Tag Archives: Ontario Energy Board

How Guelph Hydro was given away attempting to solve the GMHI debacle

By Gerry Barker

Augurs 8, 2019 – Updated 8/7/19

Opinion

Part Five of Seven Parts

Note to viewers: Part Six of this series is delayed pending some new information. Thanks for your support and interest. GB

Why did Guelph Hydro’s merging with Alectra Utilities Inc. with ignoring the questions raised by the public before council approved it December 13, 2017? Why did council approve spending $2.6 million to finance the campaign to merge with Alectra? Why didn’t the city inform the 55,000 power customers of the details of the merger with Alectra Utilities?

Just prior to council approving the Guelph Hydro merger with Alectra Utilities, I was lying in bed November 2, 2017, contemplating my day and trying to absorb the Trump Twitter follies and its effect on Canada.

I received a call from a councillor and we talked about the proposed Guelph Hydro merger with Alectra Utilities Inc. I was advised to send my question to a website “energizingtomorrow.ca and the questions would be answered.” I discovered that the website rationed questions and the number of characters. In my opinion, this was suppression of public information.

On that basis, I went to work and prepared some 50 questions that I felt the Hydro customers and residents, of which I was one, needed to know about this proposal and its consequences.

Here’s a snapshot of a portion of the website that was recommended:

The committee’s (SOC) education and community engagement efforts will continue through all phases of the process.

If Council decides to pursue merger negotiations, the community will be invited to comment on any proposed merger before Council makes its final decision.

Learn more. Ask us anything.

energizingtomorrow.ca

Well, city council had already signed a memorandum of agreement with Alectra Utilities; the corporation was ready to merge Guelph Hydro. The merger would give away Guelph Hydro without any immediate compensation for the $228.4 million city investment. Hydro’s customer’s investment in poles, wires, substations, equipment, technical staff and Hydro headquarters would be sucked into the Alectra network.

Because the public was not told the details of the memorandum of agreement already signed, it is safe to say there was no consideration for the following: asset valuation, goodwill, operating surpluses, investments or the wonderful culture of the organization. It was one described by knowledgeable experts as well run and profitable. In fact, it is one of the top performing Local Community Distribution operations in the province.

The city puts a No Sale sign on Guelph Hydro

Let’s start from the beginning when the city council in the fall of 2017, formed the Strategic Options Committee (SOC) co-chaired by CAO Derrick Thomson and Hydro Chief Administrative Officer, Pankaj Sardana, There were four non-elected individuals named, two from Hydro and two ratepayers.

The SOC was charged with disposing of Guelph Hydro.

Why, one may ask? If it ain’t broke, why fix it?

From the start all options were on the table although the SOC meetings were held in closed-sessions with only members of council being informed of discussions and developments.

In February, the SOC reinvented its purpose. First Panaj Sardana was removed as co-chair and replaced by Jane Armstrong, chair if Guelph Hydro. Two members of the committee were replaced including Richard Puccini.

Something else occurred that month and was only reported later, the option of selling Guelph Hydro was no longer considered by the SOC, despite interest from unnamed persons to make an offer.

The source of this development was one of the SOC members who were no longer on the committee.

In my opinion, this triggered speculation that the SOC had selected Alectra Utilities to merge with Guelph Hydro. But it became increasingly clear that disposing of Guelph Hydro was an antidote to clean up the Guelph Municipal holdings Inc’s losses of $66 million.

While Mayor Cam Guthrie cheer-leaded the merger message, it turned out the city spent $2.6 million on a campaign to convince the public this was a good deal. It was an attempt to change the spots on a leopard.

Approved by council that few understood the deal

In my opinion, it was a fluffy campaign with little attendance at town hall meetings. The administration’s communications strategy using the energizetommorrow.ca website as its conduit for merger information. It included city staff time to turn out a thick report justifying the merger just a few days before the council made its decision. This report was only available online with a small number of hard copies available to key individuals.

It reminds me of the tactic: Paralysis by Analysis

It’s ironic that prior to this last minute presentation less that 12 days before this December 13 2017 council meeting to hear citizen delegates. They didn’t listen to the 22 delegates who have reasoned argument to delay approval and to review and allow more public information.

By a vote of 10 to 3, council approved the merger.

Isn’t it strange that this same council killed online voting in the 2018 civic election but used online not to reveal the details of the merger?

This was a planned expensive project that turned over our electric distribution system for 4.86 per cent of 60 percent of Alectra utilities profit. It remains an exercise in deliberately disguising or covering up the truth, and the people are the real victims.

In agreeing to this deal, the Guthrie administration was had by experts from team Alectra. Further, they indirectly denigrated Guelph Hydro as failing to respond to the rapidly changing power technology,

The accounting labyrinth created by this so-called Community Energy Innovation has done irreparable financial damage that has resulted in annual property tax increases of averaging more than 3 per cent.

Remember in the 2014 civic election campaign, mayoralty candidate Guthrie promised he would keep the property tax rate to that of the Consumer Price Index (CPI) that was 1.11 per cent in 2014.

Then, last year our Mayor undermined the Progressive Conservation Guelph Riding Association in charge of selecting a candidate. Guthrie attempted to obtain an unopposed nomination to run for the PC’s. He was maintaining, at the time, that he would be running for Mayor. Good thing he had a card in his hand.

Of the 50 questions submitted to council, none answered except the Mayor, the last three remain a mystery.

“ Why is Guelph Hydro involved in Green Energy technology when a mismanaged sustainable energy project by GMHI has cost the citizens $66 million in loss of shareholder equity?

“Is Alectra agreeing to take the $93 million long-term debt of Guelph hydro?

“Who is representing the citizens’ interests negotiating the merger details?

Oh! There is one question I’d like the Mayor to answer: Who received the two TESLA home power storage systems that he said were installed in Guelph?

The citizens of Guelph were the big losers in this episode involving mismanagement of city business and resources.

