City of St. Thomas named in $7.8 million lawsuit over decision to wind down Ascent Renewables

city_scope_logo-cmykThe recent merger of Ascent/St. Thomas Energy and Entegrus Powerlines appears to have done little to unplug the city from controversial business decisions previously undertaken by the utility.
As a case in point, on Monday (Oct. 15), the city was named in a multi-million dollar lawsuit.
The City of St. Thomas, Ascent Renewables, Ascent Group Inc, Ascent Energy Services and a numbered company, 2154310 Ontario Inc., are being sued for general damages in the amount of $7,850,000 by a numbered company, 1787868, operating as Focus Group based in London.
The statement of claim was filed at the Elgin County Courthouse.
All of the defendants are ultimately owned and controlled by the city.
According to the claim, nearly 20 years ago the city undertook an initiative identified as “Partners in Power.” Through its ownership and funding provided by St. Thomas Energy Inc., the city created a series of corporations to allow it to attempt to capitalize on growth opportunities and become more involved in the growing renewable energy sector.
These corporations included Ascent Energy Services Inc. (formerly known as St. Thomas Energy Services Inc., STESI) and Ascent Group Inc. (formerly known as St. Thomas Holding Inc., STHI). These companies operated under the name Ascent Group, with all shares controlled by the city.

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Lots of red ink, but rest assured nothing will be written off

With municipal councils in St. Thomas and Chatham-Kent having approved the merger of St. Thomas Energy and Entegrus, all that is required is the go-ahead from the Ontario Energy Board (OEB), likely to happen late this year with a target merger date of Jan. 1, 2018.
Oh, and there is that prickly matter of a not insignificant amount of long-term debt run up by Ascent Group, St. Thomas Energy’s parent – city treasurer David Aristone refers to it as bank debt – and in excess of $5 million owed the municipality for the collection of water bills dating back to at least 2014.
It’s not a subject open to much in the way of discussion by either Aristone or St. Thomas Energy acting CEO Rob Kent. 

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Over-extended reach ultimately hobbled Ascent

city_scope_logo-cmykWith the departure Wednesday of former Ascent CEO Ron Osborne, board chairman John Laverty takes over the helm on a temporary basis. It will be his responsibility to guide the process that will result in the hiring of an individual tasked with winching the utility out of the financial quagmire in which it finds itself to the tune of $14 million in losses and money owing to the city last year.
Not to mention its long-term debt of what, another $6 million or so?
We caught up with John this week and what many may not realize is the St. Thomas resident was a former public utilities commissioner who has been “kicking around the utility industry on the governance side since 1991.”
He advised the process of hiring a new CEO started almost immediately.
“We decide as a board whether we’re going to use a headhunter or not.” Continue reading

A case of the health minister calling the kettle black


Now that the St. Thomas-Elgin General Hospital Foundation has made its financial pitch to St. Thomas and Elgin county, both councils – via membership on the municipal joint committee – have compiled a list of questions designed to shake loose answers from the less-than-accommodating hospital administration.
And, the joint committee has invited – no, make that requested – Paul Bode, chairman of the STEGH board of governors, and Susan O’Brien, foundation president and chairman, attend their next meeting on Wednesday.

STEGH redevelopment sketch

STEGH redevelopment sketch

In a letter to Bode and O’Brien, dated Nov. 22, the joint committee acknowledges the hospital is a valuable community resource.
However, “we are confident that you are aware of our own municipal budgetary challenges and the fact that we must be fully accountable for taxation expenditures to those we serve,” the communication advises.
As such, the committee would like answers and information that includes:
■ Specific project costs for the redevelopment costs.
■ Is there a written, binding commitment from the province to finance the re-scoped project?
■ The province is requiring 100% of the equipment for the mental health component, representing $2.5 million, be funded locally. Why has the onus for this component of the project shifted from the province to the local jurisdiction, and where in policy or regulation is this new requirement contained?
■ The total cost of the re-scoped project is $70 million (City Scope still believes it is less than $50 million) – a reduction of about 25%, so why is the amount to be raised by the city and council still pegged at $9 million? The committee would like specific rationale why the municipal contribution is not adjusted relevant to the reduction of the overall costs.
■ And, what about infrastructure costs (roads, sewers, watermains etc.) associated with redevelopment of the hospital? Has any allowance been made for these costs?
All good questions, the answers to some of these we have previously championed in this corner.
It all comes down to transparency and jettisoning the attitude the city and county should endorse the cheques and then just go away.

