Open vs secret at Collingwood Council

How two Collingwood councils handled the utility sale process very differently

SecrecyLast term, Collingwood Council went through a lengthy, open and public process to sell a portion of its electrical utility, Collus. That open process – with full discussion, community involvement, consultation and public input, and local media coverage – resulted in 50% of the utility being sold to PowerStream (an Ontario-based LDC owned by three municipalities, now merged with Alectra). The shared utility is now called Collus-PowerStream. It’s about to be sold to a private, for-profit corporation based in Alberta.

This term, our town has negotiated in secret to sell our public utility and everything has been done behind closed doors without ANY community input. Compare that to Wasaga Beach where this term’s council discussed the sale of their utility publicly many times, invited comments, conducted online and telephone surveys to get residents’ opinion, help public meetings, and in the end listened to public and chose not to sell.

Our current council has used an excessively secretive, deceptive process to avoid ALL public input so it can sell our remaining share in the utility to EPCOR. without ever once telling the public why it wanted to do so.

By comparing side by side the open process from last term and that used this term, you can see just how secretive this group has been. The closed process this term has led to several investigations, ruined reputations, bad faith, broken trust and open hostility this term (local media has not fully covered this story and the process). And make no mistake: this story is about the process, not about whether selling the utility is a good or bad decision.

But it’s not simply the sale: there has been considerable collateral damage this term, including the loss of several highly-respected and provincially decorated staff members, deteriorated staff morale,  and massive expenses incurred from council and administration interference. Not to mention we lost the golden opportunity to be part of and participate in the operation of Alectra, now Ontario’s second largest and most innovative electrical utility.

Because this is a long piece, I will publish it in two posts. Let’s start at the beginning with an overview. I’ll open in early 2011, in the middle of the previous term, and compare it to January, 2015, barely a month into the current term.

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It’s about the process, stupid…

Be honestMy negative comments on the impending privatization of our electrical utility (and potentially our water utility once the first deal is sealed) drew some online criticism recently. None of those critics refuted any of the facts I offered, or attempted to debunk any of the numerous documents I quoted and linked to.

Nor could they. After all, they are easily proven, well-documented facts. But still, they called me a liar and attempted to use other cheap ad hominem tactics to discredit me.* However, regardless of their like or dislike of me, the facts remain, the facts speak for themselves. Facts matter; name-calling doesn’t.

It’s not about me. It’s not even about the decision to sell the utility. It’s about the process used to get to that point. And that means it’s also about the people who chose that process over an open and transparent one. Open and transparent is honest. Anything else isn’t. If you can defend such dishonesty, then we can’t have a reasonable discussion about the process.

We elect representatives to make our decisions for us. That’s what a democracy is all about. And for the most part, the public leaves those representatives alone to do their job. But when a major issue arises, such as the sale of a publicly-owned asset, those representatives are bound by both honour and ethics to both inform and consult the public. Neither of which have been done this term.

The process this term has been appallingly secretive and deceptive. We elected people whom we trusted to accomplish their job with consideration of the basic rules or ethics and morality. And they didn’t follow them. They betrayed the public trust and they continue to do so.

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The secrecy and deception behind Collingwood’s utility sale

Shady dealsMeetings held behind closed doors late into the night. Personal vendettas. Kickbacks. Conspiracy theories. Scams and phony reports. Backroom deals. Unethical politicians conniving. Dubious legality. Shady characters pulling strings from the shadows. Scheming. Minions acting like thugs. Cowardice. Hidden contracts. Lies and deception. A deal they can’t refuse. A financial shell game. The betrayal of public trust.

If that sounds like the ingredients for a crime novel, to me it reads like Collingwood Council’s secretive, unethical “process” to sell our public utilities. The public was betrayed by The Block. The process has a stench of corruption about it. And don’t say I didn’t warn you.

Monday night, The Block voted to sell our electrical utility; only the remaining two ethical and honourable members of council – Mayor Cooper and Councillor Lloyd – voted against the deal. And what a “deal” it is – crafted in secret, without any public consultation or input, and giving away the keys to the candy store to a for-profit buyer. It screws Collingwood. What little we know about it only illuminates the devious scheming that went on behind it. For example:

Other terms of the sale include a 25-year lease of the Collus PowerStream property and operations centre from the Town, job and location guarantees for Collus PowerStream employees, and a contribution of $150,000 towards the Waterfront Master Plan, one of the community’s biggest priorities, as identified in the Community Based Strategic Plan.