And the winners are:

Mayor Guthrie re-elected in October 2018,

Former CAO Ann Pappert who walked away from her job May 16, 2016 receiving $263,000 for five months work,

Former CAO Derrick Thomson received a $57,000 performance bonus for his role in the Guelph Hydro/Alectra merger in 2018. He left the city in March 2019,

Former Hydro Chair, Jane Armstrong, was appointed by council to represent the city for five years on the Alectra Utilities Board of Directors. She is being paid $25,000 a year plus expenses.

Finally, Alectra Utilities who received a gift worth $228.4 million, the book value of Guelph Hydro.

Think about this. Even if Alectra pays a $1.500 annual dividend to the city it would take an estimated 153 years to even repay the $228.4 million 2016 book value of Guelph Hydro.

Was this a great deal or what?

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CAO Derrick Thomson explains Guelph’s global giving goals but doesn’t giving begin at home?

By Gerry Barker

December 3, 2018

The other day a number of community leaders attended a breakfast meeting in a downtown bar. The purpose of the meeting was to discuss the United Nations’ 17 Sustainable Development Goals. Guelph Gives organized he meeting in conjunction with the Giving Tuesday campaign of last week.

The UN goals include eliminating poverty, creating gender equality, climate action and reducing inequalities.

Guelph Gives organizer, Emma Rogers said: “We know Guelph is great in terms of financial give-back and in terms of volunteerism. What can we do to take that another step further?

She answered her own question. “Taking a bigger piece of the pie to not only help the people of Guelph but also helping people around the world.”

For the record, Canada is a major contributor to a number of agencies working under the UN umbrella. Also, there are many Non-Governmental Organizations (NGO) offering services and assistance in a host of countries around the world.

A Noble initiative

It is admirable for this organization to urge support of other people around the world but what about other homegrown issues facing our community? These include affordable housing, public safety, and drug addiction, health and wellness and updating infrastructure.

Then we have the active transportation crowd who demand more bicycle lanes and trails and don’t have to pay for it. Fast-forward 20 years. The greatest revolution in vehicles will be the general use of electricity cars, trucks, and buses.

There will still be congestion and lack of parking on our streets, just like today because in 20 years Guelph’s population will grow by an estimated 40,000. The former Liberal government’s Places to Grow plan estimated that Guelph’s population would be 175,000 by 2050.

So here is my personal dilemma. Do we continue to spend millions on bicycle lanes at the expense of vehicles that use our streets? Just so we can help people around the world? We currently have a transit system that is inefficient, expensive and geared to chiefly supplying transportation for the 20,000 University of Guelph students for eight months.

No matter what the administration has done in the past 12 years, the emphasis on failed energy projects costing millions; demands for climate change by cutting the use of fossil fuels; wasting money on bike lanes on major roads to support a tiny portion of the population of Guelph; projecting spending millions on the proposed $350 million Baker Street Parking lot downtown. The list of financial commitments in terms of multi-millions of capital spending increases while a city council seems devoid of common sense

Here’s an example. We just re-elected a mayor who promised that the city would finally get a new downtown library that would be part of the Baker Street development. Here’s the truth. The city staff says the project will not start until 2024. By the time the library is completed, at least ten years will have gone by before the first book is loaned out.

That’s big time hyperbole and that’s three city councils from now.

The article carried on the GuelphToday website quotes the Chief Administrative Officer, who attended the meeting, at length about the UN Sustainable Development Goals

Chills go down my spine when I hear this

Mr. Thomson outlines the city venturing into areas that a municipality traditionally has not done. Specifically he included the Guelph Community Energy Initiative’s (CEI) efforts by reducing the carbon footprint and the city’s goal of being net zero in its carbon footprint as well as being 100 per cent renewable in its energy uses.

He’s kidding right?

Let’s start with the CEI. The newly elected mayor Karen Farbridge stitched it together in 2007. The organizing meeting was attended by many enthusiastic community leaders about the goals if CEI.

For those of our readers not familiar with CEI here is a brief record of its achievements.

More than 300 change orders to make the new city hall environmentally green, resulted in the firing of the General Contractor, Urbacon Buildings Group Inc., and a subsequent lawsuit that cost the city an additional $23 million to complete the project. As a result the Mayor was defeated in the 2014 civic election.

Next was the Guelph Municipal Holdings Inc. scandal to make Guelph self sufficient in energy. This was another Mayor Farbridge plan linked to her CEI initiative. Trouble was it involved Guelph Hydro and a business plan that was labeled secretive, sloppy and irresponsible. Nobody outside of the administration knew what was happening until the results started to leak out. Long story short, the GMHI shareholders, the people of Guelph, according to a KPMG audit of GMHO operations stated there was a liability of $63 million.

Here’s the CEI Kayo punch to the citizens: In the fall of 2016, the council appointed a committee to investigate the sale or merger of Guelph Hydro with tangible assets of $228 million according to its 2016 financial report. Guelph Hydro was owned by GMHI. The committee, co-chaired by CAO Derrick Thomson, most times met in closed session. In October 2017, Mayor Guthrie announced the merger of Guelph Hydro with Alectra utilities Inc., a large-scale power distribution corporation. Despite the many questions regarding the sale or merger, the details of this deal have never been revealed. As of January 31, Guelph Hydro disappears and is no longer the property of the 55,000 customers. It’s thanks to the closed session meeting of the Ontario Energy Board thst approved the deal despite citizen’s protests.

Mr. Thomson was involved in these CEI debacles as CAO and co-chair of the dispersal of Guelph Hydro.

His boast that Guelph was the exception not the rule when it came to sustainability and environmental issues is misrepresenting the facts.

As the staff head of more that 2,100 employees not including police, fire and EMS, in his two and a half years on the job, there has been no relief of property taxes, user fees or industrial development. Instead the citizens, including those 57,000 who didn’t bother to vote, are stuck with an administration that refuses to deal with the basic underlying problems.

