When personal greed and ambition supersedes responsibility

By Gerry Barker

September 19, 2016

There have been two events that have destroyed any semblance of public trust of senior administration staff and majority of council. And the Urbacon $23 million debacle is not one of them.

These events have bubbled to the surface since the 2014 civic election.

The first event is the 2015 secret salary increases awarded by council last December to four of the most senior city staff. The increases were approved by council in closed session and were not revealed until March of this year when publication of the Provincial Sunshine List of all public servants in Ontario earning more than $100,000 was revealed.

Because the salary increases were approved in closed-session, the question now is which councillors voted to allow the huge bumps in pay?

The Sunshine list contained more than 400 civic employees in Guelph earning in excess of $100,000 a year. The most interesting was the $37,591 increase awarded to former Chief Administrative Officer (CAO), Ann Pappert for 2015.

When asked about this 17.11 per cent increase for the CAO, Mark Amorosi, Deputy Chief Administrative Officer (DCAO), head of Corporate Services, said the reason was the CAO did not receive any increase in 2014. In fact, she did receive a modest increase of $5,052. So Mr. Amorosi lied and for good reason.

A case of double dipping

Amorosi actually paid himself two increases in 2015. The first was in November 2014 when the senior management was reorganized within three weeks of the civic election, creating the new position of DCAO. The new title increased his salary to $182,761 from $176,400 in 2013 to cover his new responsibility. This turned out to be exactly the same job he was performing before the civic election and senior staff reorganization.

Then came the December 9, 2015 closed-session meeting that gave Mr. Amorosi another $26,868 increase or 14.7 per cent. This brought his 2015 salary to $209,629.

As for CAO Derrick Thomson who joined the staff in 2014 as Executive Director of Operations, his intial salary was $173,720. In 2015, his salary as a DCAO, jumped by 19.48 per cent or an increase of $33,834 and a salary of $207,554

Talk about a meteoric rise. As the new CAO, Mr. Thomson’s new salary level will not be known until next March when the 2016 Sunshine List is published. In addition he received a taxable benefit of $6,472.

In our present economic circumstances, why does Amorosi, the man in charge of reviewing and approving staff salary increases, believe those increases are fair considering the competitive positions in other municipalities? . Is he out of touch will reality??

Did I mention that Mr. Amorosi is responsible for city Finances and Human Resources? Did he use his position to better his personal income? He also receives an additional $6,472 in taxable income apparently to cover his travel expenses because he lives in Hamilton.

We get a CFO who is on maternity leave until next year

A month ago, Amorosi announced that he appointed a junior financial analyst in the finance department as the city’s new Chief Financial Officer (CFO), General Manager of Finance and Treasurer.

Now I happen to know that Amorosi hired a headhunting firm to search for a CFO. I also know of one highly qualified candidate who was rejected by the headhunter.

Instead, we have Amorosi’s third attempt to control the city finances using subordinates to carry out his reckless management decisions. The first lady lasted about two months. The second lady left last March after a year on the job. The advertised position represents the third choice in the past 22 months.

Last month, Amorosi announced that Tara Baker won the CFO job but won’t report for duty until next year as she is on maternity leave. So much for spending money advertising and hiring a head hunting firm, when an allegedly suitable candidate was sitting right in the city finance department.

The fact is that the city has been without a CFO for 22 months as Amorosi has acted in that capacity. If and when Ms. Baker is able to return to work, that gap will increase to 27 months with Amorosi in charge of city finances.

Ann Pappert was the second senior officer of the city staff to resign in May. Deputy Chief Administration Officer Derrick Thomson resigned and that left just DCAO Mark Amorosi, remaining of the senior staff members hired by the former Farbridge administration.

Thomson was persuaded to return to the city as CAO replacing Pappert.

One of his first announcements was the nine-year capital spending plan has a shortfall of $170 million after only one year of operation.

Comforting words from the man in charge of finances

Amorosi quickly announced: “The city was in sound financial condition.” He lied.

If anyone should know about city finances it should be Mark Amorosi. He has control of the city finance department that has not had a General Manager of Finance and treasurer since last March when Janice Sheehy left to take a job in Peel. He also oversees Coun. June Hofland, the robot chairperson of the finance committee, for the past four years.

