one of the great myths of our lives. In 2004 during Mayor Farbridge’s first term in office, council debated whether to replace the downtown Library with a new one. The Library had outgrown its capacity to serve a growing population.

It sparked the growth of satellite branches and a bookmobile.

The Library lobby continued to campaign annually asking council to approve building a new facility to meet the needs of the present and future. The first proposal was to build a 93,000 square foot main branch Library downtown on the Baker Street Parking lot.

At the time, it was obvious that council was engaged in building a new city hall and renovating the old hall into a provincial offences court. This major project turned out to be a six-year financial disaster completes with a major wrongful dismissal lawsuit by the general contractor and a $65 million dollar bill.

The Library project went to the bottom of the capital-spending budget.

That was followed with the $66 million loss of shareholder’s investment in the Guelph Municipal Holdings Inc district energy project. This was launched in 2011, during the same time frame of the city hall lawsuits. There were five different interests suing, including each other. Urbacon Buildings Group Inc. suing the city for $19.2 million brought the main one. The city counter-sued for $5 million.

It was a three-ring circus of flying legal briefs and claims.

It was the dark period of the city administration amid the Library project, which bubbled beneath council’s primary interests.

The new Mayor, Cam Guthrie, announced that a private public partnership was being assembled to renovate the Baker Street site that staff primarily would cost the city $300 million. The plan called for a combination of commercial and residential complex. Included in the Mayor’s statement was that the proposed 88,000 square foot downtown Library would be the anchor on the site.

The timing was perfect as the Mayor decided to run for re-election and spoke highly of the Library project. He was re-elected.

Earlier this year, it was announced that the Baker Street proposal was being scaled back due to costs and would not include the Library.

Council shows restraint in capping 2019 capital budget

This past January 17, city council approved a 2019 capital spending budget of $87,370,100. Almost half of that budget was slated for wastewater and two new wells to accommodate future development.

Of the nine projects in the staff recommendation, absent was the new downtown Library. You remember, the one Mayor Guthrie announced in 2018 before the civic election.

Here we are in September, and the same members of council agree to add $44 million in debt to partially fund a new downtown Library to an estimated cost of $67 million. The reports say that the begging bowl is out to get a $36.6 million grant for the Library from the federal government depending on which party wins the October 21 election.

Is this a promise to be broken?

This form of financial brinksmanship is an enduring fixation by the majority bloc of city council that has stalled funding library for the past 13 years by diverting funds for other projects.

It remains today to be a malignant history of exceeding budgets, using reserves to balance the books, wasting public funds in sketchy decisions and planning, conducting public business in closed-sessions with no public participation. Ignoring its own protocols for open government, accountability and transparency.

This was not another Guthrie example of selling the sizzle, not the steak. He was one of four councillors who voted against the proposal. The mayor had his reasons but if he was not aware of the details of the project, or perhaps he was. There seems to be a lack of fiduciary judgment by the nine councillors who voted to spend $67 million on a project that was not part of the 2019 capital budget.

Regardless, Monday, September 16, council approved spending $67 million to build a new 88,000 square foot downtown Library. Coun. Dominique O’Rourke initially objected, stating that without all the information pertaining to the proposal, “It wasn’t going to happen.”

Later she relented and voted to spend the money.

To assist those members of council who voted for the Library, here are some of the missing details to support the project that will cost more than twice that of the new renovated police headquarters.

* Has a site for the new Library been chosen, where and the cost?

* What is the acreage of the site to accommodate adequate parking?

* What’s the estimated time of construction and the start-up date?

* When does the special Library levy to taxpayers kick in?

* In 23 years what is the total cost to property owners paying the Library levy?

* Is this levy fixed or will it increase as property taxes increase over 23 years?

* Is the financing in place and approved to justify the $67 million in capital approved?

* Has a business plan been prepared that separates the construction costs from the equipment required?

* Is the present library going to be sold with proceeds going to new Library costs?

* Has an architect been commissioned to design the new Library and monitor construction?

* Has a Request for Proposal been prepared to establish construction costs?

* What does this decision do to completing the $63 million South End Recreation complex?

* How can council approve funding the Library when it is not in the current capital spending budget?