Darn it Derrick. Why don’t you concentrate on lowering operational costs starting with a meaningful staff rationalization by an independent firm; put a sock in the proponents of the Guelph Innovation District, turn up the heat of the Economic Development Department to attract more commercial and industrial development; work to attract technologists to develop Artificial Intelligence and new software.

At the same time, work to juice city revenue besides tapping the property tax owners every year. You can start by getting our MPP to persuade the Legislature to update the University’s bed-tax deal in lieu of property taxes. After all he says that he has many friends in the PC caucus who are unhappy with the government.

Running a municipality is not rocket science but setting off one or two rockets may make Guelph an even better place to live and work.

 

 

 

 

 

 

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Will the new council come clean about the GMHI $66 million asset sitting on the 2017 city financial statement?

By Gerry Barker

November 12, 2018

Opinion

In a little more than two weeks, the newly elected city council will take command.

The October civic election sent 11 incumbent members back to council plus two newcomers. Rodrigo Goller and Dominique O’Rourke.

So, nothing has changed when change remains more needed now than in the previous four years.

The seven progressive members of council still hold the majority and will for the next four years. While the Mayor worked to establish a slate to create a personal majority to offset the power of the Leftists, it failed. What occurred was Ms. O’Rourke replaced Mr. Wettstein and Mr. Goller replaced Mr. Van Hellemond.

The voter turnout was one of the lowest in many years with some 57,054 out of 90,786 eligible voters who did not bother.

The only explanation is that those voting absentees must be satisfied the city was in good hands. Or, many were not informed of the issues, present company excepted. Between the communications staff at City Hall and various online bloggers, the organic action of city council was rarely, if ever, reported.

So let’s review: Unfortunately, right now there is faint hope that the new city council will address the mistakes of the past and reform needed governance and financial issues. There is no evidence that those elected incumbents will stop clinging to their failed concepts that have already wasted millions.

For starters, and this is information that you will not find anywhere in the softball media serving Guelph, is the financial asset listed in the official City of Guelph audited Consolidated Position as of December 31, 2017. The listing was the asset of Guelph Municipal Holdings Inc. (GMHI) of $66,341,000.

Did you ever read or hear about that?

So the next question is: What happened to that $66,341,000 in 2018? Guess we’ll have to wait for the 2018 official financial statement that will be published sometime next year.

But here is what I believe occurred.

In February 2017, the little known Strategies and Options Committee, (SOC) was appointed by city council to study the disposal of Guelph Hydro that operated under the GMHI board of directors. Initially, the SOC was composed of joint chairmen Chief Administrative Officer (CA) Derrick Thomson and CEO Pankaj Sardana, Chief Executive Officer of Guelph Hydro. There were three other non-elected public members.

Their mandate was to sell Guelph Hydro, or amalgamate with another municipally owned electric power distribution system or merge with a large power distribution corporation.

That February meeting of SOC removed the sale of Guelph Hydro as a consideration. What followed was a purge in which Mr. Sardana was removed and replaced by Ms. Jane Armstrong, chair of Guelph Hydro. One of three committee members resigned later stating he was opposed to taking the sale of Guelph Hydro off the table.

The GMHI Board of Directors consisted of Mayor Karen Farbridge as Chair, Councillors Lise Burcher, June Hofland, Karl Wettstein and Todd Dennis plus two non-elected civilian members. The CEO was CAO Ann Pappert. Ms.Papert left her job as CAO May 26, 2016.

Keep in mind that the SOC meetings were held in closed-sessions. GMHI did not produce regular summary of operations, financial statements, objectives or recommendations to council.

Not until October 2017, when Mayor Guthrie announced an agreement in principal to merge Guelph Hydro with Alectra Inc., a large power distribution corporation for several Greater Toronto Municipalities.

All it took was $2.36 million of your money to convince council

Yes, that was what the city spent promoting the deal with town halls, telephone surveys and an online document, the size of the Toronto telephone book, with little substance or financial details. Hard copies of the multi-page book was only available to a few key people. Certainly few of the 55,000 Guelph Hydro customers read the this online-based document, presented just 12 days before the council meeting that approved the deal.

More of your tax dollars at work

Slam Dunk! No details except a glowing endorsement from the Mayor about what a great deal the city had made. In December, city council approved the deal, still under negotiation, by a 10 to 3 margin and the rest is history.

The only evidence that exists today, following the Ontario Energy Board’s (OEB) approval, four days before the civic election, is the statement by the OEB that Alectra Utilies was purchasing all the outstanding, shares and issues of Guelph Hydro Electric Systems Inc, aka Guelph Hydro.

Key word here is “purchasing.” Could it be that the price happened to be $66 million of GMHI as shown on the city’s 2017 financial statement?

Is this what council traded to get out from under the GMHI financial disaster?

All along Mayor Guthrie has stipulated that Guelph Hydro is not being given away.

So why did he not tell the truth and refuse to reveal the financial details?

We may never know except that the $66 million asset of GMHI had better be part of the city’s assets in the 2018 financial statements. I’m betting it may still be there because the merger with Alectra closes January 31 2019. It will take another 18 months before the money disappears from the city books.

By then Guelph Hydro will no longer exist.

I still maintain that Alectra got the bargain of the century. Guelph city council looked like hicks at the circus approving this flawed merger concocted by highly skilled lawyers with little oversight of our representatives..

Of course, the new council should tell us what really happened to that $66 million asset on the city nooks in terms that citizens understand.

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The takeover of Guelph Hydro is only the beginning of the elitist domination of city government

 

By Gerry Barker

October 29, 2018

Thursday, October 18, three members of the Ontario Energy Board (OEB) handed down a decision that approved the merger between Alectra Utilities and Guelph Hydro Electric Systems Inc. (Guelph Hydro).

The former Liberal provincial government appointed the three OEB members’ decision that states the deal closes January 31, 2019.

The decision fails to disclose the amount Alectra paid for all issues and shares of Guelph Hydro held by Guelph Municipal Holdings Inc.