Elgin-Middlesex-London MPP Jeff Yurek has valid concerns about how much the community must contribute to the hospital redevelopment fund and is seeking a meeting with the health ministry to sort things out.
Health Minister Deb Matthews fires back it’s time Yurek got on board with the project, and for good measure adds, “I know his party would not be building it.”
Whoa there Deb, let’s hit the pause button.
Who camped out on the front steps of the hospital just weeks in advance of the 2011 provincial vote and promised the Cadillac version of redevelopment for the facility.
And then insisted this announcement was politically transparent, in spite of the timing.
However, when Liberal candidate Lori Baldwin-Sands couldn’t keep up her end of the bargain and failed to deliver the riding, somehow the project becomes the subject of a re-scoping process.
The result – we get a stripped-down compact model and the community is saddled with the Cadillac sticker price.
So, who really needs to wholeheartedly get behind the project? More so in light of the questions listed and information sought in the opening item of this week’s column.
Talk about the pot calling the kettle black.

Up near the front of Monday’s city council agenda is treasurer Bill Day’s budget monitoring report up to Sept. 30 of this year. Day is predicting a budget surplus of $300,000, which is not bad, but a far cry from the $1 million-plus years.
Of interest, however, is the notation from Day the 2012 dividend from Ascent Group Inc. (formerly St. Thomas Energy Inc.) has been cut in half to $250,000.
What’s the deal here?
For an operation touted in the past by former CEO Brian Hollywood and former board chairman Ald. Tom Johnston as having such a rosy future, this is rather disturbing news for the real shareholders – city ratepayers.
Sheds a little more light, perhaps, on why neither of the above individuals remains in place.
With a seemingly bleak financial picture this year at Ascent, it casts further doubt on the rationale behind greasing Ald. Johnston’s palm with Red Wings’ season tickets.
In addition to the small matter such compensation is in violation of a city bylaw.

“It’s time for Jeff Yurek to get behind the project. I know that his party would not be building it. They have been very clear that this is not the time to be investing in capital projects, but we are.”
In their on-going war of words, health minister Deb Matthews says its time for Elgin-Middlesex-London MPP Jeff Yurek to get behind the St. Thomas-Elgin General Hospital redevelopment project instead of peppering her with questions.

City Scope appears Saturday in the Times-Journal. Questions and comments may be emailed to

We could have put that information to very good use


With the imminent departure of CEO Bob Wheeler, is it time for a new direction over at St. Thomas Economic Development Corp?
After 14 years at the helm, the question of a replacement for Wheeler offers intriguing possibilities.
What better person to approach than EDC board president, Dennis Broome, whom we talked to Thursday.
“We’ve struck a committee to look at what we’re going to do,” Dennis informs. “And, we’ll make recommendations. That will happen in November. The upside is we have some pretty competent people there already in Sean (Dyke) and Cindy (Hastings), who’ve been there for a long time and know the ropes. For Sean that’s almost a natural progression. He is a very capable young man.”
A compelling case to bring this bright, young gun to the forefront.
Be it known, this corner has, in the past, leaned in the direction of former MPP Steve Peters with his stuffed Rolodex of contacts.
However, an outside hire may not be in the cards for the EDC.
“My thought is that for going forward right now, there won’t be a replacement,” advises Dennis. “That’s open to the board changing their mind. We’re happy the way things are going.”
Would it be premature, then, to offer congratulations to Sean?
But, let’s backtrack. Why would Wheeler abandon a six-figure salary at this particular point in time or was he not offered a new contract?
“Bob was going to retire three or four years ago,” Dennis explains. “And the contract was extended twice to him. It was time for him to retire. So, that’s what he’s going to do.”
A complaint in the past, from a media perspective, has been the lack of on-going data in a workable format from which we could paint a true picture of the employment situation in St. Thomas.
“One thing people don’t realize – and we probably are remiss in our non-issue of information – is if you take it from when Sterling Trucks left St. Thomas, and take it from that day forward, we’ve actually had a plus-jobs creation in the city in the last three years of almost 800 jobs.”
These include new jobs or hire-backs at Masco, Format, Presstran, London Castings, C.D.C. Warehouse Inc. and Starwood Hotels and Resorts, Dennis points out.
We will pursue this job creation figure in greater depth this week in the Times-Journal, and we appreciate the honesty of Dennis when he concedes the EDC may not always have made available information that would help us portray an accurate jobs picture in St. Thomas.
To counter one critic, we are indeed on the hunt for good news.

