Here is the 13-year pathological destruction of democracy practised by two city administrations

By Gerry Barker

July 22, 2019P

Opinion based on facts

This Guelphspeaks seven-part series is copywrite 2019

The following is a seven-part series on how two city administrations have embarked on spending public money on projects that lost an estimated $320 million and have nothing to show for it.

Today, we begin with the outlines of the seven part series, plus the introduction that I call the pathology of 13 years of secrecy, mismanagement and cover-ups leading to a moral and financial disaster.

Alectra Utilities, the bidder on the merger with Guelph Hydro, targeted the gullible Guthrie administration with promises, public relations and guidance.

I know the price of public dissent and what lengths this council and the previous Farbridge administrations would do to prevent or muzzle any criticism or negative commentary.

The result has been dictatorial and managed usung a cloud of secrecy denying the public’s right to participate, adhere to accountability and transparency. You will read later of what and how they did it.

We all shared the responsibility of this 13-year journey, at the public expense, because we elected a council whose membership failed to understand complex issues and the relevant costs to the public.

Nothing has changed. The present council allowed projects to take place without proper planning or adopting ego-driven compulsion to be the greatest and most advanced city in the world. The concentration of political power included promises that were not fulfilled.

Council promised cheaper electric power, elimination of fossil fueled vehicles from city streets, forcing developers to stop building detached, single-family homes and meet net -zero carbon in new developments.

The series will track how public money and assets were spent or given away.

This series is about how the destruction of democracy, and its mandatory accountability, transparency and open government in our community. It was used to block our right of public participation in municipal governance.

Let’s get started:

Starting Thursday July 25, Guephpspeaks will publish the first part of the series in seven posts that changed city administrations that, in part, wasted public funds and assets costing, at latest countn more than $145,000,000.

But it gets worse. The following is a collection of money spent that is separated into two parts: Confirmed Project’s costs, and a list of estimated cost, based on information that needs a professional audit to determine. It is noted that council approved spending more than $300,000 last year giving money away under the guise of a policy known as Wellness. City councils, over the years, have donated money to social and cultural causes but not on this magnitude.

The confirmed loss List

Urbacon city hall excess cost over contract – $23 million – Gone

City equity in Guelph Municipal Holding’s liabilities loss – $66 million – Gone

Guelph Hydro merger deal, book value in 2016 – $228 million – Gone

The estimated loses require an audit

Infrastructure biccyle routes and trails $7 million

Advertising and promotion spread over 13 years – $$10 million

Investment in Guelph Innovation Development project – estimated $4 million

The Organic Waste Processing Facility – $34 million

This brief list totals $372 million since 2007 or an average of $28,613,000 each year. It is only a partial list that does not include legal and consultant costs.

Oddly, when deducting the Guelph Hydro loss it comes to $145,000,000.

It only makes the Guelph Hydro merger with Alectra Utilities the worse deal ever made by the city.

This list contains some items that are estimated, as the data is buried in multi-page Financial Information Reports (FIR) submitted by the city annually, as mandated by the province in the last 13 years. This multi-page document is not generally available to the public.

Another method used by the administration to deter details of financial information from the public. The FIR is the only financial record officially released by the city. Quarterly summary financial statements are not sent to citizens. Along with other information council deems should not be made public, include the closed-session meetings in which the minutes are never made public. In two years, 2015 and 2016, council held 84 closed-session meetings.

Missing this analysis is how the reserves were emasculated to balance the books due to overspending annual budgets. In 2009, city councillor, Leanne Piper, claimed the city had reserves of some $77 million.

In 2016, BMA Management Consultant warned the reserves were reduced to a point that warranted a “red flag” as a result of council’s decision, using reserve funds to shore up its financial picture. In 2014, three unrelated reserve funds were withdrawn to pay for the Urbacon lawsuit settlement.

Flash from the past

Here’s a Guelphspeaks post published July 2012. The observations are a harbinger of what was to come and how council conducted the public’s business in the previous five years. It points out the dangers of dictatorial power that had already occurred under the Farbridge council majority, a supporting cast of senior managers plus unelected advisors to the Mayor’s council, Ken Hamill, retired executive and former councillor, and Cathy Downer, a present member of city council.