This former Liberal government encouraged the sale, merger or amalgamation of medium to small municipally owned power distribution systems. The purpose was to allegedly create larger, more efficient systems.

At the time, Guelph Hydro had more than 55,000 customers and 120 employees.

In a large ad published in the Guelph Tribune April 19, 2018, The OEB outlined some details of the proposed merger. One section was headlined: “Be informed and have your say.”

It went on to state that: “You have the right to information regarding the application and to be involved in the process.”

Involvement disappeared

A number of Guelph citizens responded requesting an oral hearing in order to have “Their Say” in the matter before the board. Some us received a confirmation by the OEB acknowledging our request to intervene in the hearing.

On July 12, 2018 the OEB detailed the hearing process. Now the applicants had filed a written submission to the board and requested a written response.

There were a number of Guelph residents, including my wife and me, who requested an oral hearing giving reasons for doing so. The main issue was the complexity of the deal of which the public received an outline available only Online, 12 days before city council approved the agreement in principal.

It was not a transparent detailed version of the agreement but a carefully crafted PR document that had little relevance to the real agreement that was still being negotiated.

Council approved the agreement in principal by a 10 to 3 majority despite the presentation of 22 citizens who asked council to delay the vote until the public, some 55,000 of them, had the opportunity to study and digest the details. That never happened.

Further the deliberations by the Strategic Options Committee, appointed by council, was in charge of negotiating the merger that was held in closed session without public participation.

So, did we, a group of interveners, ever given the chance to present our case? Regardless of being acknowledged by the OEB, we were denied intervening.

Here’s more from the July 12 OEB action statement: “Decision of Confidentiality and Procedural Order No. 2:

The bogus invitation

“The OEB invited interested parties to advise if they thought that an oral hearing was needed.”

When we submitted our reasons for an oral hearing in April that was acknowledged in writing, it was the last we heard from the OEB.

We can only assume this deal was already baked. There is no mechanism for appealing this arbitrary decision that was announced in a city press release of one page, Friday morning, April 18, barely 12 hours after the decision was made.

This kind of governance demonstrated by the OEB regarding other provincial and municipal governments is one of the main reasons that the turn out in the recent civic election saw only some 33,000 votes cast out of more than 90,000 eligible citizens.

The voter bunch missing in action

Some 57,000 eligible voters did not bother to vote. That means that almost 60 per cent of all eligible voters in Guelph did not show up to be counted.

We are a city of 131,000 citizens. We are owners of a corporation that is valued at $600 million and we don’t bother to exercise our right to vote?

The so-called merger of Guelph Hydro and Alectra Inc. can only be blamed, ten years from now on a electorate that didn’t care in 2018. The result as time goes by, and most of this council today, and for the next four years, will be gone and no longer responsible.

Can’t blame them now. Only blame ourselves for failing to pay attention and stop giving away a treasured asset worth some $160 million for peanuts.

Voter apathy is a recipe for corruption

Citizen’s apathy is a disease and most people of Guelph are currently incurable.

We have to realize that in four years, our city will endure the progressive demands of the majority of council. It will be a repeat performance of the past four years with a majority of council accountable to their masters at Queen’s Park and Ottawa.

We are under the control of a National leftist party. The New Democratic Party, that the Ontario branch supplied expertise and support to the six re-elected progressive members of council.

Nothing is going to change. It will be more of the same even increasing property taxes, dodgy environmental projects, failure to remove all the city’s waste from every household and increasing the debt.

All those headlong efforts including operational costs need revenue. Some 80 per cent of it comes from property taxes.

The ugly by-product of non-participation

In the last four years, the exponential increase in property taxes was more than 18 per cent.

If we ever experience a recession, and our private sector job force is affected, then what happens?

Lloyd Longfield, Guelph’s member of the House of Commons, boasted the other day that Guelph had the lowest unemployment rate in Canada, only 3.6 per cent.

What he forgot to add was that a huge portion of the city workforce is either unionized or has secure government positions. For example there are more employees working for the University of Guelph than our major private employer, Linamar.

On a comparison basis, Guelph has more public servants per capita than its peer group of similar-sized cities in the province.

Secure, well paying jobs that are recession proof, and the numbers, are increasing every year.

The issue is clear. Why would all those protected civil servants care whether or not there was an economic down turn? Their paychecks and pension payments will keep coming.

Why would they bother to vote in a municipal election?

Because they don’t have to.

The province and the city guarantee their jobs and income benefits.

As long as the minority of voters, those who care, put up with this elitist-dominated city, chiefly populated by civil servants with guaranteed salaries and pensions, our taxes and user fees will increase exponentially and the city will gradually become too expensive a place in which to live and do business.

 

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Swimming upstream against a tsunami of incompetence

By Gerry Barker

August 23, 2018

More than two years ago, I asked the Ontario Ombudsman office to assist me in obtaining the minutes of a city council closed-session meeting conducted December 10,2015. That meeting approved salary and bonus increases to the four senior staff managers that totaled $98,202.

At the time of the request, only council and some staffers knew what those increases were and why was there no explanation?

The Ombudsman representative told me that that office could not assist because “Guelph had its own special investigator of closed session meetings” … Amberlea Gravel located in London. This organization was hired by the city in 2008 and had been on retainer for the past ten years.

I filed a request for the minutes through the city clerk’s office. It took more than four months to be told that my request was denied. By that time, the increases had been revealed when the 2015 Sunshine list was published in March 2016.

To this day, the city administration has never explained why it withheld that information for almost four months and has yet to acknowledge it.

The cover-up was controlled behind closed doors.

It got me thinking this year about the methods used by the current Guthrie administration to suppress public participation in the business of the city.

So I checked with the city clerk and requested how many closed-session meetings were held since January 2015 to a couple of months ago.