* If this is council’s intention, where will it find the $67 million it has now approved and added to the 2019 capital spnding budget?

*         *         *         *

The only possible explanation is the costs will be spread over five or six years during the time frame of completing the project. If this is the case, why didn’t council tell the public of this method that is logical and potentially manageable?

Quite frankly, this is another crapshoot by an administration that by now should have learned better handling public money.

If any of these questions have not been reviewed by staff and reported to council, how can a motion to spend $67 million succeed by a 9-4 majority without the answers?

I believe we need a new main branch Library to meet the needs of our growing city?

However, the people need a specific plan and the costs. The staff report says that $44 million is being added to the city debt.

The remaining details are not confirmed including a request to the federal government for a $36,6 million grant. The outcome of that grant request is unknown today because there is no federal government because Parliament has been prorogued until after the election.

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Why Democracy has left the building and we are the less for it

By Gerry Barker

September 3, 2019

Opinion

When the underlying issues of a civilized society are endangered by a dictatorial and secretive administration, democracy, as we know it, vanishes.

It’s a natural instinct for those in power to withhold information that may reflect on their actions and management of the public assets.

Once in power the tendency is to surround you with friends and supporters who blindly follow.

One of the first tenants of political power is to control the message and give the appearance of serving the public stakeholders. Those controlling the agenda ignore disagreement and rejection of the controlling political organization’s policies.

This leads to anger and disillusionment on the part of the stakeholder, you and me.

So, thanks to a report by Carol Goar, a senior writer and columnist in the Toronto Star, some years ago that are even more important today. Here are three lessons to emphasize the theory of democracy discarded by those empowered.

* Lesson One: “Those with power – politicians, police and bureaucrats – don’t believe they should have to share that power. Basically, they dismiss the rights of citizens to share that power and don’t believe they have any role to play in their sphere of influence.

* Lesson Two: “Governments frequently slap pejorative labels on those who oppose and complain. Such methods are to use surrogates to attack those objectors labeling them as ignorant, dangerous, violent and out of touch.

* Lesson Three: “Citizens have to use the tools they have to keep democracy alive. These include solidarity, willingness to stand up to authorities and to reach beyond their own ranks.”

How do those lessons in maintaining democracy rank with what has been going on in Guelph for the past 13 years?

First, we have been governed by a civic dictatorship composed of a majority of councillors who, 99 per cent of the time, vote collectively their own agenda. The opposition – in the first four years consisted of just two councillors. Since 2010, the opposition has grown to five councillors who have voiced concerns about the operation of the city government but are defeated most times when votes are held

There is evidence that former mayor Karen Farbridge, the architect of Guelph’s public policy, along with a close-knit group of unelected advisors, created unrest among voters.

Democracy is no longer operative in this council. The results of the 2018 civic election only exacerbated the lack of public participation, transparency and open government.

The use of closed=session meetings has drained accountability to which the stakeholders are entitled.

It has become so pervasive that despite the absence of the four senior city managers between 2016 and 2019, little has changed in terms of controlling the operational details to the public

The administration works in two parts. The mayor and a majority of city council carry out the agenda and handpicked the senior bureaucrats. Policy rests with the mayor and his advisors.

It has beeb\n five years sunce the Farbridge elected supporters have influenced and received support from a number of community and neighbourhood groups supplying public funding, support in planning and social issues.

The offshoot of all this is the vast silent majority of voters who are not united, knowledgeable nor organized to question or oppose policies advanced by the city administration.

This has resulted in a perverted, participatory democracy failing to acknowledge the needs, will/ and interests, of the people.

Once again, here is Lesson Two: “Governments frequently slap pejorative labels on those who oppose and complain. Such methods are to use surrogates to attack those objectors labeling them as ignorant, dangerous, violent and out of touch.

I am one citizen who has felt the wrath of the Guthrie administration that has supported a dismissed employee who sues me for $500,000 for defamation by paying all his legal fees since August 2016.

I have had to spend a great deal of money to defend myself. And it’s not over yet.

This lawsuit seems to strech the meaning of “pejorative” describing the action of the City of Guelph government.

Still not convinced?