                      How our city administration derails democracy

When the underlying issues of a civilized society are endangered by a dictatorial and secretive administration, democracy, as we know it, vanishes.

It’s a natural instinct for those in power to withhold information that may reflect on their actions and management of the public assets.

Once in power, the tendency is to surround your self with friends and supporters who blindly follow.

One of the first tenants of political power is to control the message and give the appearance of serving the public stakeholders. Those controlling the agenda ignore disagreement and rejection of the controlling political organization’s policies.

This leads to anger and disillusionment on the part of the stakeholder, you and me.

So, thanks to a report by Carol Goar in the Toronto Star, here are three lessons to emphasize the theory of democracy discarded by those empowered.

Lesson One: Those with power – politicians, police and bureaucrats – don’t believe they should have to share that power. Basically, they dismiss the rights of citizens to share that power and don’t believe they have any role to play in their sphere of influence.

Lesson Two: Governments frequently slap pejorative labels on those who oppose and complain. Such methods are to use surrogates to attack those objectors labeling them as ignorant, dangerous, violent and out of touch.

Lesson Three: Citizens have to use the tools they have to keep democracy alive. These include solidarity, willingness to stand up to authorities and to reach beyond their own ranks.

How does that menu rank with what has been going on in Guelph for the past six years?

First, we have been governed by a civic dictatorship composed of a majority of councillors who, 99 per cent of the time, votes their own agenda. The opposition – in the first four years consisted of just two councillors. Since 2010, the opposition has grown to five councillors who have voiced concerns about the operation of the city government but are defeated most times when votes are held.

There is growing evidence that Mayor Karen Farbridge, the architect of Guelph’s public policy, along with a close-knit group of unelected advisors, has created a growing unrest among voters.

Democracy is no longer operative in this council.

The administration works in two parts. The mayor to carry out her agenda has handpicked the senior bureaucrats. Policy rests with the mayor and her advisors including former councillors Ken Hamill and Cathy Downer.

The Mayor is beholden and influenced by the Guelph Civic League although since the 10 Carden Street organization came into being that influence has diminished. Instead, 10 Carden Street is the stepchild of the Guelph Civic League. It received a $135,000 Trillium Foundation grant from the provincial government to provide “community services.”

This is a thinly disguised political action group dedicated to support the present Farbridge political organization.

The artful part is how the Farbridge crew has influenced and received support from a number of community and neighbourhood groups supplying public funding, support in planning and social issues.

The offshoot of all this is the vast silent majority of voters who are not united, knowledgeable nor organized to question or oppose policies advanced by the Farbridge political organization.

This has resulted in participatory democracy failing to acknowledge its majority rule.

For almost six years, the rule is by a tight-knit group of individuals who operate under the mantra of: “ it’s our way or the highway.”

Today nothing has changed, as you will read in future series posts. Still not convinced?

The ambition of this group has cost taxpayers millions in personal pet projects, dumb planning, excessive legal expenses and fiscal mismanagement aided and abetted by unqualified or absent individuals. Those elected people responsible for protecting the public interest and having sworn to maintain fiduciary responsibility. That means providing the checks and balances during their term of office

*            *            *            *

Ego is not a new breakfast dishost of the severe loss of capital and assets was due to ego-driven projects, poor planning, incredibly sloppy maintenance of city owned property and assets. Accountability and transparency disappeared.

This became a recipe for financial disaster. The turmoil at the top of the professional staff contributed to the waste of public money. The firing of Urbacon Buildings Group Inc., general contractor of the new city hall, cost an additional $23 million over the original budget of $42 million. The case took six years to settle the lawsuits and disruption of operations.

This series will present the litany of losses and impact on the municipality over 13 years. There is evidence that rules were bent to accommodate projects in which the public could not participate. Frequently, the news media rarely questioned the motives of the administration when the public business was conducted in closed sessions.

It is the intention of Guelphspeaks to send copies of this series to the Minister of Municipal Affairs and Housing, Attorney General and Ombudsman.