I was informed that in 2015 and 2016 there were 41 such meetings held in each year. That’s 82 over 24 months. That number dropped in 2017 when the council voted to conduct its business acting as the ‘committee of the whole.’ Last year there were 12 closed-session meetings with a similar number this year to date.

Why does this matter?

It is a slippery slope that allows city council and senior staff to virtually, make decisions in secret, without public input or knowledge. It results in pre-digesting the contentious items of business without telling anyone.

That’s how the Farbridge administration wasted millions on the Guelph Municipal Holdings Inc (GMHI) by imposing silence for four years using closed-session meetings.

To prevent leaks of the details of those closed-sessions, the hammer over the councillors was the threat of the Integrity Commissioner investigating the alleged misconduct and potential penalties.

The scope of this GMHI ‘green’ adventure was to create power self-suffiency and potential heating and cooling of downtown building and the Hanlon Business Park.

It was finally exposed following the defeat of the former mayor in 2014. It took until May 2016 before the awful truth was revealed. Ironically, the report was presented by GMHI CFO Pankaj Sardana and signed by Chief Administrative Officer (at the time) Ann Pappert. Ms. Pappert was appointed Chief Executive Officer of GMHI in 2011. So, she was wearing two executive hats and had to have intimate knowledge of the city and GMHI operations for four years.

But it gets better, or worse as the case may be. The former mayor was chairperson of the GMHI Board of Directors. Because of her position as mayor and head of GMHI that included Guelph Hydro, she named four members of council to the GMHI Board.

These included Councillors June Hofland who was also head of the council finance committee, Karl Wettstein, Lise Burcher and Todd Dennis. This gave Ms.Farbridge complete control of both the city and GMHI.

The disturbing situation some four years later, is that the financial mess is still to be cleaned up as contracts and operation of the District Energy pumps are still operating to supply hot and cold water to five buildings downtown, including the Sleeman Centre and River-Run theatre across the street.

Best estimate of the cost of wrap-up will require $17 million and counting. The bottom line is there remains insufficient revenue to continue operating GMHI but the problem has yet to be resolved. The purchase of GMHI shares by Alectra may solve the situation. According to the merger agreement, the proposed Alectra Inc. dividend will be paid to GMHI, not the city.

The Guthrie administration has promoted the sale of GMHI shares, which are worthless, to Alectra Inc as part of a merger agreement. The data shows that the owner of Guelph Hydro ‘s tangible assets including poles, wires, substations, and equipment is the subsidiary corporation Guelph Hydro Electric Services Inc.

And who owns GHESI? Why it’s GMHI. That’s why Alectra is ‘purchasing the shares of GMHI.

How did we get into this pickle?

Because as citizens we were denied important information and details including a supportive business plan that made sense, not chaos.

It was a carefully orchestrated scheme that was under the control of a city council, of which most members were bereft of skills, financial acumen and conscience.

So what does the Guthrie council do? They approve entering an agreement with a private corporation to redevelop the Baker Street parking lot into a spiffy downtown showcase of mixed use including a new library, businesses, shops and residences.

The estimated cost of this grand design is unknown. One estimate said between $314 and $350 million. This proposal won’t start until 2024. Citizens have no information about the city’s share of the development. And it won’t be ready for occupancy until at least 2028.

When is this stream of building abortive monuments going to stop? There is plenty of blame to go around. But until we elect responsible and experienced councillors we will continue swimming in a sea of uncontrollable, ego-driven waste of resources.

 

 

 

 

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One man’s opinion: Was there a conspiracy to merge Guelph Hydro instead of selling it?

By Gerry Barker

August 13, 2018

As many viewers know, guelphspeaks.ca has been a severe critic of the proposed merger between Guelph Hydro and Alectra Inc, the parent corporation of Alectra Utilities.

I call it the steal of the century.

The onus of this multi-million dollar giveaway lies with those 10 members of council who, on December 13 2017, voted to approve the merger. The truth, as it is gradually coming out, is that the council majority had already taken the bait and decided to approve the complex deal months before it took shape.

Despite late hour protests by citizens, including 22 who appeared before council expressing the need for more truthfulness, clarity and delay until the people understood what was at stake. Protests denied.

We have yet to be told how much GMHI cost the city over five years.

What did ten councillors know that we didn’t?

As a public service, here are the names of the ten: Mayor Cam Guthrie, Councillors Dan Gibson, Andy Van Hellemond, June Hofland, Mike Salisbury, Christine Billings, Leanne Piper, Cathy Downer, Mark Mackinnon, Karl Wettstein.

Councillors Phil Allt, James Gordon and Bob Bell voted against the approval.

In my opinion, there is no public record of discussions by members of council to accept the terms and considerations of this merger. The public, those people who actually own Guelph Hydro, were totally ignored by the majority of council in making the decision to merge with Alectra Inc.

So what is the truth and consequence of this decision? In my opinion, it was a conspiracy to bail out the multi-million dollar financial losses incurred by the former administration operating Guelph Municipal Holdings Inc. (GMHI) that included Guelph Hydro.

It took more than a year to finally be told the extent of the failed GMHI scheme.

Those losses and wasted resources were a stain on the city’s account books. The council realized that not even the financial resources including the credit rating of the Corporation of the City of Guelph could sustain and repay the losses.

Since early 2015, the administration has quietly worked behind the scenes with accountants and lawyers to extricate itself from the GMHI disaster in creating a system of power self sufficiency and incorporating it with a geo-thermal hot and cold water delivery to a small number of to commercial and hi-rise residences.

City council was frequently blinded as GMHI business was conducted in closed sessions for more than four years. The public, including this writer, had no clue as to what GMHI was doing.

That is, until May 16, 2016 when Chief Administrative officer, Ann Pappert signed a report along with CEO of GMHI Panaj Sardana, that revealed parts of the looming scandal that would have a disastrous impact on the city’s finances.

In mid-July 2016, a staff report provided additional information that gave more insight into what had occurred in the five years that GMHI operated in almost complete secrecy.