The Fung Report on city management paints a smeared picture of financial incompetence that has shoved Guelph’s operating expenses to a point of being 50 per cent greater than either Kitchener and Cambridge.

If you live here and own property, you know why our costs are so high. Check your annual tax bills and user fees including water and electricity. The city’s operating expenses have skyrocketed in the past seven years by 56.2 per cent compared to the Consumer Price Index of only 11 per cent.

The second costly event of examples of greed in high places, is the creation of the Community Energy Initiative. It was the brainchild of the former mayor who manipulated staff, city council and Guelph Hydro, to support her dream of establishing two District Energy Nodes. The pumps were located in the Sleeman Centre downtown and Hanlon Creek Business Park. The pumps are coupled to provide underground co-generation system supplying hot and cold water from each Node pump to nearby buildings and electricity to the provincial power grid.

At least that was the plan. Instead, we learned this year, specifically May 16, that the project was seriously flawed and unable to supply power to the grid as planned. The Chief Executive Officer of Guelph Municipal Holdings Inc (GMHI), Pankaj Sardana, said the business plan failed to obtain sufficient customers to be viable.

In fact, Mr. Sardana said the project should never have been started in the first place.

But they went ahead anyway blocking public input

The underlying reason for this was that all the planning and development meetings were conducted in closed sessions by the former mayor, chair of GMHI. The chair suppressed the public’s view. The silence was exacerbated by four city councillors who were on the board of GMHI and did not break the code of conduct as developed when the mayor was in office. These include Councillors June Hofland and Karl Wettstein and two who have departed, Lise Burcher and Todd Dennis.

The councillor’s code of conduct prevents councillors from revealing decisions and comments of closed sessions. However GMHI was a stand-alone separate corporation but secrecy of its operations prevailed.

But the senior city staff had to know what was happening at GMHI because CAO Ann Pappert was the CEO of GMHI for four years. Then there was Envida Community Energy Corporation, operated by Guelph Hydro. It was responsible for installing the two District Energy nodes and several solar panels installed on public buildings.

A city staff report in July showed that Envida owed $11 milliohm to GMHI. There was also the matter of $68.5 million, on the city books as an asset. The problem is that it is impaired; meaning the cost of carrying this asset exceeds the revenue, if any, so it gradually becomes a debit.

This situation could go on for years unless the $68.5 million can be written off, worse case scenario, or pay the interest due to maintain it as an asset on the city books.

The Bloc of Seven on council in July voted to keep the Community Energy Initiative operating until the first quarter of 2017. They disregarded the warnings of the Deloitte consultants and the staff that to keep it going, will cost an additional $60 million unvestment of our money.

The public pot is now empty

Mr. Sardana has stated that GMHI or Envida haven’t any money to invest in this failed project that so far has cost taxpayers $37.1 million.

Did we really need to pay that money when the staff, in detail, reported the financial situation with GMHI and where the money went? It was classic Amorosi to order an independent consultant to review the situation. Deloitte admitted its fees will range from $130,000 to $160,000 to report their recommendations.

This situation is showing little sign of correction.

Indeed, the city is now advertising for candidates to join the Community Energy Initiative public advisory board. There are several categories in which persons may apply. There are only four positions available for citizens.

Again it’s a move to give the appearance of thoughtful public contribution to the success of an initiative.

Except in this case there is no foundation. It remains a sinkhole of public money based on a flawed project that the majority in our city didn’t ask for or need.

The terrible situation is that it will cost the city several million dollars just to exit the Community Energy Initiative because of the contracts that were signed with suppliers and customers without any oversight by GMHI and Envida.

This is another expensive remnant of the Karen Farbridge legacy.

A – The Liberal’s double standard handling municipal residents’ complaints

By Gerry Barker

September 6, 2016

Editor’s note: Today, guelphspeaks.ca is posting its first Two-For, two, back to back, separate postings of public interest are contained in a single edition of guelphspeaks.ca. Post A is the first and Post B is the second. Each is different in terms of subject matter. Meanwhile, tell your friends and colleagues to drop into guelphspeaks.ca and discover the truth about those issues that affect all of us.