Here are the seven parts of the exclusive series only available on guelphspeaks.ca. As usual, your comments are welcome

Part One         Where well-meaning people of community stature got it all wrong

Part Two         How the 2007 Community Energy Initiative plan           steered Guelph  down the financial rabbit hole

Part Three      An irreparable spite increased the cost of the new city hall by  $23 million

Part Four –    Guelph Municipal Holdings Inc. covers-up losses of $68.3 million

Part five         The city gave Guelph Hydro away ignoring questions    about the deal

Part Six         City councillors were targeted to give away the $228 million Guelph Hydro to Alectra Utilities

Part Seven      Why the downtown Library and South End Recreation Complex   are endangered projects

The series starts this Thursday July 25.

 

Advertisement

Guelph’s financial operations are rooted in high staff costs and excessive spending

By Gerry Barker

Posted February 12, 2016

It’s the dirty secret that is driving up operating costs. So far, council refuses to tackle it or even listen to valid points describing the sorry state of financial management and the cost to the citizens.

It’s the untouchable cost of running a city after nine years of non-stop wages and benefits growing exponentially exceeding the Consumer Price index (CPI) by a country mile. Throw in the more than 500 new, full-time equivalent employees added in that time, and taxpayers are being forced to ante up every year to keep up.

The truth is that 80 per cent of the property tax levies goes to pay the city staff.

So when the staff submitted its estimate of the property tax increase for 2016 of 1.58 per cent to city council, it was a mythical, contrived figure that had little basis of reality. It’s the equivalent of the workers at Linamar telling the management how much they think it’s going to cost to produce car parts.

So they scare council’s majority, who support the nine civic unions, by saying the Guelph Transit fares are going up and weekend and holiday service will be reduced to save $1.5 million. Compared to the 2013 Guelph Transit overtime bill of more than $5 million, that’s chicken feed.

Oh, woe is me! Says Coun. Phil Allt who again, insists Guelph has to get cars off the road and only public transit is the answer. So the left-brain cramp of some members of council, is maintaining the “war on cars” that beats on.

It’s all part of the senior staff game to serve and protect … their interests, not those who must pay the bills. And there are a number of senior managers that don’t even live or pay taxes in Guelph.

In the past ten years, the growth of Guelph city staff exceeded the growth of our population by 85 per cent.

It’s not just occurring in Guelph

A report by the Canadian Federation of Independent Business (CFIB) says in part that: “We have been hearing about cities having a revenue problem, but it’s clear it’s a spending problem they are dealing with,” said Laura Jones, CFIB executive vice president.

The CFIB report states that a municipal employee in Canada is paid 22 per cent more than an employee in the private sector doing the same job.

“When you look closely, it’s easy to see employee compensation is the root of the municipal spending problem,” said Nina Gormanns, co-author of the report.

This report comes in concert with the Fair Pensions for All organization that has been warning municipalities, for many years of the risks of increasing the size of staff and the increasing benefits paid to those workers.

In fact, the organization presented a documented report to the former Farbridge council, indicating the growing pension liabilities the city was facing. It was ignored and a number of Farbridge followers ridiculed the findings.

The staff strategy to use Guelph Transit to reduce costs in 2016 instead of recommending staff reductions, backfired when the council majority of seven voted to reject Transit fare increases and service reductions.

City consultants warned of reserves depletion

The city recently commissioned a consultant report to review city operations.

The BMA municipal consultants are not unfamiliar with the way our city is being managed; having done a similar report in 2011 that cost $480,442 to complete.

This year’s report raised a “cautionary red flag” on the underfunded reserves. Those raided reserves have had little replenishment since the 2014 civic election as was promised by senior staff.

You cannot raid three reserve funds to pay a lawsuit liability of $8.96 million without a firm plan to pay the money back. In approving the 2015 budget last March 25, Coun. Karl Wettstein, the elder statesman of the Gang of Seven on council, made a motion to reduce the $900,000 scheduled repayment to the reserve funds to $500,000. That passed.

Councillors Wettstein, Leanne Piper and June Hofland were on the Farbridge council that witnessed the firing in September 2008 of Urbacon Buildings Group, Corp., the general contractor of the new City hall.

They have never accepted responsibility for that action that triggered a $23 million cost overrun of the project. For that matter, neither has the former mayor ever admitted any responsibility. The people understood and voted the mayor out of office.

The 2016 budget, approved December 10 included another 2.99 per cent increase of property taxes, plus user fees and more staff.