The plans created under the leadership of former Mayor, Karen Farbridge, were flawed and executed without the proper and necessary checks and balances.

Until the May 16 report there were many people, city staff and elected officials, who knew what was unfolding and never said a word.

The players

Let’s be frank, this could not have happened without the support and loyalty to the former mayor. Included were key staff members and some councillors who served on the GMHI board of directors. These included Lise Burcher, June Hofland, Karl Wettstein and Todd Dennis. Wettstein is not a candidate this year, Hofland and Burcher are candidates and Mr. Dennis is no longer associated with council.

It is important to note that former CAO Ann Pappert was also the Chief Executive Officer of GMHI for four years. The closed session meeting of council December 10, 2015 was when the four senior managers received the salary and bonus payments totaling $98,202. Ms. Pappert, Deputy Chief Administrative Officers Derrick Thomson, Al Horsman and Mark Amorosi were knowledgeable of the GMHI operations and problems.

Today only Derrick Thomson remains with the city as CAO although he resigned in January 2016 to take another position then returned in June to take over as CAO.

Not one of those councillors associated with GMHI, spoke up about the GMHI operations. In my opinion, they committed the highest form of dereliction of their sworn fiduciary responsibility. In fact, they were all paid extra for participating on the GMHI Board.

Coun. Karl Wettstein declined to participate during a council meeting discussing the   GMHI situation on the grounds that because he received remuneration for his membership on the GMHI board, he declared a perceived conflict of interest based of his financial connection.

But that didn’t stop Coun. June Hofland and Mr. Wettstein from voting for the merger of Guelph Hydro.

The extraordinary part of approving the merger is that those ten councillrs couldn’t have known what they were approving. The agreement was still being negotiated and it wasn’t completed until February, this year. That’s when a written proposal, containing 19 documents was available on request. Some of which had major redactions, Alectra Inc. and Guelph Hydro presented it to the Ontario Energy Board for approval.

No date has been set for the OEB to conduct a hearing and make its decision. There are four interveners who will ask the OEB to reject the proposal. A spokesperson for the board estimated that the hearing will not be held for up to 12 months.

Based on that statement, no decision will be made before the October civic election.

Entering from Stage Left, the SOC

The framework for this abortive, agreement hatched for the most part in closed sessions, was created in the fall of 2016 by the council-appointed Strategies and Options Committee aka SOC. It was originally co-chaired by Chief Administrative Officer Derrick Thomson and Guelph Hydro Chief Executive Officer Pankaj Sardana. There were three other members on the committee who we’ll call civilians.

There were no elected officials on the committee.

The structure of the SOC changed as Hydro Chair Jane Armstrong replaced Mr. Sardana. Two other members were replaced. This change occurred prior to February 2017 when council made a major decision, in open session, to remove the option of selling Guelph Hydro from further discussion or negotiation.

So why was council told to dump the option of selling the $300 million profitable, publicly-owned power distribution systems serving 55,000 customers?

I have learned that there were at least two neighbouring municipalities that expressed an interest in buying Guelph Hydro. Because this was discussed behind closed doors, we’ll never be told who they were.

The reason that the SOC was instructed to stop selling the crown jewel of Guelph remains a great, untold story of backroom intrigue and arm-twisting.

But the reason is clear that the massive debt accumulated by the Guelph Municipal Holdings Inc., along with Guelph Hydro, chaired by the former mayor, had to be dealt with on the city books.

For the record, this merger is to get rid of that debt by giving away Guelph Hydro and its assets to Alectra Inc for almost nothing. You don’t have to hold a PhD in accounting to figure this out.

How did the city get out of this hole created by a former administration without borrowing money from a recognized lender such as a bank or credit union?

Welcome to Trader Joe’s

The answer friends is they made a deal with the devil and traded Guelph Hydro and all its functioning assets to Alectra for a tiny share of Alectra Utilities’ profits of just 4.36 per cent but only sharing in 60 per cent of Alectra Utilities profits.

Voila! The trade kicks the accumulated debt of Guelph Hydro controlled by GMHI. The merger agreement states:

“The purchase by Alectra Inc. of all the issues and outstanding shares of Guelph Hydro held by Guelph Municipal Holdings Inc. a wholly owned corporation of the City of Guelph.”

It’s important to note that Alectra Utilities is a subsidiary of Alectra Inc. This corporation is the so-called “purchaser” but Guelph only shares in the profits of its ubsidiary corporation.

Here’s the brutal truth. Alectra Inc. once approved as the new owner of Guelph Hydro, is dropping that brand name as soon as the OEB approves the merger. Here’s another possibility, Alectra Inc. can sell the assets of Guelph Hydro to the highest bidder and walk away with millions.

Mayor Guthrie keeps saying that the city is giving nothing away when asked about the proposed merger.

Did you know that the city admits it has spent YTD some $2.6 million of your money to sell this deal to us. The head of the city’s communications department was the key driver of the campaign to convince us with slanted polls and town halls where few people turned up.

Then just before the vote to approve the merger, the city announced that it was receiving an $18.5 million “special dividend” from Guelph Hydro as soon ad the deal is approved.

So our council is so smart to believe that getting $18.5 million of our own money is a fair trade for a $300 million corporation that the citizens happen to own.

Alectra Inc. is virtually getting a very valuable asset for nothing. The city negotiators were even willing to give Alectra the Hydro reserve cash but they declined.

And why not? They just got the whole enchilada for Pesos on the dollar.

Can you imagine this happening in a private corporation?

Those remaining eight councillors running for re-election will have to explain why, why did they fall for this grand theft Hydro?

It’s insulting and deplorable that in the new Working Together community report addition to the city website, the claim is made that city assets have increased by $13 million and the debt has been paid down by $24.4 million.

It only goes to prove that there is a sucker born every minute. Only we are the suckers who have experienced the malfeasance of those councillors who approved this deal.

In my opinion, there is strong evidence that this is a major cover-up that has the odor of conspiracy to defraud the citizens of a valuable asset to settle the mismanagement of the previous administration.