 

In September 2012, a Guelph civic action group, Grassroots Guelph (GRG), made an official complaint to Linda Jeffrey, Ontario Minister of Municipal Affairs and Housing (MMAH), requesting a provincial audit of the City of Guelph’s finances.

The request was backed up by financial data obtained from the city’s Financial Information Reports over the previous four years. These are the audited statements that the city must file annually with the provincial government.

Financial and legal professionals prepared the supporting GRG documents.

A week prior to the presentation to Minister Jeffrey, I and another member of GRG met with Liz Sandals MPP Guelph, to present a copy of the complaint as a courtesy to be embargoed until the Minister received the complaint. She agreed.

We requested the use of the Legislature press gallery to reveal the complaint data. We were informed five days prior to the Minister receiving the documents, that we had to have permission from the Speaker to use the Legislature media room. Three calls were made to Liz Sandals office prior to release date asking her to request using the media room on the day of the announcement.

GRG received no assistance from Sandals after three requests to fulfill this need. Instead, as our delegation was standing in the press gallery office, three security agents ordered us off the premises and said we had to hold our press conference on the front lawn of the Legislature. Good thing it was a warm fall day.

Then we learned that an hour after that, Mayor Farbridge was reporting we were ordered out of the Legislature. It was apparent we had a member of our delegation who informed the Mayor of what happened. We know who the betrayer was.

The CAO claims the GRG complaint was “a waste of time”

Ann Pappert, the Mayor’s Chief Administrative Officer, said the GRG report was “a waste of time.” It was obvious that our embargoed report was sent to Mayor Farbridge before the GRG delegation went to Queen’s Park.

Four months later, Minister Jeffrey sent a delegation of three Ministerial employees from London to my home to discuss the complaint. Included in the delegation was a financial analyst. He was asked if our numbers in the complaint were inaccurate or incorrect and he replied they were correct.

In a couple of months, Minister Jeffrey sent a letter thanking GRG for its efforts and said the “two parties should sort it out.”

Within a month, Jeffrey resigned as Minister of MMAH and member of the Provincial Parliament representing Brampton. This occurred about a year before Ms. Wynne won the 2014 provincial election.

Now comes the delicious irony. In effect, what is bad for the goose is great for the gander.

First, some background of the linkage between Guelph and Brampton and how Linda Jeffrey is now involved as Brampton’s mayor.

Ms. Jeffrey defeated Susan Fennell, the former Mayor of Brampton in the October 2014 civic election. In Guelph, after eight years, Karen Mayor Farbridge lost to Cam Guthrie.

Both the new mayors inherited financial and legal messes.

In Mayor Jeffrey’s case, there was evidence that former mayor Fennell had consulted with two major Ontario developers to build a $500 million downtown centre including a refurbished city hall. Brampton has a specific bylaw that prohibits elected officials to discuss developments prior to the final outcome of the application. It is an important check and balance of the public’s money to avoid unwarranted favouritism.

Oh! Do we ever need one of those in Guelph?

According to a report in the Toronto Star: “The allegations of bias on the part of senior staff and the former mayor have left city hall, in the words of current Mayor Jeffrey, “paralyzed.”

Is this starting to have a familiar ring about it? The Brampton Mayor’s word aptly applies to the problems Guelph is facing with its council dominated by supporters of the defeated former mayor, “paralyzed.”

But here comes the kicker. Last year, Mayor Jeffrey called for a provincial inquiry into the project to find out if procurement rules, designed to protect taxpayers, were violated in one of the largest deals in Brampton’s history. It’s not clear whether Jeffrey’s Liberal colleague, the Minister of MMA, concurred with her request or is letting the courts decide the outcome of the resulting lawsuits.

Instead, in Guelph, council is imprisoned with procedural bylaws that protect the staff and elected officials from public scrutiny through the use of closed-session meetings of the public’s business.

One of these bylaws gives the power of hiring all staff to the Chief Administrative Officer without council’s approval. Councillors are forbidden to discuss the details of a closed-session or they face an investigation by the Integrity Commissioner.

