Dan Moziar has questions about the hydro merger

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I am unable to attend the July 14 Council meeting to address you on a number of concerns about the proposed merger with Horizon. Even if I were able to attend, I doubt that five minutes would be sufficient time for me to cover all the concerns I would like to bring to your attention as you wrestle with this issue. I am available to discuss these issues with Council members if they so wish. My phone number is 519-837-3742

Here are some questions that you should consider and get responses to before you deal with the merger recommendation as posed by the GHI Board.

1. According to some Guelph Hydro staff, it is alleged that the Chair of GHI indicated that if Horizon was involved in a strike, that would be a deal breaker. Well the Union is on strike, not because of monetary matters, but because of Labor/management issues outstanding from the 2005 merger and which are still allegedly unresolved.
The IBEW position can be found at the following web site.
http://www.ibew1st.org/documents/HORIZONUTILITIESStrike.doc
Remember this was not the position of the IBEW negotiating team, those positions are very rarely voted down by the membership, this was the democratic vote of the rank and file and it indicates a serious trust issue.
Why is this merger still on the table

2. There are three options to deal with – A good merger proposal, an outright disposal (in both of these cases the City has lost control) and retain the Utility and tough it out(keep control). In 1957, The Guelph Mayor of the day brought a deal to Council that was “too good to be true”. For $400,000 the City approved the sale of the Gas Distribution business and municipal gas distribution License, while very few Cities -Kitchener and Kingston decided to hang on. Conventional wisdom of 1957 was that Kitchener was a fool and would live to regret their decision. Well Kitchener is the one who can laugh now. For 5 decades Kitchener has benefited from a very profitable enterprise.
Please see the letter of D. Bauer to the Tribune on the gas matter.
So how can you be sure that the Horizon Deal is “too good to be true? You have been provided with what is called a limited choice (one coption only) to decide on. Don’t you think that it is the responsibility of the GHI Board to search out all available options before bringing any proposal to Council? Or were they influenced by the time line of the 33% tax Holiday – provided of course that the deal is in the public sector? Don’t you think that you should insist on seeing other expressions of interest before you make such an important decision?

3. What is the disposal of the City Mortgage to Guelph Hydro? I am surprised that there is no mention of this to date, other than by myself. It is my understanding that Horizon wanted to recapitalize the note for the St. Catherine’s merger, but St. Catherine’s City Council insisted that the note be paid out – which it was. So do you understand how the mortgage is to be dealt with under the merger proposal? Don’t you think the public will be interested in how this approx $30 millions could be used by the City?

4. Is each Guelph Councillor provided with the full business case for their review. If not, why not? I have been informed by a member of the Hamilton/St. Catherine’s negotiating team that the Councillors were supplied with the full unexpurgated merger business case. Guelph City Council is entitled to the same courtesy.

5. How comfortable is Council with the business track record of the GHI Board. The closure of Selectpower and the sale of Fibre-Wire are two examples that you should really question.

6. What are the proposed Governance issues? Do you really need a holding company if the Merger is approved. After all Council could appoint the Mayor and two Councillors or Citizens at large to sit on the Horizon Board and save the need for a holding Company. After all what else is there for GHI to hold?

In addition to the above I will repeat the seven concerns I have previously raised. that the GHI Board should be asked about:

1. RATES: It was claimed at a GHI presentation to Council that Rates were to decrease by 20% and the Dividend could double as a result of the merger. Now the response is that rates will not go up as fast – Please explain the quantum Shift
2. STAFFING At the same meeting, it was also stated that all Guelph Staff would be job protected and possibly only one job would be lost.
Now the information is that 30 jobs will be lost and “inducements” to leave or take early retirement will be offered. Please Explain.
3. THE HORIZON STRIKE The Union (IBEW) is on strike at Horizon not over monetary items but over trust in Labor/Management issues. Why did the Union members reject a financial settlement, what are the issues that would provoke such an unusual response? The IBEW has posted an explanation on its Website.
4. CONTROL: What will happen to Guelph’s share of control in the event that Horizon is successful in increasing its aquisition of other “partners”? Please pay particular arttention to the potential treatment of St. Catherines on this issue, it is a harbinger of things to come for both Guelph and St. Catherines.
5. SELL: Why not consider the sell option and see what the offers look like? After the City is going to lose control either way. A lot of other utilities have taken that route. You owe it to yourself to at least understand that option.
6. STAY THE COURSE What about just hanging on and continuing to operate the locally owned, locally operated, and locally controlled utility? After all a number of other utilities, some smaller than Guelph are staying that course. It can be done if you have faith in the future.
7. LOCAL ECONOMY: What happens to the local Economy? Loss of jobs as well as out sourced services.

Good Luck with this very important matter.      Dan Moziar

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