I believe there are grounds here to have an investigation by the Ontario Attorney General to determine if there is evidence of a crime being committed.

This isn’t going away.

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Only four days left to intervene in the merger of Guelph Hydro and Alectra Utilities by the Ontario Energy Board

Breaking News: As the April 30 deadline approaches regarding the Guelph Hydro merger, we have been accepted as an intervener in the OEB process. We are publishing our letter and arguments against the merger for citizens to view. Please use whatever parts and send a reques to the OEB to be named as an intervener. It is our last chance to stop this application or at the least, delay it until a new provincial government reviews the application. GB

John T.F. (Gerry) & Barbara M. Barker

271 Riverview Place

Guelph, ON N1E 7G9

Ontario Energy Board

300 Yonge St.

27th floor
P.O. Box 2319
Toronto, ON M4P 1E4

April 16, 2018

Re File: EB-2018—0014

Request for intervener status re the file EB-2018—0014

We are 15-year residents of the City of Guelph and customers of Guelph Hydro and are property taxpayers.

We urge the Ontario Energy Board to order an oral hearing of this application based on the “No Harm” test. Evidence of this came last Friday when ther OEB released a summary of the proposed merger of Alectra Utilities and Guelph Hydro Electric Systems Inc.

  • The purchase by Alectra Inc. of all the issued and outstanding shares of Guelph Hydro Electric Systems Inc., held by Guelph Municipal Holdings Inc.

By way of explanation, Guelph Hydo is a financially sound profitable division of Guelph Muncipal Holdings Inc. The Corporation has a sterling record of service and performance. GMHI is a wholly owned subsidiary of the City of Guelph Corporation.

In order to make our arguments clear, we have attached a recent report on why and how this happened.

Our principal objection lies in the conduct of a city appointed committee known as The Strategies and Options Committee, that conducted almost all of its business in closed-sessions. The public finally was informed 12 days before the council meeting to approve or disapprove the Alectra proposal to merger. This document was 245 pages long and only available online with the exception of a few hard copies that were downloaded. We were fortunate to receive a hard copy.

To us this represents the height of suppression of the public’s interest. On December 13 there were 22 delegates speaking just five minutes each, expressing their reasons for opposing the merger. In addition the City Clerk reported a protest petition of 76 residents.

There were seven representatives of Alectra that addressed the meeting. Council approved the merger in principal six hours later by a 10 to three vote.

Thank you,

John and Barbara Barker

*            *            *            *

Attachment – Edited from the post on guelphspeaks.ca, April 14, 2018

Updated HED -We have just five days left to intervene in the Guelph Hydro-Alectra merger deal now at the Ontario Energy Board

By Gerry Barker

April 16, 2018

Since last November, guelphspeaks.ca has questioned the merger between Alectra Inc. and Guelph Hydro. The proposal by the Strategies and Options Committee (SOC) was railroaded through council despite opposition from 22 delegates to council opposed to the proposal plus 76-email protests sent to the city clerk.

None of it mattered, as council approved in principal the merger agreement by a 10 to 3 vote in the early hours of the morning. That was December 13, 2017.

I have been informed that Alectra and Guelph Hydro submitted a written agreement to the Ontario Energy Board, (OEB) for final approval. A statement followed this that the details would be produced in the local Tribune twice-weekly paper. This week there was no such statement in the paper.

Also, the publicly paid “City News” carried in the Tribune had zero information, not even a news story explaining the merger application details.

Do you really believe the people affected have “Your Say” in this?

After all these months the truth is out. Before going into the details, it is important to remember, this merger was concluded in many secret, closed-session meetings that ignored the real feelings of the 55,000 Guelph Hydro customers. The December Hydro bills contained a small biased insert just days before the council vote.

They were never told the truth about how it would affect them.

The OEB has received a request from Guelph Hydro and Alectra Utilities to submit a written application to approve the merger. The OEB has acknowledged receipt of the request.

So, here’s the current situation. We have just 14 days remaining to intervene and request an oral hearing with the OEB in which citizens, registered as interveners, can state their views,

If not, the OEB will accept the written submission of Alectra and Guelph Hydro and make a decision between the next six and 12 months.

After April 30, if we do not intervene, as is our right, the merger could be approved by the OEB.

This Mergers and Acquisitions program (MAADS) was initiated by the Kathleen Wynne government’s ‘recommending’ absorption of small to medium sized community owned hydro distribution systems to create efficiencies.

This opened the floodgate for large power distribution corporations to fatten their portfolios at little capital cost or debt.

By June 7, that policy may be history with a change in government.

The rush here by Alectra-Guelph Hydro is to ensure its proposal is “grandfathered” regardless of the outcome of the election.

The OEB has invited interested parties to “Have Their Say” stating that is their right. The Board has stated that there are two types of applications:

A written application has already been submitted and an oral application in which members of the public can present their objections to the application by Alectra Utilities and Guelph Hydro.

But here’s the catch: “You can become an active participant (called an intervener). Apply by April, 30, 2018 or the submitted written hearing will go ahead.”

That seems clear enough but why did it take more than a month to reveal the written merger agreement that was received by the OEB on March 7, 2018?

Why did the City Solicitor, Christopher Cooper, side step my request in early March when requested, for a status report on the final agreement?

So the people directly affected by this merger agreement have just 14 days to apply for an intervener status at an OEB oral hearing.

Finally, here is the evidence that our Guelph Hydro Electric System is being given away with no cash consideration in exchange for a tiny 4.63 per cent of only 60 per cent of Alectra Utilities’ profit. This corporation is a division of Alectra Inc.

It doesn’t take rocket science to figure out that our citizen-owned power distribution system, serving 55,000 customers, worth an estimated $300 million, is being exchanged for a tiny slice of Alectra Utilities’ profits. Is this what the Wynne Liberals were counting on?