The ambition of this group has cost taxpayers millions in failed personal pet projects, dumb planning, excessive legal expenses and fiscal mismanagement aided and abetted by unqualified or now absent individuals,

those no longer responsible for maintaining the public interest.

Mayor Guthrie, democracy has left your building.

 

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It only took 13 years to change Guelph politically, culturally and economically

By Gerry Barker

August 22, 2019

Opinion

Part Seven of Seven

Experiencing the ebbing of summer as it morphs into fall, I reflect on the forces and political events that in the past 13 years have changed Guelph forever.

The city has changed as the demographics have changed. Many new people have moved to this city touched by gentle rivers, lush parks and being a preeminent home to the new Canada, one of diversity, tolerance and peace.

With that statement of idealism comes the downside of transferring a beautiful city to meet the challenges of a changing planet, separate of the demographic between the young and old and the handmaiden of authoritarian civic rule.

The outcome has been a mixed bag of modernization, coupled with a rigid cultural shift that transferred political power to an efficient majority of progressive believers in change at any cost.

It has been incredibly uncomfortable in this period of dominant control of our civic affairs, pegged to some 16 years of Liberal-dominated provincial governments. In fairness, some of the mistakes in wasted capital were made in Guelph by the administration of dream catchers.

If you have been following this series, you have read the details of the high cost of change driven by a council and senior staff to turn the city, they said many times over, into a world class municipality of unparalleled elimination of fossil-fueled vehicles, alternative transportation (bicycles), reduction of waste, developing self sufficiency in sourcing clean power.

At the time, these efforts were appealing to the council supporters, including the labour unions, employee associations, the University of Guelph and Conestoga Community College, plus the two Liberal governments at Queen’s Park.

The previous six parts of this blog have detailed, in my observation and opinion, a dismal record of misuse of power and personal ambition lust to alter a way of life.

New housing did not include detached homes

The type of housing in the city changed dramatically almost overnight. The virtual elimination of detached single- strip attached homes incorporated in low-rise condominium development. It was the urging of the Wynne Liberal provincial government to create the intensification developments to discourage detached single-family home sprawl.

Unfortunately, the costs of servicing these new developments soared as the city’s operational overhead costs increased with each new proposal.

City council adopted the intensification proposal mainly because it had a higher return of property tax than the detached home developments.

Many viewers reading the series of blog posts for whatever reasons, may sneer, some will dismiss me as an ”irritant,” I call others the Monday regulars, those who appreciate my reporting and analysis. Then there are the readers on Twitter and Facebook where the blog material is regularly posted.

In my opinion, Guelph is still a small town and managed accordingly. On the ground, we have the size of a city but are controlled by ward councillors who have been in charge for 13 years. I call it parish pomp politics run chiefly by a part-time council.

There remain important issues to be resolved. Some are the result of a transformation of society. Many are neglected and need action with the most important being the city’s aging infrastructure.

Past mistakes are hard to fix and expensive. If we have learned anything, we need much closer public participation, a new reduced full-time city council elected at large, and nine would be a good number.

Instead of the dated Community Energy Innovation plan, circa 2007, lets study the new jobs that the future will demand. The shift in information collection and delivery has seen the loss of print media including newspapers, snail mail, call centres, transportation, healthcare and delivery of cyber services.

Like it or not, the transformation of our society is bringing rapid changes. Manufacturing jobs are shrinking with the advancement of robot technology that is pervasively replacing workers. This issue will hit Guelph’s manufacturing companies who will have little choice but to lay off employees due to robots taking over.

You know, robots don’t pay taxes, do not participate in the community, don’t drive cars, don’t get emotional and have one line of repetitive thinking. This will seriously impact the future basis of determining business taxes in the city.

Guelph’s drug crisis that is deadly and growing

A comment from a reader described Guelph as the Meth (amphetamine) capital of Canada and the downtown area was awash with needles. Is that an exaggeration? Will legalized distribution of pot change this dangerous opiod growing epidemic? Don’t bet on it.

My experience living in Guelph, is I believe that use of illegal drugs in our city has been a long-term problem. It is one that can be controlled but will never disappear even with the advent of recreational pot.

