By Gerry Barker
January 28, 2019
Editor’s Note – Before launching into another overview of unvarnished civics reports on the management of our city, I urge everyone to read and absorb the history on which I have been reporting and commenting since 2011. The administration is in charge of our $500 million corporation. But who is really running the show?
Susan Watson, the high Priestess of the Left-leaning coalition of power figures controlling our city administration. In a letter to the media, she says: “We all care about our property tax bills.”
She then adds that we should all care about impending increased changes to the development impact by-law updating currently before city council.
Three guesses as to where this is going.
She urges readers not to believe the ‘old’ slogan that, “Growth will pay for growth.”
However, before we consider her statement that in the next ten years, citizens will subsidize development in Guelph at an estimated rate of $5 million a year or $50 million. Those figures come from Tara Baker, the city’s General Manager of Finance and Treasurer.
Ms Watson claims that in the past five years taxpayers paid $21.5 million to subsidize development in the city.
There seems to be a difference here between the city staff manager, responsible for all things accountable is projecting in public administration. Susan Watson’s recent five-year analysis of taxpayers subsidizing development does not agree with the Financial GM’s forecast.
None of these figures define ‘development.’ For example, do the figures include city development projects or are these Ms. Watson’s personal political views?
Are development impact fees charged to the Wilson street five store parkade the city is building across the road from City Hall? That’s a $22 million project.
That cost has been declared as part of the estimated $350 million renovation of the Baker Street project announced before the civic election won by Mayor Guthrie. He said a deal has been struck between the city and Windmill Developments based in Ottawa. It is called a 3P or Private, Public Participation Plan. Whoops that’s four P’s.
This apparent proposal won’t start until 2024 and take at least five to six years to complete. The joker is what is the city’s capital share of this and its public liability? What is the estimate of revenue including taxes and, wait for it! Developments fees?
Some may believe it is heresy regarding city-managed projects to dredge up some of the spectacular management failures in the past 12 years.
Here’s a run down of some of the historical failures:
* The organic waste processing facility costing $34 million of taxpayer’s money and the public does not have access to the organic mulch by-product. It was so overbuilt to handle Guelph’s wet waste that it depends on Simcoe County and the Region of Waterloo for feed stock to keep the joint operating. To top it off, a subsidiary of the company that built the facility, operates it through a subsidiary corporation and sells the finished compost. Details of this arrangement have never been revealed to the people who financed it.
Would you agree this information is in the Public Interest?
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* Along came the new city hall construction. In 2006, city council approved a contract for $42 million. In 2007, a new council took over and by September 2008, booted the general contractor off the job. The contractor sued the city for $19 million and six years later, a Superior Court judge ruled the city responsible for wrongful dismissal. The overrun cost of the entire project was $23 million.
Why did a lawsuit outcome fail the interest of Public Interest?
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* The $34 million police headquarters renovation will not be completed until next December. This is a city-managed project and so far it is on schedule to avoid cost overruns coming in at contract cost. However, experience dictates that missing the 2018 completion date indicates possible cost overruns.
* The greatest city mismanaged failure was the five-year record of Guelph Municipal Holdings Inc. (GMHI) led by former mayor Karen Farbridge and aided by her former Chief Administrative Officer, Ann Pappert, who had the dual responsibility as Chief Executive Officer of GMHI.
The real cost of this multi-tasked attempt to create self-sufficiency in power supply and a geo-thermal heating and cooling water system to a small collection of nearby buildings. These include the city- owned Sleeman Centre, River Run theatre and Hanlon Business Park. The only information about the cost of this operation was stated in a consolidated audit of GMHI conducted by accounting firm KPMG
There was a shareholder’s liability of $63 million. That’s a loss to taxpayers in any language.
Was GMHI shrouded in closed- sessions in the Public Interest?
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Does Ms. Watson object to private enterprise and its role in creating housing both affordable and upscale? Or is it another undocumented scare tactic to reflect her ongoing anti-Conservative campaign to discredit the likes of Mike Harris and Doug Ford?
Susan, look back to the future
Ms. Watson should go back 12 years to examine the track record of former mayor Karen Farbridge and close friend who was supported financially in the three elections.
The Farbridge administration thatran the city for eight years was no slouch in cutting deals with private developers. These include Tricar developments that received deferred development fees in construction of two high-rise condos. There were others given deferred development and deferred property taxes to build housing, particularly in the downtown area.
These deferments were covered by transferring funds of the Brownfield reserve fund valued at more than $30 million. One of those sites was the former LaFarge cement manufacturing plant, east of the Hanlon, south of Paisley.
The funds were set aside to clean up contaminated sites that needed remedial action to remove dangerous elements in the soil.
That Brownfield reserve transfer was done to limit the annual property tax increases and deferred development charges that would impact the city budgets over the years. Again, details of these deals have not been revealed.
But there is more
But the biggest flop of the Farbridge administration was the Guelph Municipal Holdings Inc. The audit of this project by accounting firm KPMG, revealed shareholder’s loss (the citizens of Guelph) was some $63 million. The details of this were published following council meetings May 16, 2016 and mid-July 2016.
This audit showed the costs of creating self-sufficiency in power and a geo-thermal underground system providing hot and cold water supplied to a few city-owned building, a church and two large high-rise conco towers near the Sleeman centre.
The Guelph Hydro giveaway
Then the new council, in 2017 voted to merge Guelph Hydro with Alectra Utilities.
I remain convinced it was a terrible deal because the only thing citizens received was return of its own money. The surplus of Guelph Hydro cash of $18.5 million, that’s our money, is about to be returned to the city. Also, the city is to receive a 4.36 per cent share of 60 per cent of the Alectra Utilities profits.
Breaking news! In 2019 the city, according to budget documents, will receive a dividend of $1 million from Alectra Utilities.
So, why was it merged with Alectra when Guelph Hydro was sending an annual dividend to the city of $3 million?
The administration’s war on fossil-fueled vehicles
The reconfiguration of major city streets is another alleged development of reducing the use of fossil-fueled vehicles. In fact, the opposite has occurred as traffic congestion has substantially increased due to the shrinkage of traffic lanes on major streets to accommodate bicycle lanes.
The cost of this abortive attempt to cut emissions is in eight years: Council has spent some $300,000 annually on bike lane development. Included also was $2 million received for special bike lanes on Stone Road as part of the 2009 infrastructure program of the provincial and federal governments. Oh yes! That also included spending $75,000 on a new time clock in the Sleeman Centre. That replaced one that was working well.
What in hell has that to do with infrastructure?
Added up, there were millions spent on projects described first as optional, but the Farbridge administrations were determined to adhere to climate change and environmental projects to achieve their dream. As usual, citizens picked up the tab.
I do agree with Ms. Watson about private developers paying the costs of connecting to city roads, water and sewer lines, power distribution and public safety facilities, to name a few. But I remain confused about the financial status between private and public development.
Property taxes spiral because of kitchen table accounting
We have just gone through 12 years of council and support staff that have strayed off the reservation.
The good news is there are some moves made to install experienced money managers who can re-focus and concentrate on fixing the infrastructure and freeze the mega projects such as Innovation Guelph Reformatory lands plan and the Baker Street renovation.
Reducing overhead operating costs, debt, pie-in-the-sky projects and maintains services are more important than ever.
How do you get out of the hole, stop digging.