August 22, 2016
My wife and I are residents of the City of Guelph. In this letter I will present facts about the nine-year administration of the city and how the citizens have been negatively affected. I am a retired newspaperman who has written extensively about the city operations and currently write a blog called guelphspeaks.ca.
In all, I have produced 804 posts on the GS blog since 2011.
To describe me as being biased is an understatement. I am politically independent but acutely aware of the betrayal of public trust that eight years of the administration under former mayor Karen Farbridge created. Working with hundreds of citizens in 2013/14, we managed to defeat the mayor and four of her council supporters.
But nothing has really changed. Seven councillors loyal to the defeated mayor are in control of the present council of 13. This Bloc of Seven are supported by a diminished senior staff including the CAO Ann Pappert, resigned in May; DCAO Al Horsman resigned last August to accept a job as CAO of Sault Ste Marie. Only two senior staff remain who were part of the previous administration. Both are in key positions to manage the staff of 2,100.
Cutting to the chase. Who is managing the store?
Here are the facts of a city that is in disarray about the increasing financial mismanagement as there have been seven individuals heading the finance department since 2016. These include David Kenney, Margaret Neubaur, Mark Chapman, Susan Aram, Barbara Powell, Janice Sheehy and Mark Amorosi.
Currently, the position of Chief Financial Officer has been vacant for 19 months. Since November 2014, two individuals were named as general managers of finance and treasurer and the most recent appointee left last March. The DCAO responsible for finances since November 2014, is Mark Amorosi, despite a search for a CFO by a headhunter. He appointed a junior analyst in the finance department as the new CFO. She is currently on maternity leave and will not be available until next year.
The former CAO, Ann Pappert, was responsible for the city staff preparing budgets and ensuring the city’s books were balanced by December 31 as required by provincial law. Every year for five years, there were negative variances near year-end because the budget was overspent. The books were balanced using funds from the reserves.
This resulted in a serious reduction in the many reserves that had been used to balance the books. An independent consultant warned the administration of this situation and described it by raising a “red flag.”
Spending $16.5 million on someone else’s property
The newly elected Councillor Leanne Piper, a former head of the Guelph Heritage Group, initiated the civic museum project in 2007 with council approval. Four years later, the cost had increased by $3 million to more than $16 million. She insisted that the building, a pre-Confederation convent located on property owned by the Roman Catholic diocese of Hamilton, be preserved. The original staff estimate was $12.7 million. Together Provincial and Federal governments gave $6 million. There was protest that the money was being spent on property not owned by the city. Details of the lease arrangement were never reported. The bill for landscaping the building was more than $1 million in 2013.
Paying its share of the 2009 Infrastructure program
The Farbridge administration called the Guelph Hydro note due to the city, to pay for its share of the 2009 provincial/federal infrastructure program costing $22 million. The administration spent an additional $7 million on various projects such as a $75,000 time clock in the Sleeman Centre replacing one that was working perfectly. Another $2 million was spent on Stone Road bicycle lanes.
If you build it, they will come
The organic waste composting facility that was overbuilt in 2011 cost $34 million. This plant was approved to process 30,000 tonnes of wet feedstock per year. The total tonnage of such material from the city each year was less than a third of that capacity. The plant is manned and managed by a subsidiary company of the contractor, Maple Reinders, known as Aim Environmental. The finished composted material is sold to unknown clients. None is offered to citizens who financed the facility. The city refuses to reveal the details of the contract to protect the proprietary interests of the private operator of the plant.
The bin waste collection system that misses 13 per cent of the population
Without public input, the city imposed a $15.5 million waste collection cart system that cannot service some 6,000 condo residences. The automated trucks cannot maneuvre in the new, programmed intensification residences with small yards for bin storage, narrow roads or access. These condo HOA residents must hire private contractors to remove their waste with much of it going straight to the landfill.
The Community Energy Initiative that failed
The formation of the Guelph Municipal Holdings Inc (GMHI) by the Far bridge administration included amalgamating Guelph Hydro with GMHI. It was only recently discovered that Envida Community Energy Inc., a subsidiary of Guelph Hydro, spent $8.7 million on a District Energy program. The plan included an underground co-generation pipeline network supplying hot and cold water to some nearby downtown buildings and three businesses in the Hanlon Creek Business Park. This initiative had no benefit to the majority of Guelph residents. It was another example of controlling, far left agenda, to achieve energy and environmental goals that rightfully were the responsibility of senior governments.