That’s how, on December 9, 2015, in closed session, council approved the salary increases of four top city managers ranging between 14 and 19 per cent. The people did not discover this until the provincial Sunshine List came out in March 2016. It revealed that the CAO was given a $37,500 increase for all of 2015. Large increases were awarded for the three DCAOs including Derrick Thomson, Al Horsman and Mark Amorosi, boosting all their salaries to a level of $207,000.

Guelph doesn’t follow the Brampton experience but hides public business behind closed doors so the people don’t know what’s going on.

Do we really want this movie to continue?

*            *            *            *

B –Why our electricity costs are soaring due to failed Liberal energy policies

By Gerry Barker

September 6, 2016

So you wonder why your Hydro bills are soaring. What follows is based on a commentary in the National Post written by Jon Kieran, a Toronto-based renewable energy consultant.

Ten years ago, Ontario’s demand for power peaked at 27,000 megawatts (MW) during the summer months. This past summer, one that had continuing days of temperatures exceeding 30C degree, the peak demand exceeded 23,000 MW for just one day.

Today, Ontario has an installed capacity of 40,000 MW despite a steady reduction in demand of power consumption in the past 10 years that has dropped by 13 per cent. With an annual reduction in power consumption this year, the province will consume less power than it did in 1997.

This reflects the losses endured in the manufacturing base in Ontario since the Liberals introduced their new green energy policy to close down the coal-fired electricity generating plants. It was replaced by the Large Renewable Procurement (LRP) plan.

The Liberal government used the LRP to procure large wind and solar installations. While it seemed like a good idea at the time, in ten years mismanagement of the program including intrusive policy and implementation are mostly responsible for the energy market debacle Hydro consumers face today.

Ontario has a huge glut of power generation regardless; the Liberal government is adding another 1,300 MW in large wind and solar generation under the LRP plan.

The Independent Electrical System Operators (IESO) reinforces the unnecessary need for this addition to the provincial energy plan stating: “Ontario will have sufficient supply for the next several years.”

While, the government offers sweet contracts to renewable energy developers during a period of demand stagnation, it has contributed to pushing consumer Hydro bills higher. In the past four years Guelph Hydro charges to consumers have risen by 42.5 per cent.

Ontario’s electricity rates have increased faster than any other jurisdiction in North America.

We are generating too much electricity

Part of the problem is that electricity, once generated, it cannot be stored. Ontario’s surplus power is given to U.S. border states and Hydro pays to take the excess power. It’s called “negative pricing”. Combine this with “curtailment,” paying the wind developers for energy production even though the grid cannot use the power, and it exacerbates the waste of public money.

Worse, these two problems have cost Ontario’s electricity consumers billion-dollar burdens.

Add to this the cost of continuing to build out wind and solar generating systems, and you can now understand why your hydro bills are climbing every year.

This is a critical situation for the province that already is preparing to introduce a carbon tax to be added to your hydro bill, starting in January.

Using the LRP to continue building out more renewable generating capacity must be stopped. The Wynne government’s handling of the energy file has been a disaster, starting with the destruction of the two gas-fired generating plants in Mississauga and Oakville. The price tag on that one was $1 billion, according to the Auditor General.

The former mayor to partner with her plan called the Municipal Energy Initiative (MEI) used the city-owned Guelph Hydro. Part of the plan was to create, through Guelph Municipal Holdings Inc. (GMHI), a $37.1 million District Energy system that combined electricity and co-generation to supply hot and cold water to nearby buildings.

The cost of this failed, massive project was not made public until May 16 this year, following four years of operation and development, and conducted in closed session meetings of GMHI and city council.

The complicity of Guelph Hydro in this convoluted secret project is apparent and contributed to the soaring costs of electricity to its more than 55,000 customers.

Because the city owns Guelph Hydro, it had no choice in the former mayor’s decision to amalgamate it with GMHI, of which she was chairperson until just before her defeat in 2014.

What this council must do is dissolve GMHI, suspend the MEI and District Energy system and have an independent committee composed of citizens, examine the operations and make recommendations.