Since when does a utility sale become contingent on a “contribution” for an unrelated project like the waterfront? When you buy a car, do you have to “contribute” to the dealership’s coffee fund? Or to the salesman’s kid’s little league uniforms? Sure sounds like blackmail to me. And who signs a 25-year lease for anything, let alone an old, outdated building without any commitment by the owner to upgrade or maintain it?

And will the OEB permit a utility sale to be contingent on a 25-year lease? Or a kickback for the waterfront? My industry sources suggest not.

Council “offered” the share sale to its partner, Alectra simply because the shareholders’ agreement (USA) required it. Alectra already offered to buy it earlier this year (outside the RFP process; the amount undisclosed, but industry contacts suggest the offer was likely $10-11 million) but The Block turned them down. Without saying why, of course. But we know they were already in bed with EPCOR.

The latest price demanded by the town is highly inflated – it includes unrelated items to bump up the asking price by $2-3 million (or more) above the actual value. Why? Because The Block want the municipally-owned, Ontario-based Alectra to refuse so the town can buy it back and then sell the whole thing to the out-of-province, for-profit EPCOR:

If Alectra opts to buy the Town’s shares at the same price as EPCOR has offered, Alectra will become the sole owner of the utility. If Alectra opts to sell its shares, EPCOR will become the sole owner of the utility.

See? It’s already decided. EPCOR wins. The deal was made behind closed doors.

That’s a direct quote from the town’s own media release. This whole deal was connived in secret to sell it to EPCOR, without any public discussion, much less consultation. It’s very dirty; from my viewpoint, it’s negotiating in bad faith with our existing partner. If this isn’t corruption, then the definition has been changed since I was in office.

EPCOR will get $1 million even if Alectra buys it. That’s $1 million of YOUR money paid out as a kickback. Plus the town has agreed to pay a portion of EPCOR’s legal fees. Why? As the Connection reported, that was one of those sleazy backroom deals The Block cut:

If Alectra chooses to buy the town’s shares, $1 million would be transferred to EPCOR for their time during the process. Rodger said the town would pay a portion of the legal fees for the deal, as would the purchaser.

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Collus in purgatory

PurgatoryPurgatory is how a staff person described to me the current situation of our local electrical utility, Collus-PowerStream (CPS). It’s the result of The Block’s and the administration’s incessant interference, manipulations, contrivances and scheming over the past three years. And it was evident, Wednesday, at the meeting where CPS presented its draft Distribution System Plan, a strategic plan for future maintenance and growth.

They’re in purgatory because The Block have made the utility’s future uncertain. They cannot accurately craft business plans, strategic plans, cannot make any long-range plans for growth or sustainable development because they never know what new hurdle or attack The Block will throw at them. For three years CPS staff have weathered assaults on their revenue stream, their employees, their services, their morale, their partnership with both PowerStream and the town, their board, their integrity and their ownership. The Block have done everything in their power to make the lives and work of the employees hell. And they’ve been very effective at it. Some employees have had to take stress leave as a result of the bullying.

And now with The Block about to privatize our utility – without, of course any public discussion let along consultation – CPS is in a real quandary. The Ontario Energy Board (OEB) requires utilities to create and share with the public these system plans that reach five years into the future. But if you don’t know day-to-day what will happen with your ownership, your rates, your board, or your revenue, how can you create a realistic plan for tomorrow, let alone the future?

But CPS has to do it, and Wednesday’s presentation was part of that requirement. Which meant it, by necessity, was long on generalities but short on specifics (I believe they will be provided in subsequent public presentations). The invitation (sent to all members of council) read:

Collus PowerStream Corporation is pleased to present an overview of its draft Distribution System Plan (DSP) of planned investments in its electrical distribution infrastructure to service present and future customers from 2018 to the end of 2022. The investments are designed to provide timely value to customers by aligning reliability and service quality with customer expectations.
Customer and other stakeholder input over the years has influenced these planned investments. The draft DSP gives all stakeholders the opportunity to review and comment on it. Collus PowerStream welcomes feedback on the proposed investment plan to help Collus PowerStream maintain acceptable levels of service and ensure plan alignment with customer needs and expectations.
Collus PowerStream believes that feedback received on this consultation through two-way communication will further enhance existing relationships with our customers and other stakeholders, and help achieve positive value-added outcomes that support the Ontario Energy Board’s regulatory objectives for the electricity distribution sector.

Of nine members of council, only two had the courtesy to attend this important presentation: Councillors Edwards and Doherty.* The latter was there because she is the Blockhead on the CPS board, appointed in lieu of an actually qualified person (numerous applicants evidently proved too intimidating by their qualifications to appoint). Doherty is she of the “what’s a dividend?” comments.

