Collus-PowerStream responds about dividend

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No dividendOn the April 24 council agenda is an addendum that includes the response from Collus-PowerStream about The Block’s questions over the lack of a dividend from the utility. I wrote about this last month in Dividends for Dummies. I’m glad to see what I wrote then has been proven correct.

The original letter from CPS back in February, stated, “The Board decision was based on the Dividend Policy of the Corporation including consideration of an appropriate capital structure and working capital levels required to continue to operate as a viable business.” Clearly none of The Block had the slightest clue what a dividend is (they aren’t a very bright lot, financially speaking), so they demanded instead a letter explaining why they didn’t get one. Hence my post Dividends for Dummies.

Before you read on, let me remind you that The Block fired its original appointees to the utility board because those appointees wouldn’t act in an unethical manner and divulge confidential, personal information about staff that is protected under Ontario’s Corporations Act. The administration and The Block had a hissy fit that they couldn’t get their way. In a tantrum, they fired the board. Illegally, of course.

The Block illegally replaced these three people with three members of the town’s administration (the interim CAO, the clerk and the treasurer – none of whom had any experience in the electricity sector). When the Ontario Energy Board slapped the town’s wrist for this unethical act, The Block removed the interim CAO and the treasurer and replaced them with two out-of-town lawyers (one from Ottawa, the other from the GTA, both recommended by the lawyer the town sole-sourced to oversee the share sale – anyone see a conflict here?).

So now all of the three town appointees live out of town, and there is no representation from anyone local who is a Collus-PowerStream customer. The whole process violated the town’s own bylaws and policies for board and committee appointments, but The Block and the administration hid behind the very Corporations Act they vilified earlier and claimed it gave them the right to break their own laws. Ain’t hypocrisy grand?

One of these later appointees is the town clerk who sits at the table every council meeting. During the whole Block bluster and blather at the table about the non-payment of a share dividend, NONE of them thought to simply turn their head and ask the clerk about it. None of them asked the board member sitting beside them. None of them were bright enough to figure out that at least one of their own appointees voted not to provide a dividend.

The town got the CPS response on April 7. It lists five points and explains in detail how and why dividends are calculated. I know what you’re thinking: it’s too much information for the Blockheads to digest. And I agree. I doubt one of them will get it even with this fulsome explanation. But you, dear reader, are smart enough to understand it, so read it now. Keep in mind while you do so that every board decision requires at least four of the six members to agree. At least one of Collingwood’s three appointees voted in favour of withholding the dividend.

You know how unlikely it is that most of The Block will actually read the whole letter from start to finish. They hate reading, hate learning things that contradict their alt-fact ideology. They had their minds made up about it before it arrived. They they will misrepresent it at the table and play the blame game. Just watch.

Point four of the letter is, for me, the most telling. Point four states:

In 2015, the Town decided to assume control of the operation of its Water Department which resulted in changes to the Shared Services Agreement between the Town and Collus PowerStream Solutions Corp., a wholly owned subsidiary of Collus PowerStream Corp. The result was that the annual revenue to the Corporation was reduced from $760,000 to $260,000 for the 2016 fiscal year. The Corporation had to therefore manage in 2016 with an income reduction of $500,000 (and no corresponding cost reduction) which was approximately 50 percent of the Corporation’s 2015 annual net income and amounted to more than the total dividend paid in 2015 with respect to fiscal 2014.

The shared services agreement was killed by The Block and this administration. THEY are to blame. They did it all by themselves. But will any of them take responsibility for their own actions? Well, they haven’t done so once in this term, so hopes are not high they will this time. I expect they will blame someone else. They always have, they always will. It’s always someone else’s fault: the battle cry of the six-year-old.

They are to blame for the whole disaster of Collus-PowerStream this term and the astronomical legal costs that accompany the debacle: they took a partnership lauded by the industry as a model of cooperative ventures for utilities, a shining example to the province, and turned it toxic. They poisoned the relationship with our utility partner, with the municipalities that are joint partners in PowerStream, and with our own utility staff. They are to blame for the loss of revenue that meant no dividend to the town. But they will point the finger at someone else. Always have, always will.

And in breaking the shared services agreement, taking over the management of water and wastewater, and creating its own IT department (hiring THREE more staff at >$250K: ka-ching!), they turned the interim CAO’s promised $750,000 annual savings from the restructuring into enormous costs and liabilities that you, the taxpayer, have to shoulder. So your taxes keep going up and up to pay for their mistakes. Like I said, they aren’t very bright, financially speaking.

There’s another item on the addendum about the hospital redevelopment, another roadblock being set up, another blow to the plan, and I’ll address that in another post.

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