Tag Archives: Sleeman Centre

What were they thinking when they cut a new deal with the Guelph Srorm?

By Gerry Barker

July 27, 2016 (revised)

This week Mayor Guthrie announced that the Guelph Storm junior hockey club would remain in Guelph for another ten years.

I’m a hockey fan but this deal has the strong odour of an inside deal.

Here’s the financial skinny.

Deputy Chief Administration Officer (DCAO) Colleen Clack told a citizen recently that between 2011 and 2015, the taxpayers subsidized the Sleeman Centre averaging $249,000 a year.

Why under her responsibility as General Manager of Tourism and Culture, was she responsible for managing these two facilities? According to her own figures, the River Run Theatre is losing more than $531,000 annually and the Sleeman Centre is losing $249,000 each year. That’s $780,000 a year! Now that was under the old contract signed by the previous owners of the team and was honoured by the new owners. Now remember, this building is owned and managed by the city.

We the public have no idea of the terms of the old Storm contract or details of the new one. We can tell you that three individuals own the team with the chairman, Rick Gaetz, who also is chairman of the Ontario Hockey League (OHL) executive committee.

It would appear that Ms. Clack, as lead negotiator for the city, agreed to lower the percentage of the city’s share of receipts. This was because the team owners said that the financial arrangement with the city was one of the costliest in the 20-team OHL. Was this a case of the lambs being led to the slaughter?

Again, no figures were produced to confirm this claim. There was no business plan presented to council, just a request to lower the city’s share of the revenues. Council approved the new deal. Again, the public was not informed of the details.

Why are we in business with a hockey team?

Why is this a shared revenue deal at all? As Mayor Guthrie said “We are the landlord and the Storm is a tenant.” Under that definition, the Storm should pay a negotiated lease payment amount for use of the Arena. The city has no business participating in the operation of a privately-owned major junior hockey club.

Why should the citizens be expected to subsidize the hockey club through this sharing of receipts or revenue? Because under the sketchy details of this deal, we are subsidizing the team.

Bottom line, if the Sleeman was losing $249,000 under the former agreement and has agreed to take a lesser part of the revenue pie, doesn’t this increase the amount of losses the Sleeman generates each year?

This is one of the oldest ploys in the book. Threaten to move the team and everyone on council goes into a funk. It went from a business decision to an emotional one in a nano second. Once again, the city comes out the loser. But do members of council get complimentary seats and VIP perks? Just wondering.

But there were Storm supporters claiming the economic advantages that the Storm allegedly brings to the city. It’s an interesting take with no measurement of the actual economic affect on the actual cost of running a city of this size.

For every dollar of revenue that is removed there has to be a truthful explanation as to how it affects the citizens. Does this deal benefit the majority of residents? Or is it just the owners of the team? The players are reported to be paid less than minimum wage

The fact that the building is shut down for three months in the summer adds more cost to the taxpayers. Why should the Storm occupation of the Sleeman Centre receive a 12-month deal when it is used, depending on reaching the OHL playoffs, for just some nine months?

In five years, there has been no attempt by the city administration to seek other users of the facility to help pay for maintenance, staff and operational costs. Why doesn’t the administration tell us how much the taxpayers must now pay to keep the Storm in town?

We’re already subsidizing the River Run Theatre across the street to the tune of $531,000 each year. Or take Guelph Transit that is subsidized by the taxpayers of some $15 million a year.

Is this what Coun. James Gordon refers to as an investment? He should understand the difference between capital costs and operational cost. These are only two examples of bad decisions that reduce revenues and reflect emotion rather than practicality.

You cannot run a city by spending money that has little or no benefit to the majority of citizens. This is one reason how the city has got itself in such a financial mess.

Reserves have been drastically depleted due to bad judgment and responsibility. The Community Energy Initiative cannot service in its present configuration without further investment. The administration has acknowledged it will require another $60 million to upgrade the two District Energy Nodes to meet future financial and performance obligations.

Coincidence or did they place an order before the deal was approved?

Yet eight members of city council voted to run the money-losing District Energy Nodes “as is” without further investment for another eight months to prove, what?

The same day, July 18, council approved the “as is” option of an eight-month extension of District Energy, Guelph Municipal Holdings Inc (GMHI) and advertised for a “Business Advisor” on a one-year contract to work for GMHI.