Guelph police have focused on the dealers of these drugs including the arrival of the powerful opiod fentynal

Several things need to happen: Enforcement of choking off the supply and distribution. That includes drug wholesalers, pharmacists, physicians and illegal drug dealers. This campaign will be costly and take time. It’s time city council stops denying and providing the resources to halt this scourge that is not unique to Guelph. Regardless the drug supply and culture in the city lays the groundwork for very serious consequences.

Dealers and users should be arrested and dealt sever penalties if found guilty. No more releases of accused druggies on their own recognecense, provide the resources for more law enforcement, the courts and the professional organizations whose members may be part of the distribution of illegal drugs.

This is the time to set aside the capital projects such as the proposed Baker Street $350 Million project, the Guelph Innovated District planned purchase, the South End Recreation Complex, all bike lane expansion and climate change and other environmental and Innovation projects.

The focus must turn on the transformation issues now affecting our immediate future. Council has a lot of work to do to meet the new direction of society including public health.

I am in the December of my years but my one regret is that I will not be around to witness and participate in the real changes that are at the doorstep of civilization.

Where do Guelph citizens figure in all this?

I am positive that if the administration is reduced and keeps the public informed regularly, allows online voting and attracts representatives with experience and qualifications, and pays them well as full-time councillors. I am confident if this occurs, Guelph will become more than just another pinpoint dot on the atlas of Canada.

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Was city council duped giving away the $228 million Guelph Hydro to solve the GMHI losses?

By Gerry Barker

August 16, 2019

Opinion

Part Six of Seven

It began in the fall of 2016 when city council formed the Strategies and Options Committee (SOC) to select the best way to dispose of Guelph Hydro and its substatial assets. That ibcludes a guaranteed customer base of some 55,000 who pay thrie account mpnthly.

This committee was asked to examine all options including merger with other utilities, sell Guelph Hydro or keep it as a profitable and effoicient city-owned corporation. Seems the latter choice is logical and straight forward.

The SOC was composed of the following: Co-chairs Derrick Thomson and jane Armstrong, Robert Bell, co-chair of GHESI and Mark Goldberg. It is assumed that at a closed-session of city cou ncil, June 9, 2017, that Ron Clark, solicitor of Aird and Berlis, was representing GMHI. In fact, he attended a number of those closed meerings according to city records. The one missing link is when Mr. Clark was appointed solicitor for GMHI.

When council approved the merger, Mr. Clark made a presentation that gave the impression that he was representing Alectra, or at the least supporting the SOC merger proposal.

So, why were the meetings of the SOC and liaison with cuty council conducted in closed-sessions?

Well, a lot did happen between the fall of 2016 and February 2017 whenthe SOC recommended to city council that the option of selling Guelph Hydro be withdrawn. In short, no longer considered. Council voted 7-5 to not sell Guelph Hydro.

We now know what happened. On December 13, 2017, council voted 10-3 to merge with Alectra Utilities. What motivated those ten elected councillors to agree to the merger? Further, Mr. Clark advised council that the agreement was not finalizeds and it would take a few months to complete.

Why did council rush to approve the agreement? Reading on that irgency will be revealed.

Let’s backtrack to why Guelph Municipal Holdings Inc., for more than four years, under the leadership of Mayor Karen Farbridge, was also chair of GMHI? Her Chief Administrative Officer, Ann Pappert, was also Chief Executive Officer of GMHI.

Under any corporate organization chart, having the two top executives controling in the same capacity, of both the City of Guelph Corporation and its corporate subsidiary, GMHI. Itwould not be tolerated. Here’s why, it’s a dangerous concentration of power in the organization..

It gave the two women carte blanche to do what ever they wanted to achieve goals without oversight or checks of balances. Thar’s not the way our municipal systems are supposed to work.

But make no mistake the Mayor was in complete control of both corporations. As it turned out it wasn’t the GMHI situation that defeated mayor Farbridge in 2014. It was the wrongful dismissal lawsuit by the general contractor of the new city hasll, Urbacon Buildings Group Inc.

That six year legal battle cost the city an additional $23 million to complete the project.

The mystery that prevails is what made the SOC recommendation to city council that the sale of Guelph Hydro be taken off the table as an option?

Was the SOC a masquerade or just following orders?

To this day there is no explanation or details of who or what influenced the SOC to recommendation removal of not selling Guelph Hydro.