Instead, the administration used municipal revenues and credit to pursue an unwanted agenda. The result was neglect of infrastructure maintenance of a 200-year city. For its 2017 budget, the staff is proposing a 2 per cent special property tax levy for ten years to pay for the eight–year neglect of infrastructure maintenance. Combined with the increase in assessments, this will have the effect of driving property taxes to more than five per cent annually for ten years, not accounting for the impact of inflation.
Minister, This entire Community Energy Initiative was planned and executed in closed sessions of GMHI that were chaired by Mayor Farbridge with four of her councillors, two independents and the CEO of Guelph Hydro. The costs of this enterprise are more that $37.1 million. It was all conducted beyond public scrutiny for four years. Until council was told May 16 this year about the failure of the business plan and associated costs, the people were left in the dark. Both GMHI and Envida corporations have no financial capacity. The City of Guelph is holding an impaired investment of $68 million that is rapidly decreasing as an asset on the city books.
The CEO/CFO of GMHI, told council, representing the shareholders, that an additional $60 million will be required to continue the Community Energy Initiative. Regardless, the council majority group voted to keep the system going until the first quarter of 2017.
The high cost of waste management
The Waste Management Innovation Centre has cost an estimated $10 million to process recyclable materials, non-compostable organic materials, waste for the landfill etc. The deal with the Region of Waterloo to process 10,000 tonnes of wet feedstock at less than cost to the organic plant failed to provide the volume agreed to but the Region still had to pay.
There was an un-documented deal with the Rizzo Brothers waste management company in Detroit, to ship and process recyclable materials to Guelph. The deal fell apart when Detroit supplied materials that failed to meet the standard of condition had to be retured or sent to the landfill. The internal audit showed the loss exceeded $500,000. The manager responsible left the city.
The city hall construction lawsuit
The lawsuit by Urbacon Buildings Group Inc. against the city, was for breach of contract involving the construction of the new city hall and renovation of the former city hall into a provincial court. The original $42 million contract, signed in 2006, was exceeded by $23 million in 2015. The city terminated the contract in September 2008 and ordered the Urbacon staff and subcontractors off the site. Justice Donald MacKenzie found the city in breach of contract in April 2014 and ordered costs to be determined by the parties by October. The city attempted to delay that order until after the election and failed. The city settled with Urbacon in September 2014 paying $8.96 million. Some $5.5 million of those funds were removed from three unrelated reserves. Since October 2014, the funds have not been returned to the reserves.
How the four senior staff members helped themselves
On December 9, 2015, the CAO and three deputy CAO’s witnessed council awarding them with salary increases ranging from 14 per cent to 19 per cent for 2015. The new salaries were not announced but because the meeting was held in camera, the bylaw states the persons attending cannot reveal the content of closed sessions. In our opinion, this is a gross misinterpretation of the Ontario Municipal Act governing closed meetings.
The public did not discover the numbers until the provincial Sunshine List was published in March. The CAO received a $37,591 increase making her one of the highest paid CAO’s in comparably-sized cities in Ontario. She resigned in May in the face of public outrage. Details of that severance have not been revealed. The same can be said for her successor, Derrick Thomson, who was on the job for two years, had turned in his resignation, but was brought back to be CAO of the city.
Mark Amorosi, DCAO of Corporate Services including finance and human resources, said after the increases were revealed that the reason Ann Pappert received the large increase in 2015 was because she did not receive an increase in 2014. The Sunshine List says differently with the CAO receiving an increase of $5,051 in 2014.
Minister, these are some of the incidents of mismanagement and waste that has driven property tax rates to among the highest in Ontario. Hydro bills have soared 42 per cent in four years. Water bills increased on average by 4 per cent each year, despite a reduction in usage by citizens and businesses.
Why the comparable neighbouring cities of Kitchener and Cambridge possessing operating and capital spending that is 50 per cent less than Guelph, speaks to the ongoing mismanagement of the city and its governance.
My wife and I are retirees and respectfully ask that you ask your staff to investigate these facts. We believe we have presented the material in good conscience and responsibility. The palpable misuse of trust and manipulation of the rules has ignited a groundswell of distrust and helplessness but citizens are unable to do anything about it.
Your intervention to correct what we, and many others are concerned about, can give ordinary citizens who love our city, hope. Hope for a return of confidence that our city is running professionally the way the province intends.
And public trust and interest is preserved.
Thank you for your consideration.
Gerry and Barbara Barker