This council vote was held close to midnight, July 18, so the ad for the Business Advisor had to be placed before council approved the extension.

This is an outrageous and deliberate attempt to keep the District Energy Nodes alive despite the findings of the Deloitte consultant’s three recommendation options. Council voted earlier in the session not to proceed with Option three which was to continue operating the District Energy Nodes with more financing to make it viable.

This runs counter to the terms of the District Energy proposal “as is” option that stated there would be no further investment in the project. One would presume that includes adding to the staff.

It is now apparent that these two deals were cooked up behind closed-doors, without any public input or consideration.

We have a Frankenstein council, with the majority obsessed with holding power, controlling us, with most of the majority not understanding for that of which they are responsible. So they depend on the judgment of senior staff. Shades of Urbacon and generally most councillors vote as they are told!

An atmosphere of incompetence pervades our city leadership. It acts like a boil that we keep picking at until it festers.

The mother of all leaks

Mayor Cam Guthrie is chairman of GMHI. Yet the advertisement for a GMHI Business Advisor was posted during the day, hours before the council decision to accept the “as is” option around midnight.

But here is the question: Mayor Guthrie voted against the motion to accept the “as is” option. Is it not strange that the chair of GMHI was unaware of the staff posting to add another GMHI employee, hours before council approved it?

The action by staff illustrates why city council is disfunctional. That decision to post for another GMHI employee was apparently made without the knowledge of the Mayor. Someone in the administration, staff or elected members made that decision knowing full well the council would vote for it that night.

There were three votes that night. The first was to receive the staff report based on the findings of the Deloitte consultants containing three options, 13-0. The second was to continue the “as is” option, 13-0.

The third vote was 8 to 5 with all members of the Bloc of Seven plus Coun. Bob Bell voting to include a city-wide CEI and District Energy strategy presentation no later than Q1 of 2017. Only Mayor Cam Guthrie, Councillors Christine Billings, Dan Gibson, Andy Van Hellemond and Mark MacKinnon voted against the motion. The fact remains that this vote confirmed extending the DE operations for another eight months.

There will be more on this later. It is a complete breakdown of the public trust and the person or persons who perpetrated it should be fired or resign.

But hey! We have a junior hockey team for another ten years but we’ll never know the cost

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Noted on returning Guelph’s administration to common sense and sensibility

By Gerry Barker

June 20, 2016

The rapid changeover of senior management of our city staff indicates that there will be a return to responsible management or will it more of the same?

It is now well established that there have been many instances when public money has been wasted and money-losing operations rampant throughout the city.

Two city icons of sports and the arts, the Sleeman Centre and RiverRun Centre are examples of where your money is being wasted.

Coleen Clack, the new Deputy Chief Administrative Officer, (DCAO), is now in charge of operations, replacing newly minted CAO Derrick Thomson. Ms. Clack was formerly general manager of Culture and Tourism, the department in charge of the two city-owned facilities..

In response to a query by Tim Girouard, July 18, 2014, Ms. Clack said the two city-operated facilities were budgeted to lose $780,801 in 2014. The RiverRun lost $531,440 while the Sleeman lost $249,361. Operational budgets are not available for years 2015 and 2016. Regardless, it now is apparent that these losses, paid by the taxpayers, are the rule and not the exception.

The problem of course, is how long have these two facilities required a substantial subsidy to remain open? The main client of the Sleeman Centre is the privately owned Guelph Storm junior hockey club. There is little attempt by management to utilize the facility that is manned by full-time staff. In fact, the ice is removed for three months in the summer and the staff are either laid off or redeployed to another city position.

The city has not revealed the terms of the Storm contract. One curious aspect learned is that the advertising revenue on the time clock, is retained by the hockey club. The clock was purchased by the city in 2010 based on the demand of the team allegedly to match the facilities in other arenas where the Storm played. The $75,000 new clock replaced a perfectly operating time clock. Further, it was paid out of the 2009 federal/provincial/ municipal infrastructire fund to create jobs after the financial collapse in 2008.

In her reply to Mr. Girouard, Ms. Clack said to track usage of the RiverRun Centre was measured in “event numbers.” She stated that the number of events average over the previous three years averaged 436 per year.

So here’s how that works: One event counts as a single space use for one day. Single space means only one of the two theatres is used. When two theatres are used in a single day, that counts as two events. David Mirvish, where are you when we need you?