It left only two alternatives, merge with another utility or continue to operate it. If that was the SOC choice it would eliminate the opportunity to help clean up the GMHI $66 million losses.

In my opinion, no bank was prepared to put up the $68.3 million considering the depth of the losses revealed in two staff reports in May and July 2016. Instead, the city loaned the money to GMHI not aware that there was no possibility of GMHI repaying the loan. This was confirmed in the GMHI consolidated audit perfotmed by the accouting firm KPMG. They described the loans as “Shareholder’s Liability.”

This placed the city administration in a bind. Because the province demands that all municipalities must ballance their books at year end, where was the city going to find $66 million before then end of 2016?

The city debt limit could not handle it. The risk managers at he banks would not touch impaired assets that was being written down. There were no GMHI profits available to service the growing debt some of which remains today and is growing.

Then, along came the strategy to sell Guelph Hydro and use thr proceeds to pay off the $66 million. In the fall, the wheels started turning when the SOC was selected to find a buyer or merge Guelph Hydro with another partner.

Merger negotiatins began in earnest in June 2017. In early October, Mayor Guthrie announce the city had signed a Memorandum of Agreement with Alectra.

So here’s the deal:

The city transfers title and assets of Guelph Hydro with a 2016 book value of $228 million to Alectra. In return, Alectra promises to establish a Green Technology centre in Guelph and the city would receive an annual dividend of 4.86 per cent of 60 per cent of Alectra utilities profits. City council appointed Jane Armstrong as Guelph’s representative on the Alectra Board of Directors.

The merger was approved by the Ontario Energy Board in 2018. The decision denied intervenor access ti the meeting despite a number of residents who requested a open meeting and the opportunity to speak.

None of us were granted that request. On January 1, 2019 the deal was completed.

There are more details of this deal that have not been revealed. Why did this merger solve the city’s GMHI problem? Did Alectra assume the $66 million losses that were financed internally by the city? Did the city recover the $2.6 million it admitted spending to sell the deal to the public?

Is it not true that Alectra promised there would no charges to the city regarding rate increases for power? Alectra recently asked the Ontario Energt Generation Board for a 5 per cent rate increase.

The city did receive $18.5 million from Guelph Hydrp’s surplus. What happened to those funds that were the property of the citizens?

Council, despite the leaking of the SOC recommending dropping the sale of Guelph Hydro, did not explain the reasons or even a summary of the SOC decision. The SOC assumed it was covered in closed-sessions protected by the Council Code of Conduct.

The Code of Conduct prevents any councilor or member of the SOC to discuss or reveal the contents of any designated closed-session meeting in which they participated.

If there is an apparent breach of the rule, the offender may be subject to dicipline as determined by the Integrity Commissioner who may suspend the offender following an investigation and fine them.

Closed-sessions are the most abused procedural rules that prevents disclosure by council or any board or committee to not discuss the content of such closed-session.

In my opinion, this suppresses information of the public’s interest that should be revealed. There are certain legitimate reasons for a closed-session including contract negotiations, real estate transactions and certain staff issues.

The fact is that in the first two years of the Guthrie administration, there were 84 closed-sessions. There was supposed to be a summary of the meeting reported after but that did not occur.

It is, in my opinion, the essence of convenient cover-up that denies public participation, accountability, transparency and open government.

This is what happens when the real shareholders of Guelph Hydro are rarely informed of the methods, reasons or, dare I say it, what happened to due diligence?

 

 

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How Guelph Municipal Holdings Inc, covered-up losses of $68.3 million

By Gerry Barker

August 5, 2019

Opinion

Part Four of Seven

Previously in Guelph Speaks:

Catch-up synopsis of the first four posts about the turbulent and financial history of the two Guelph administrations serving the city in the past 13 years.

The introduction of the seven-part series summarizes the impact on the citizens.

Part One –The birth of the Community Energy Initiative and the failure of citizens to petition for an audit of the city’s finances by the Ministry of Municipal Affairs and Housing.

Part Two – The unrealistic goals of the Community Energy Innovation plan to restrict greenhouse gases, by 50 per cent less energy per capita.