During budget talks, council buried a staff recommended 2 per cent, ten-year special property tax levy to pay for the city’s ailing infrastructure. It was kicked away to be discussed in the 2017 budget discussions next November.

The 2017 property tax increase prospect, next November, is that if the special levy is approved, plus the storm water levy, plus the 4.5 per cent water use increase, the annual property tax increase in Guelph for 2017 will be more than 9 per cent.

Transferring operational costs to debt can reduce tax increases. It is a glaring example of financial mismanagement that has been practised in this city for far too long. If we ran out lives the way this city is being run, we’d be bankrupt in short order. Swallowed by personal debt used to pay the bills.

Oh! Regardless, that’s what staff did this year.

And that folks, is just one of the reasons why Guelph’s operational and capital costs are 50 per cent higher than Kitchener and Cambridge. It’s why Guelph spends $28,000 per kilometer on road repair and rehab than the provincial average of $11,000. Bike lanes anyone?

These figures are extrapolated from the official annual Financial Information Reports filed annually by every municipality in Ontario to the province.

Figures don’t lie but liars figure…Go figure!

Maybe that’s why the city changed auditors this year.

 

 

 

The trip wire that plunged Guelph’s finances into disarray

By Gerry Barker

Posted January 9, 2016

We go back to August 2014 when, two months before the October civic election, then Mayor Karen Far bridge persuaded her council to spend $34 million on renovating downtown police headquarters.

The mayor and Coun. Leanne Piper, appointed to the Guelph Police Services Board (GPSB), were part of that board’s decision to accept a report by management consultants KPMG that identified the costs of the project.

Leading up to this decision, was consultation with then Police Chief Brian Larkin. He was the main advocate to raise the previous $13 million estimate accepted by council in January, to the KPMG estimate of $34 million.

During much of this process, Larkin was negotiating with the Waterloo Police Services Board to become chief. He announced he was leaving in early summer. As the GPSB is not empowered to finance the $34 million, it was the job of Farbridge and Piper to convince their colleagues to spend the money.

At the same time the mayor was facing settlement with Urbacon Buildings Group over the illegal firing of the new city hall general contractor. In September the city announced it had settled the lawsuit by paying Urbacon $8.96 million, at the time, Chief Administrative Officer, Ann Pappert said the settlement would not impact property taxes.

For Farbridge, it was expedient to get these two issues behind her as she was in a tough battle with Coun. Cam Guthrie, who was running for mayor. In mid September the Forum polling firm released the results of a poll that showed Guthrie was ahead of the mayor by 15 per cent.

By this time, the mayor’s campaign went into panic mode, as there was widespread criticism of the mayor’s leadership.

But there’s more to this story.

Two decisions approved by the Farbridge administration amounted to $42.960,000. The real costs of the Urbacon lawsuit rounded out to $67 million, or some $25 million over the original contract of $42 million.

Looking back at the police HQ project, the role of former chief Larkin who left August 31 being paid some $181,000 for eight months on the job, was amplified by his ringing endorsement of Mayor Farbridge. The Ontario Police Act forbids police officers to publically endorse municipal politicians.

On December 9, 2015, the deadline for bids on renovating the new police HQ was received. So far, the city has not revealed the winner of the contract or the cost of the bid.

The police acknowledged that it has taken almost a year to prepare the bid details and necessary changes to the original estimate. They estimated the work would be completed by mid-2018, another election year.

In its first year in office, the new council has levied some 6.95 per cent property tax increases for the years 2015 and 2016. In addition more than 4.15 per cent of operating expenses have been shifted to debt.

Then the report, generated by the staff, recommending a ten-year, two per cent property tax special levy to pay for needed infrastructure repairs and replacement, was quickly taken off the council table just before 2016 budget deliberations began.

A week later the Tribune reported the facts about the proposed special tax levy stating after ten years the total collected from taxpayers would be $285,000,000. Council shoveled the report to a city committee meeting in February for consideration in the 2017 budget.

What this means to the citizens is a shrinkage of services and property values. The city’s operations and capital spending are 52 per cent higher than either Kitchener or Cambridge. Ask yourself why?

