Ascent financial picture a shocker


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You may not realize this, but as a city ratepayer you are, in essence, a shareholder in the former St. Thomas Energy or what is now known as Ascent.

With that in mind we offer a word of caution: take a deep breath and sit down before proceeding any further.

Monday night, city council will be in receipt of the 2014 audited Ascent financial statement — although as shareholders and with two members sitting on the Ascent board of directors — the gory details were laid bare some time ago.

This corner has warned the picture would be grim — we never could have imagined it is more a financial free fall.

In 2014, the Ascent Group rang up an operating loss of $6.8 million. That compares with a $1.4 million profit in 2013.

But wait, the bleeding has only begun.
Ascent
Dig deeper into the city’s consolidated financial statement and you’ll find at the end of 2014, Ascent owed the city another $7.9 million.

As shareholders you should be asking, why would Ascent owe the city a considerable sum of money?

Let’s put that very valid question to city treasurer David Aristone.

“We have transactions with them each month because they collect our water bills,” informed Aristone. “So, there may have been outstanding water bills, more than the usual at year end.”

O.K. Why would there be more outstanding water bills than usual? Isn’t that money supposed to be turned over to the city every month?

“It’s supposed to be,” agreed Aristone. “They (Ascent) may have had a cash flow issue that they couldn’t pay it to us.”

A cash flow issue? As in they couldn’t pay their bills. Perhaps were close to being unable to pay employees on a given pay day?

The situation was so critical in 2014, the city provided Ascent Group Inc. with security for a $1 million standby letter of credit so that it could bid on projects.

And who authorized this convenient arrangement? Is it still in effect for 2015?

After all, Mayor Heather Jackson and Coun. Gary Clarke sit on the Ascent board of directors and surely must have been aware of how dire this had become.

Aren’t they supposed to have the interest of ratepayers at heart? The same ratepayers who would be on the hook had this degenerated further?

How can you be accountable to Ascent and the ratepayers at the same time?

That is a conflict of interest.

So, who on council is going to stand up Monday and demand an explanation as to why, at the end of 2014, Ascent was more than $14 million in the hole?

And, if the mayor is demanding a business plan from St. Thomas Cemetery Company in order for them to obtain a measly $59,000 grant, let her insist on the same from Ascent in order to get this train wreck back on track.

If you remember, Ascent CEO Ron Osborne told this corner several weeks ago the financial statement had been submitted to council in April.

All along, Ascent was the subject of a financial audit.

If this were a private company, heads would roll.

BEEN DOWN THIS ROAD

It’s deja vu all over again for former mayor Cliff Barwick and the teetering remains of the Sutherland Press building.

Sutherland Press building in 2008, prior to partial demolition of front face

Sutherland Press building in 2008, prior to partial demolition of front face

In 2008, Barwick issued a demolition order on the boxy Talbot St. structure in an attempt to protect the public from what was deemed an unsafe structure.

A two-year legal battle ensued.

In 2010 — just days before the municipal election — Barwick, city staff and others were hit with a lawsuit by Toronto owner David McGee.

So the events of this week, with the partial collapse of the roof, must seem like turning back the calendar to Barwick.

“We have flipped the calendar back to 2008 and nothing has happened. This building has been in this condition now for close to six years and virtually nothing has transpired,” Barwick told City Scope on Thursday.

“What do you expect, the building isn’t going to get better. And now we’re in a situation where it has inwardly collapsed . . . and I would think the whole building is in peril.

“My major concern had always been the public walking by on Talbot or on Moore Street,” added Barwick. “If we did not have that properly cordoned off, with proper notification, we would be in libel and it would cost us quite a bit of money.

Barwick and the city hired a structural engineer (quite possibly the same engineer brought in last week by the city) “and his prognosis and diagnosis was the building has to come down. It can’t be saved. As the building now stands, it is more of a hazard than it was before because it’s older.”

So Barwick was pilloried because of his concern for public safety. Is our current mayor in for the same rough ride this time around?

And what about that 2010 lawsuit?

“I was vilified for that by people who had no background in engineering and I can remember, particularly, one person from Belmont saying in a few years this building will be a shopping area with multiple residences. Well, if she went shopping there now she’d have to wear a suit of armor and a hard hat. She obviously didn’t know what she was talking about.”

The 2010 municipal election shenanigans — what with the lawsuit, robocalls and attempts to run grossly misleading advertising — proved a shameful chapter in this city’s political history.

“It (the lawsuit) was timed so it would make everybody — me and certain public officials, the chief of police, the building inspector and the engineering head — look bad. It had nothing to do with the building per se, but everything to do with the campaign, because the owner of the building wanted someone in power who, perhaps, would let things go . . . and I certainly wasn’t the person to do that.”

McGee – who we attempted to contact Friday to no avail – will be consulting with city manager Wendell Graves on Monday at which time the next step in the sorry Sutherland saga will be determined.

You can read more about the Sutherland Press building and events that transpired earlier in 2015 here.

QUOTE OF THE DAY
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“In my parent’s generation, people remember what they were doing when Kennedy was assassinated. In my generation it is 9/11. Never forget.”

St. Thomas Police Chief Darryl Pinnell in a Tweet following last Friday’s 9/11 memorial service in the city.

City Scope appears Saturday in the Times-Journal. Questions and comments may be emailed to ian.mccallum@sunmedia.ca.

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