That is how the cost of operating the RiverRun Centre is calculated, not revenue collected at the box office. How do these “event” days have any bearing on managing the facility? The basic costs of opening the doors every day, promotion of productions, salaries and benefits, insurance, maintenance, fees and taxes, depreciation and performer’s fees. These are the basic considerations when preparing a budget. Then, how many days are the theatres dark?

Obviously, in four years there has been little change in increasing revenue and reducing costs. It just became too comfortable letting taxpayers to pick up the annual tab of more that $500,000.

In the case of the Sleeman Centre, Ms. Clack says the administration calculated the annual loss as $249,361. She adds that they use 3,000 hours of use as the base for budgeting. Let’s see, there are 8,760 hours in a year. Let’s knock off 2,529 when we all asleep (8 hours a night). That leaves 5,840 hours. When reducing that by the three-month shutdown and statutory holidays, (100 days) we are left with 3.490 hours. That’s a 17.1 per cent overage from the 3,000 hours used by the administration tocalculate the cost of operation..

The question is, was the three months of closing the Sleeman Centre each summer part of the $5.7 million instalationof the District Energy plant to provide power to the grid and heated water via a thermal energy exchange network downtown?

Is this more Farbridge voodoo financial planning?

How this makes sense in preparing the annual budget appears to be accepted by staff and the Farbridge dominated council for at least four years.

Multiply the admitted total annual subsidies to the two facilities by the average of just a four-year span, 2011 to 2014, and it totals $3,123,2014.

By her own admission in July 2014, Ms. Clack revealed these details and did not question why this was the consistent case or what should be done to reduce the annual liability of these two facilities.

In my opinion she was snared in the Farbridge web of wasteful spending, mismanagement and special treatment of the mayor’s friends.

We can only hope that Mr. Thomson, Ms. Clack, Scott Stewart, the new, yet to be named, Chief Financial Officer, and Mark Amorosi start cutting costs to return an open and transparent government to the people.

There are five pillars of change that the new senior management team needs to adapt to return the public trust and fiscal responsibility.

Finance

* Improve budget forecasting; report the city financial status to the citizen’s, quarterly.

* Commence restoring the depleted reserve funds

* Staff to recommend a workable restrained spending budget and stick to it.

* Avoid political influence by certain members of council – always remain neutral.

* Involve the public when planning the budget.

* Streamline financial reports to allow the public to understand the documents.

* Ensure that Council receives a monthly financial statement of city operations.

* Restrict travel and membership expenses.

* The new CFO to have carte blanche to investigate all department budgets.

* The 2017 budget to emphasize updating the city infrastructure.

Governance

* Review procedural bylaws allowing councillors to participate without fear of        retaliation.

* Cancel the Integrity Commissioner’s contract.

* End the council’s closed sessions by only being used for the basic reasons such as union contract bargaining, real estate negotiations, and personnel discipline issues.

Open the city administration to open and transparency of doing the city’s business.

Communications

* Cancel the city advertising in the MercuryTribune with the exception of legal notices.

* Rebuild the city website to make it more accessible and organized to serve the public.

* Reorganize communications to integrate facilitation of the Internet and social media.

* Publish minutes of committee and council meetings within 24 hours on the city web site.

* Set up a graphics and video team to improve citizen comprehension.

* The mayor holds a monthly media conference to comment on city business.

Political

* Council committee to select members of a consultative Mayor’s Citizen roundtable.

* Reset the membership of committees and board memberships of councillors.

* Appoint June Hofland to permanent staff position to coordinate external meetings.

* Hold a ward three bye-election to replace Ms. Hofland.

* Conduct an off-premises council retreat without staff or advisors to resolve differences.

Operations

* Conduct a study of effective manpower use and overtime costs.

* Conduct overviews and cost reduction measures with Guelph Transit management.

* Survey all first responder services on improving efficiency and management.

* Review Service Guelph operations to improve service and citizen needs.

* Open city hall to the public and access to all departments.

With respect, a lot of this will take years not months, to accomplish. The cue is for council to focus on serving the needs of their constituents. This is accomplished by dropping the political baggage that had created a cultural of waste and mismanagement. Worse, it has created a dysfunctional council that the new senior management team will attempt to turn toads into frog’s legs.

We wish them Godspeed.

 

 

 

 

 

 

 

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