When, during budget discussion, why did Coun. Leanne piper want to hire another arborist to join the staff of five already employed for looking after city owned trees? Or why do we need a municipal holding corporation that delivers a $1.5 million “dividend” annually to the city but loses $2.8 million a year?

Why did the city replace auditing firm Deloitte Touche and hired KPMG? (Reference police HQ renovation estimated by this firm that led to an increase of $21 million.)

As the saying goes: If it smells like a fish, it’s a fish.

 

 

 

 

Your GuelphSpeaks Weekender

By Gerry Barker

Posted December 13, 2015

How the people won the battle of 2014 but lost the war

We elected a dysfunctional council last year but now the traditional Councillor Christmas Party has been cancelled this year, the first year of their mandate.

What happened to civility, collegiality and good will among the members?

It probably was shattered the first meeting of the year when the majority of seven supporters of the progressive councillors elected, voted in their slate of committee chairs and board members.

In its first year in office, city council has increased property taxes by 6.95 per cent, the total for 2015 and 2016. That does not include the 4.12 per cent increase in water rates for 2016. The costs to the taxpayer is a 2016 increase of 7.11 per cent on the combines tax bill and water bill.

August 2014, the Police Heaquarters project

First, let’s review some history. Starting with a look back to August 2014. Outgoing Guelph Police Chief Bryan Larkin colluded with Mayor Karen Farbridge4 and Coun. Leanne Piper, the two elected councillors serving on the Guelph Police Services Board (GPSB). In January of 2014, the GPSB approved a renovation of the downtown police headquarters to cost some $13 million.

It became a crusade for better digs for the cops. Chief Larkin pushed for a more extensive renovation of headquarters. The GPSB hired project consultants and accountants, KPMG, to do a study that was used to convince city council to spend an estimated $34 million or $21 million more than the January estimate.

With an eye on the looming election, city council voted to spend the $34 million. There was no business plan, no detailed description of the work and no management plan of the staff moving to accommodate the construction. It was a manufactured rationale that was meaningless without the pertinent details to justify a $34 million acceptance.

About a week ago, Guelph Deputy Police Chief said the project completion was delayed until mid 2018 because detailed drawings and staff management had to be developed before asking for construction bids to do the actual work. On December 8, the bids had to be submitted to the city. This was more than 15 months after council approved the $34 million project.

Consider an inflation rate of 2 per cent times 15 months; the base additional cost of the project is more than $680,000 even before contraction begins.

Larkin has long gone to become Chief of the Waterloo Regional Police Service. Karen Farbridge was defeated in the October civic election. That leaves just Coun. Leanne Piper as the only survivor of the day council’s GPSB representatives sold city council on paying the estimated $34 million bill, the real cost of which has yet to be determined.

If this doesn’t smell like a replay of the $23 million cost overrun, building the new city hall, then perhaps we’re just being either cynical or naive.

September 2014, the Urbacon $8.96 million settlement

The second item of history lies with the settlement, announced in September 2014, paying Urbacon Buildings Group $8.96 million following the new city hall contractor’s $19.2 million lawsuit. Following the bouncing ball, the total overrun of the project zoomed from $42 million to $65 million.

The overrun was the direct responsibility of the Farbridge administration.

Both the police HQ and Urbacon settlement total capital spending is $57 million, before the 2014 election.

The city does not have $8.96 million lying around, let along another $34 million. Chief Administrative Officer, Ann Pappert, said the settlement would not impact property taxes and the reserves would be replenished by paying $900,000 a year for five years. That was the staff plan to pay just half of what the settlement cost the reserves.

When the 2015 budget was approved in March this year, Coun. Karl Wettstein moved that the replenishment of the three unrelated reserve funds that were raided to pay off Urbacon, be reduced from $900,000 to $500,000. It’s called kicking the ball down the road for someone else to catch.

He further said that the city staff prepare a revised reserve repayment plan for 2016. More kicking the ball down the road. The city’s operations review, carried out by BMA Management Consultants, noticed this reserve funds depletion, exacerbated the growing problem of under-funded reserve. The warning expression in their report was: “Cautionary Red Flag.”

Addressing Ms. Pappert’s assertion that property taxes would not be affected by the Urbacon settlement, it turns out we are paying 30 per cent higher property taxes in 2015 and 2016 than we did in 2014.