With the failure of city councillors who were appointed to the GMHI board to inform the people as GMHI planned and executed MEI, councillors, with the exception of Mayor Guthrie, should not participate in the committee deliberations. The committee would be given power to subpoena witnesses and consultants.

We are now 20 months away from a provincial election and 26 months from a civic election. It’s time to organize and stop the waste and spending.

 

 

 

It’s time for the Ministry of Municipal Affairs to step in

In her first term as Mayor, Karen Farbridge led the council to oppose WalMart to establish in the city. She lost the election in 2003 and the Kate Quarrie council approved the project after 11 years of wrangling. It opened about a week before the 2006 election. Mayor Kate Quarrie and her council paid the price by being defeated. Since then Guelph’s citizens have been paying the price.

Now an independent consultant has written a secret report, known as “The City of Guelph Operational Review Issues Scoping Report” that has been revealed to the world.

It is a clearly articulated and devastating indictment of the way the city is managed. It reveals how the majority of council has deliberately created an anti-business and anti-development culture in Guelph to suit its own purposes.

It reveals how senior management including the Mayor has bungled city finances and job creation to create an unhealthy morale among staff. The city debt has soared to a record $118 million under the Farbridge administration.

Under council’s own rules the city debt cannot exceed 55 per cent of the total budget each year. Here are the figures. The 2011 budget had total spending at $167 million. Calculating 55 per cent of that figure and the total debt should not exceed $91.85 million.

That results in excess debt of $26.15 million. That money has already been spent. Now council has approved spending another $15 million on a waste collection system to supply the new $32 million wet waste composting plant … the one that doesn’t work.

Is it any surprise that the city has failed to hire a qualified Chief Financial Officer? The last one lasted one week on the job after looking at the books.

Here are some highlights from the consultant’s conclusions:

“Guelph is among the more difficult places in Ontario in which to do business and … the city does not work collaboratively with business. Moreover, some believe that the city makes things unnecessarily complicated.”
“Various examples were offered — the process for Walmart coming to Guelph, the process for securing approval of the Hanlon Creek Business Park, the process for securing approval of the Home Depot — as proof that the city as a whole is generally too willing to allow vocal interests to delay projects that are eventually approved.”
“City councillors were frequently identified — by virtually all parties consulted — as contributors to making Guelph a challenging place with which to do business.’ ”
“There is a segment of council that is perceived as anti-development and anti-business’ … Even some staff question the degree to which council is open to development and business investment in the city.”
“The city says it wants infill and higher density development, but seems to make it difficult to approve this kind of development.”
The city says their rules and requirements must be adhered to, but certain city projects move forward without full permits and proper drawings.”
“A number of external participants believe that staff find it much easier to raise objections and say ‘no,’ than to work with a client to find a way to say ‘yes.’ ”
“The city was described as lacking an appreciation of the urgency required when in the midst of brokering deals.”
“A significant number of staff — particularly those at the mid-to-lower-levels agree that there is a great reluctance to share opinions or espouse views that have not been specifically endorsed by more senior staff.”
“Some say that city hall is still trying to operate too much as though Guelph is a ‘small town’ and not enough like it is a growing city that has been designated one of the province’s urban growth centres.”
“Some staff described morale as being among the lowest they have ever seen.”
“A number of participants noted that actions to address the morale issue are among the most important that the city should consider.”
“Uncertainty and fear … attributed to ‘surprise layoffs and firings,’ employees who are removed from their positions without sufficient explanation, other employee departures clouded in uncertainty, and the loss of good people who have chosen to leave of their own volition.”
“A few external participants noted their diminished confidence in city management as a whole.”
“Moreover, there is a sense that some councillors have an inappropriate level of ‘hands-on involvement’ in development and business investment initiatives, to the detriment of the process.”
“It is important to note that there is a significant skepticism and cynicism about the potential for positive outcomes flowing from the Operational Review.

Every citizen of Guelph should read this report. It calls for independent action to clear up the mess the Farbridge administration has created. A good start would be to create a citizen’s petition requesting an investigation by the Ministry of Municipal affairs.