The mayor and Councillor Lloyd were both out of town on previously arranged vacations. As for the rest – all of them members of The Block – what was their excuse for not attending? Disdain? Arrogance? Disrespect? Willful ignorance? Perhaps all of these. These attributes define The Block and have been expressed towards our utility and its staff (and our hospital) in the past.

It might have been their nap time, too (although at least one prefers to snooze during council meetings…). Or perhaps there were scared off by the very idea of public engagement and feedback – the bete noir that threatens their beloved culture of secrecy.

Am I being too harsh expecting our elected representatives to actually do the job we pay them for (and for which they’ve given themselves a pay raise THREE times already and are planning  fourth)? 

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The secret costs of the EPCOR deal

Scheming BlockheadsWhether or not The Block sell our share of our public electrical utility to the for-profit, Edmonton-based EPCOR, it will still cost taxpayers millions. And I don’t mean just the rising costs of sole-sourced lawyers and buddy consultants the administration has hired (well over $1 million already, and the bills keep coming in). I’m talking about the hidden costs The Block won’t divulge because they don’t want taxpayers to realize how really bad a deal they’ve made with this devil.

And it all happens behind closed doors, Monday, Oct. 23, 2017. No public input allowed on the sale of our own utility. The Block intend to privatize our utility without informing the public of the costs or the consequences.

My industry sources tell me there are many costs associated with the sale that will be built into the selling price, but paid back to the buyer after the sale. In other words: it’s a shell game. We taxpayers will pay the buyer’s costs and their fees, but these will be hidden in the contract, which will be kept secret, so you won’t know what they really are. Sneaky and underhanded – The Block’s way.

Let’s start with the transfer tax: the Ministry of Finance applies a 22% tax to sales made to out-of-province buyers. So if the sale of the town’s share is $8 million as it was in 2012, the MoF will demand a $1.76 million transfer fee. But the buyer will probably offer more, an inflated value of, say, $10 or even $12 million, and the town will repay the buyer the tax from the total. So the town doesn’t actually get the extra cash: that pays the buyer’s taxes. Did I mention the shell game?

Then there’s the “break fee” or termination fee we will pay even if the deal falls through. This happened to Innisfil when its council decided not to sell InnPower to EPCOR (as I recall from media stories, the amount was $1.2 million, but I may be incorrect). Wikipedia tells us this is:

… a penalty set in takeover agreements, to be paid if the target backs out of a deal (usually because it has decided instead to accept a more attractive offer). The breakup fee is ostensibly to compensate the original acquirer for the cost of the time and resources expended in negotiating the original agreement. A breakup fee also serves to inhibit competing bids, since such bids would have to cover the cost of the breakup fee as well.

Which my industry sources tell me has already been agreed upon – in secret of course – by The Block and the town administration. We’ll pay it even if we decide not to sell. How much will it cost us? It really depends on what sort of slimy deal The Block cut, but again my industry sources suggest it will be between 8% and 13% of the offer.

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The ignorati rise

Chapman University recently published the results of a depressing, but hardly surprising, survey that shows American believe in codswallop continue to rise. Not political codswallop – this is the supernatural, paranormal, wingnut type.  And the numbers are huge. Or yuge as the ignorati-in-chief would say.

The article notes, “nearly three-fourths of Americans do believe in something paranormal.” While we expect that sort of muddle-headed, superstitious thinking to be widespread in the 13th century, that’s truly sad in the 21st century. And we don’t expect it in the country that put a man on the moon, invented the iPad and the PC. You can’t do that when you believe in ghosts, goblins and magic.

WIngnut beliefs

These are truly, deeply unsettling scary figures. Almost 20% of those surveyed believe “psychics” and “fortune tellers” can “…can foresee the future.” These so-called psychics are constantly being debunked and revealed in the media as con artists,  swindlers and charlatans. Yet millions of Americans believe they have some ability to see the future. Depressing. But it gets worse. According to the results,

  • 55.0% believe that ancient, advanced civilizations, such as Atlantis, once existed;
  • 52.3% believe that places can be haunted by spirits;
  • 35.0% believe aliens have visited Earth in our ancient past;
  • 26.2% believe aliens have come to Earth in modern times;
  • 25.0% believe some people can move objects with their minds;
  • 19.4% believe fortune tellers and psychics can foresee the future;
  • 16.2% believe Bigfoot is a real creature.

The rise of Donald Trump and the rapidly growing culture of anti-intellectualism, anti-science, faux Christianity and the alt-facts version of reality promulgated by the theocratic right parallel this growing belief in superstitious and religious claptrap. It’s a deliberate, planned attack on Americans to make them stupid. And it appears to be working.
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