But here’s the truth. The city staff, led by Ms. Pappert and her Deputy CAO, Mark Amorosi, did not recommend any revised Urbacon reserve repayment plan in the 2016 budget, as instructed by Coun. Wettstein. So, how are they going to pay it back?

Nor there is no mention of the impending Police HQ renovation capital costs and the impact on the city’s 2016 capital budget.

Is it any wonder that there is a majority bloc of neo-progressives, whose experience in financial matters, to be charitable, is limited particularly in dealing with an operating budget of $216,442,599? More than 25 new staffers have been hired since the current council was elected. Some are in the process of being hired.

Zooming staff costs

The 2016 staff cost of wages, salaries and benefits will hit more than $200,000,000, or a cumulated gain of 52.5 per cent since 2008. That cost is directly paid through the property tax levy. Consider that for every new staff hire, annual increases in wages, salaries and benefits; the property taxpayer, that’s you and me, directly pays the cost. It is the major reason that Guelph’s property tax levy per person is among the highest in the country.

The failure to contain these costs lies directly with the senior staff management who are supported by the controlling progressive bloc on council. The following are the members of this bloc: Leanne Piper, Cathy Downer, Mike Salisbury, Karl Wettstein, Phil Allt, June Hofland, and James Gordon.

It’s called the 7-6 group and it will not change until 2018 when the next civic election is held or a bloc member defects to support Mayor Cam Guthrie and his supporters.

This is why we the people won the battle but lost the war.

Postscript

Maybe the war’s not over yet. Perhaps some positive changes can be introduced to ameliorate the surging cost of living in Guelph. Optimism works much better than the present negative polarity that is like a dragging boat anchor, stalling responsibility and common sense.

We can never lose the core spirit of our city and council’s responsibility to represent all the people, all the time.

Your GuelphSpeaks Weekender

By Gerry Barker

Posted December 6, 2015

This week:

* Some 2016 budget questions that need action and answers

With only three days left, the council will decide the final 2016 city budget Wednesday night. Here are some questions and issues that will be discussed.

ITEM: The proposed staff cuts to Guelph Transit services and increase in fares

 To an outsider, that’s most of us, there is a serious management and union staff problem. The union is adamantly against any cuts or increased fares. Their spokesman, American Transit Union’s (ATU) president, spoke at length about how the system should be changed.

The Questions: Has he exchanged the union’s point of view with management?

Has the management/labour partnership crumbled as the union attempts to run the system for its own self-serving reasons?

Has the absence of common sense dialogue evaporated at the expense of the users? Why did the city senior staff not consult with both sides before proposing the cuts and fare increases in the staff recommendation to council?

This strategy has backfired big time and the result is an ever-widening gap between the union and management.

The responsibility lies with senior city management

The outcome? Bet the transit cuts and fare increases will not be approved for the 2016. This will boost the property tax rate on this one line item.

ITEM: How does the staff propose to replenish the $8.96 million Urbacon settlement charges it took from three unrelated reserve funds?

This is an important consideration that any management would maintain as a priority, before announcing it wants to hire an additional 12 full-time equivalent employees in 2016

When the General Manager of finance and city Treasurer attests that the city system is running lean as possible, it implies that she hasn’t been around long enough to understand the unparalleled growth of staff in the past eight years. Of all people, she should be alarmed at the cost of staff that is 80 per cent of the property tax levy and is the largest single source of city revenues.

The staff prepared two proposals to council. The first estimated an increase of 1.58 per cent in property taxes. The second, titled appropriately “expansions” included some of the following:

Corporate services, $450,000 for service rationalization; Information and Access coordinator, $86,800; GIS program manager, $127,600; Gasoline Tax realignment, $500,000; Manager of Corporate Assets, $157,400; Analyst Asset Management, $120,000.

Why do we need more staff?

Senior staff has offered no public explanation why these staff increases and projects are needed. It remains a continuation of the Farbridge administration’s ability to do what and when they wanted and without public input. Although council did get an earful from the protesting Transit workers at the recent public budget meeting.

Both the BMA report commissioned by council and the financial analysis done by Guelph citizen, Mr. Pat Fung, CA, CPA, chiefly agree that Guelph’s operating costs are 50 per cent greater than either Cambridge or Kitchener.