Part Three – Executive spite cost citizens $23 million more than the new City Hall contract when the general contractor, Urbacon Building Group Inc, was fired with the project 95 per cent completed.

And now, Part Four- A convenient collusion in which Guelph Municipal Holdings Inc. lost $66 million

Details of this GMHI audited financial loss of $66 million, has been surrounded with few details of why, in four years, it lost $66 million.

More importat to citizens, is what did GMHI and Guelph Hydro, do with the money?

In this part you will learn about what we do know, including the duplicate management of Mayor Karen Farbridge and Ann Pappert, Chief Administrative Officer of the Guelp. The mayor was also chair of CMHI and CAO Pappert was also Chief Executive Officer of GMHI.

That set the stage for a convenient collusion that ended with the city stuck with a debit of $66 million.

Read on for the details of this project, how it was mismanaged, conducted its business in secret and there were no checks and balances by our elected representatives. The public interest was ignored as was accountability and transparency.

Again what did GMHI and or the city do with the money over the four years?

There are three clues to what happened. First clue, in May 2016, a report to council from the GMHI management stated the holding company, owned by the city, was losing money and the business plan was not viable.

The second clue was a devastating staff report in July 2016 that declared GMHI was $68.3 million in the hole.

The third clue was the 2016 consolidated audit by the accounting firm KPMG that, among other things, stated the shareholder’s liability was $66 million.

It is calculated by a staff management’s review that GMHI has an “investment impairment” of $68.3 million. By 2017, it was estimated GMHI had lost an additional $17 million and was losing money every year. The reason was the operation of GMHI’s defunct District Energy operations that had to continue servicing customers with hot and cold water.

Double-barreled command enhanced by closed-session meetings

It didn’t help the public to understand what was going on because the GMHI Board of Director’s (BOD) meetings were conducted in closed-session as were a number of council meetings regarding GMHI.

To be blunt, the Farbridge-inspired Community Energy Innovation (CEI) an enterprise project, created in 2007, was a financial disaster with little or no hope of ever becoming remotely viable or an asset of the city and its citizens.

These projects, inspired by the CEI manifesto, impacted needed infrastructre maintenance as funding was diverted to GMHI.

Proof is that in 2017, city council approved a special one per cent levy on property owners in the 2017 budget following the 2016 KPMG audit of GMHI. The money was to be applied to infrastructure maintenance and replacement.

The CEI manifesto is still being used today as a guideline to fulfill the objectives of the environmentalists looking to change the city to conform to their principlres.

This decision by council was made following a staff report that there was a shortfall in infrastructure requirements of $400 million.

In my opinion, this levy was a ludicrous attempt to thwart public interest into believing council was doing the right thing dealing with infrastructure demands.

Some words of wisdom from someone who has been there

Back then, for the newly elected Mayor, Karen Farbridge, the comment of former U.S First Lady, Michelle Obama, at the 2012 Democratic Convention: “ Being President doesn’t change who you are. It reveals who you are.”

Becoming mayor, revealed who Ms. Farbridge was. As we subsequently learned, she was canny, comfortable in her persona, secretive and determined to change our city into her image of what it should be.

Did I mention that she was ruthless in dominating her administration?

It became the centrepiece of the CEI and reflected the vision of Mayor Farbridge.

In retrospect, we learned who Ms. Farbridge was. She became the uber boss of Guelph, serving not only as Mayor but also chair of the GMHI Board of Directors with her CAI, Ann Pappert, as Chief Executive Officer of GMHI.

A convenient collusion denied public participation

To the best of my knowledge, neither woman had any technical experience in managing large energy projects. They oversaw the GMHI energy projects that cost citizens $68.3 million as well as the corporation of the City of Guelph.

As it turned out, the city corporation was also the GMHI banker.

Their secretive complicity reminds one of the lines in the movie, Field of Dreams: “If we build it, they will come.”

Today, Guelph’s enironmental dreams linger as both Ms. Farbridge and Ms. Pappert are gone. There is no apparent benefit to the public to show for the huge investment made by the unknown “institutional investors.” These unidentified investors spent millions in the GMHI projects because they were convinced their boss, Mayor Farbridge, was in charge and knew what she was doing.

Now we know the identity of those investors.