As activist, taxpayers and communicators, we want an open administration, accountability, and transparency in our city government. It was promised in 2014 but never delivered. We can charge city council for allowing this deal to reach this absolute level, the last line of defence, public participation.

Here is a capsule of the terms of the agreement as published by the OEB:

“Alectra Utilities Corporation and Guelph Hydro Electric Systems Inc. have asked the Ontario Energy Board to approve:

  • The purchase by Alectra Inc. of all the issued and outstanding shares of Guelph Hydro Electric Systems Inc., held by Guelph Municipal Holdings Inc.
  • Transfer of Guelph Hydro Electric Systems Inc.’s distribution system to Alectra Utilities Corporation • Transfer of Guelph Hydro Electric Systems Inc.’s generation licence and rate orders to Alectra Utilities Corporation
  • Amendments to Alectra Utilities Corporation’s electricity distribution licence to include Guelph Hydro Electric Systems Inc.’s service area

The applicants say that the proposed amalgamation is expected to deliver savings to the customers of both utilities and that the rates of Alectra Utilities Corporation and Guelph Hydro Electric Systems Inc. will remain separate until 2029. The applicants also say that the costs of the proposed amalgamation will not be funded by ratepayers.”

Let’s dissect the terms as acknowledged by the OEB.

Whopper #1

Comment: First, it states this is a ‘purchase’ of all the issues and outstanding shares of Guelph Hydro Electric Systems Inc., held by Guelph Municipal Holding Inc. (GMHI).

It does not reveal the truth of the value of GMHI including shares that blew through more than $60 million of shareholder funds (the people of Guelph) and its shares are essentially worthless without Guelph Hydro.

So, what is Alectra paying for these worthless GMHI shares? More importantly, who winds up owning the title of the Guelph Hydro Electric Corporation? It appears so far, it won’t be the owners.

This GMHI information is confirmed by the independent audit by the accounting firm KPMG in which the GMHI audited consolidated statement showed the shareholder equity was worthless. But GMHI did control the financially healthy Guelph Hydro Electric Systems Inc.

This take-over of Guelph Hydro made by the former GMHI board of directors, chaired by the former mayor, posed a serious financial problem for council.

There are two assets helpd by GMHI: The Guelph Junction Railroad and Guelph Hydro.

Guelph Hydro represented a solution and became the bargaining chip to get out of that GMHI multi-million dollar debt.

This is how the merger cover-up began. The deal was not about Guelph Hydro, it was about the city administration divesting itself of an asset to get that $60 million GMHI deficit off the city books.

That’s why in February 2017, the Strategies and Options Committee removed the option of selling Guelph Hydro. This opened the door for this terrible deal to give Guelph Hydro away for a pittance and in one stroke clean up of the GMHI balance sheet for which the city was responsible.

The key word in this description of the take-over is Alectra assuming all the “issues” surrounding not only Guelph Hydro but also its ‘controller’ GMHI.

Here’s Whopper #2

The submitted agreement states that Guelph Hydro’s distribution system is “transferred” to Alectra Utilities with no apparent cash consideration. Guelph Mayor Guthrie keeps saying that nothing is being given away. Well sir, you’d better check the agreement you and Alectra have already submitted to the OEB for approval. This isn’t about semantics it’s about real money

Nowhere in this agreement summary released by the OEB does it mention the $18.5 million special dividend that upon approval will be paid to the city. This dividend is already the property of the citizens of Guelph. It is part of the $22 million cash reserves stated in the 2016 Guelph Hydro audited financial statements.

There is nothing more insulting than to be told the city is receiving the dividend that is nothing more than a subterfuge to disguise what is really happening. Our greatest asset, Guelph Hydro, is being sacrificed to cover-up the mistakes of the previous administration and current Guthrie administration

Now we know why this terrible deal, masquerading as something best for the 55,000 Guelph Hydro customers was conducted behind-closed doors to suppress public participation. The use of phony surveys, misinformation and town halls attended only by a handful of supporters to bolster the case, witnessed spending $2.36 million to sell the proposal to the public.

Oh, the agreement states that the ratepayers will not fund the costs of the proposed amalgamation.

Was the OEB board informed before publishing this agreement summary that the citizens of Guelph have already spent $2.36 million to fund this deal and sell it to the ratepayers?

Here is more about the agreement now registered with the OEB.

“The applicants say that the proposed amalgamation is expected to deliver savings to the customers of both utilities and that the rates of Alectra Utilities Corporation and Guelph Hydro Electric Systems Inc. will remain separate until 2029. The applicants also say that the costs of the proposed amalgamation will not be funded by ratepayers.

That’s Whopper #3

Your application to intervene should include the following as it applies to your feelings about the merger agreement:

“In assessing the application, the OEB will apply what is called a “No Harm Test”. This means that the OEB will be considering whether customers would be harmed from the perspective of rates, reliability and quality of service in a merger. To pass the No Harm Test, evidence must be provided that rates and service levels would be equal to or better than what they would have been without a merger.”

Well, we now know as revealed by the OEB release, that great harm has been done to the owners of the Guelph Hydro power distribution system such as losing ownership and control.

* The assets are being turned over to another operator with no encumbrances, who have made promises to provide equal or better rates and services, jobs and a green technology centre to be set up in the Guelph Hydro headquarters facility.

* We will lose 30 to 50 jobs if the agreement is approved and the green tech operation will have a staff of ten.

How can the OEB approve an agreement in which a financially sound and dividend paying corporation is being given away? It’s a win-win for Alectra Utilities because the former Guelph Hydro will still supply those dividends that Alectra will be required to pay GMHI. It’s just under another name.

We respectfully urge the OEB to order an oral hearing to give the stakeholder’s an opportunity for the board members to understand how our excellent Guelph Hydro that has served us so well over the years is being given away.

Perhaps, the truth of how and why this merger agreement was created and executed can be questioned and find it is not in the best interests of the owners of the utility.

Please, Do No Harm.

 

 

 

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