Why doesn’t the staff recognize this? With the base proposal of 1.58 per cent, plus the killing of the transit proposal with an impact of .72 per cent, it boosts the tax increase to 2.3 per cent. Then add in the expansion proposals costing 1.25 per cent and the property tax increase is, Tah Dah! 3.55 per cent. Does that have a familiar ring to it? That’s the same rate increase, as 2015.

Adding the two budgets approved this year, council’s first year in office, is it possible that the new council will vote to approve a total property tax increase of 7.10 per cent?

The FMA report specifically spelled out that the reserves were seriously underfunded describing the situation as a “cautionary red flag.” Does the senior staff not listen to what its own consultant is saying?

This serious financial problem does not need further explanation. Staff and Council need to put this city budget on a strict diet to equalize operation and capital costs in line with Cambridge and Kitchener. The days of complaining that those two cities are part of a regional government and therefore have lower operating costs, are over. It’s a two-tier system in which taxpayers pay city operating costs plus their share of regional costs. Mr. Fung incorporated the two tax levels in his analysis.

In Guelph’s case, the time has arrived to start the financial cleanup of the grandfathered high costs created by the previous administration.Start by cutting operating costs with this budget.

 

How council gives citizens the mushroom treatment

Posted May 10, 2012

It all started in July 2006 when the Kate Quarrie administration approved a $42 million contract subsequently won by Urbacon as general contractor. The contract called for a new city hall to be built at a cost of $32,498,000 and to convert the old city hall into a provincial courthouse costing $9,502,000.

In the fall of 2006, the Quarrie council was swept out of office and replaced by former Mayor Karen Farbridge and 10 supporters.  Her majority was omnipotent with a huge majority of councillors dedicated to changing the city into their own image.

The contract for the two buildings was to be “substantially completed” by February 28, 2008. Subsequent negotiations extended the completion date to September 8, 2008, due in part to more than 350 change orders apparently demanded by the city staff.

The city fired Urbacon on that date because it claimed the contract had not been substantially completed. Chief executioner was Chief Administration Officer, Hans Loewig ,who is no longer working for the city.

It was revealed that members of council had no oversight of this major project. Change decisions were made by the city staff.

On October 9, 2008, Urbacon sued the city for breach of contract claiming  $20 million in damages. The city counter-sued Urbacon for $5 million.

Urbacon claimed the city delayed completion of the project because of hundreds of change orders.

For its part, the city was concerned about expiring leases in buildings, housing public workers, that made the move-in date uncertain. It was revealed that council had ”lost faith in Urbacon’s ability to deliver.”

Here’s where it get sticky.

When all this was going on, the public was left in the dark. All it knew was the builder had been fired by Loewig with little or no explanation.

In the past three and a half years, many subcontractors were not paid by Urbacon resulting in 19 liens against our brand new city hall.

Under the Construction Loan Act, the city withheld $3.2 million and was ordered to pay it to the court. The city and Urbacon agreed to pay $2,370,963 to those subcontractors who filed liens against the city hall project.

In addition, the city also paid another $3,385,205 directly to some subcontractors to complete their work and finish the building.

The city has stated that it is suing the consultant hired to manage the project and the insurer providing the performance bond. That suit is on hold until the city’s trial with Urbacon is settled.

In the fall there will be a non-binding mediation between the city and Urbacon in an attempt to settle their differences. If this fails, a trial is set for January 21, 2013.

Added to this complex array of misadventures was the city hiring Collaborative Structures of Cambridge to convert the old city hall into a provincial courthouse. Details of that contract have never been revealed including the cost.

The fumbling of creating a new city hall and provincial court has created a stunning series of administration errors and with little culpability directed at the decision makers. It will probably take a forensic audit to determine the end cost of the new city hall.

The cost to the city of hiring lawyers still working their way through this swamp of litigation has yet to be revealed.

Instead the public, those paying the bills, is given the mushroom treatment to function in the dark without knowing how their city is being managed, or mismanaged as seems to be the unfolding case

This mess is classic Farbridge.  The citizens are left in the dark because too much of the public’s business is conducted behind closed doors or off-site.

It is noted that even mushrooms eventually see the light of day.