They were the members of the Guelph city council supported by senior managers. Translation, those “unknown investors” were the citizens of Guelph represented by those city councillors they elected. It was a colossal failure by those elected representatives to assume their sworn fiduciary responsibility.

There was no public knowledge of the GMHI operations or the growing financial losses that built up for four years. The GMHI Board of Directors operated almost all the time in closed-sessions.

Nightmare at 1 Carden Street

The defeat of Mayor Farbridge in October 2014 was the start of the flood of information until May 16, 2016 when a report signed by GMHI’s CEO Pankaj Sardana. He replaced Ms. Pappert who left the administration ten days later.

There were no tag days for Ms. Pappert who was paid $263,000 for five months work according to the 2016 provincial Sunshine List published in March 2017. That amount included her 2015 performance bonus of $27,000. Wouldn’t that be called double dipping?

But why repeat the bonus in 2016 when she only worked for five months?

Council hired the accounting firm KPMG to conduct a consolidated audit of GMHI and its links to both Guelph Hydro and the city. That revealed the shareholder’s liability of $66 million.

The KPMG audit confirmed the cost of a project that was controlled by the Farbridge administration, aided and abetted by city councillors and senior staff.

Servicing the carrying costs of this investment by the city loan was estimated to carry 2 per cent interest cost. That’s $1,300,000 per year. When this is added over slightly less than three years, the debt is now stated as $68.3 million on the GMHI and city books.

Now, add in the growing annual $1,967 245 of GMHI “tax losses” of Guelph Hydro subsidiary Envida Community Corporation. You don’t have to be an accountant to figure out this was a growing serious financial disaster. It adds up to between debt-servicing and so-called tax losses, to some $3,268,245 every year.

Note: Tax losses can only be recovered when there are tax gains. GMHI never made a dime in its existence.

The arrangement of “the investors” loan to GMHI was one pocket being picked by another, with the public not knowing how their money was being played.

This was an example of municipal corruption at the highest level. It deserves a provincial inquiry to return the city to responsible management and reveal the truth.

Following the mone

The sick joke about all this is the some $10.5 million that GMHI allegedly sent to the city treasury through Guelph Hydro over a six-year period. Was it just a book entry on the GMHI balance sheet or did the cash really get transferred. How does a money-losing millions GMHI afford to send an annual dividend of $1,500,000 to the city?

That money was paid indirectly by the City of Guelph with no reduction of principal of the GMHI “investors” loan. It was the accounting merry-go-round of money between GMHO, Guelph Hydro and the city. Remember the city, that’s you and me, were the bankers.

Did Guelph Hydro, through its subsidiary, Guelph Hydro Electric Services Inc (GHESI), mortgage the city by more than $66 million due to those “institutional investors” aka city council, who provided the money?

The answer is no. The funds were advanced by the City of Guelph and approved by council. Who served on the GMHI Board of Directors? It was four loyal Farbridge councillors, Lise Burcher, June Hofland, Karl Wettstein and Todd Dennis, giving the mayor an ensured majority on city council and GMHI Board.

This resulted in blocking public accountability and transparency conducting the public’s business.

There’s a new sheriff in town

When newly elected Mayor, Cam Guthrie, took over city council he was handed a rock known as GMHI. As a member of the previous council, did he know about GMHI and its financial problems? It took a year of learning about the serious damaging details facing the GMHI financial disaster.

Yet, under his watch, city council held 42 closed-session meetings in 2015, thereby denying the public information about GMHI and its troubles. The shroud of secrecy descended barring accountability. During this period, who was his chief source about GMHI? Why it was CAO Ann Pappert.

Is it possible that Ms. Pappert sold out Karen Farbridge? Is that why council, in closed-session December 10 2015, rewarded Ms. Pappert with a $27,000 retroactive performance bonus? Was it for her work as CAO and CEO of GMHI since 2011?

Following the devastating staff report in July 2016, details of the depth of the GMHI mess became known, but not all the details. The plan to bail out of the multi-million dollar debacle was not revealed.

Any attempt to keep this failed project alive is just pushing more money down the rabbit hole, with no guarantees the city ever gets our money back or stops the bleeding of funds.

Next, Part Five: Along comes Alectra

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