It’s mid-September, 2003, and Ald. Gord Campbell has just met with St. Thomas police Chief Bill Lynch to discuss “a serious breach of etiquette” at city hall, to determine if there was enough evidence to warrant an investigation.
Campbell told the Times-Journal at the time he had concerns about “a serious breach of etiquette involving the public works community that has never been resolved.”
The matter at hand involved alleged harassing behaviour that had “demoralized” some members of city hall staff.
We reference this dark chapter only because it has come to the attention of City Scope we should now be asking questions in the environmental services department at city hall about complaints of harassment.
And, we will.
Is this an indication the toxic environment of nine years ago has oozed to the surface again, albeit down a different corridor?

Was the decision to hire Ron Osborne as the new Ascent CEO – replacing the retired Brian Hollywood – unanimously approved by the Ascent board of directors?
Our request to speak with board chairman Jim Herbert has yet to yield a response.

We briefly alluded to Jason McComb last week in this corner. He’s the guy trying to draw attention to Canada’s homeless through his website.
Well, it seems Jason camped out for a spell on the steps of city hall Monday and then attempted to introduce himself to Mayor Heather Jackson.
Hearing who was in the office, she promptly dialed 9-1-1 and four of the city’s finest convinced a bewildered Jason to exit city hall.
Jason tells us he even put on the best of his clothes in order to present the mayor with one of his posters. No ulterior motives whatsoever.
Which prompted the following observation from a member of the DDB board of directors.
“When incidents like this occur I’m concerned. He is a DDB member and local merchant. He pays rent at a storefront on Talbot Street. He has rights! What a shameful situation.”
Maybe if the mayor closes her eyes, Jason and others of the homeless ilk will just disappear.

“The scandal-plagued Liberals have put the government on autopilot with the doors shut and the lights off leaving their reckless spending to go unchecked with no plan to kick-start private sector job creation.”
Elgin-Middlesex-London Conservative MPP Jeff Yurek as he stood on the doorstep of health minister Deb Matthews Friday in London to encourage the Liberal party to end prorogation of the legislature.

City Scope appears Saturday in the Times-Journal. Questions and comments may be emailed to

If you don’t endorse a bylaw, do you still have to abide?


Ald. Tom Johnston appears to have dug in his heels on the matter of receiving compensation for serving as chairman of the Ascent board of directors, in spite of a city bylaw to the contrary, as first brought to light in this corner last week. Read here.
Johnston voted against the motion when it was adopted in 2009 and he appears now to have adopted the stance that is justification for thumbing his nose at the bylaw today in accepting season hockey tickets as compensation or a bonus from Ascent.
Unfortunately, under the Ontario Municipal Act, there is little recourse for the city and we talked Friday with Mayor Heather Jackson on that very matter. Continue reading

Question of compensation dogs former Ascent chairman


The retirement of Ascent (formerly St. Thomas Holdings Inc.) CEO Brian Hollywood at the end of June and the resignation of former board chairman, Ald. Tom Johnston, the same month has this corner puzzling over the timing of this double play.
Especially in the case of Johnston who tumbled from board chairman to out the door in a matter of weeks, prompting the question: How much pressure was exerted by the board of directors on Johnston?
Was it the fact Ascent lost $1 million in 2011, down from a profit of $584,501 in 2010.
Or, how about the possibility Johnston was continuing to receive compensation in some fashion as Ascent board chairman, in spite of a city bylaw enacted in 2009 that eliminated remuneration for members of city council sitting on outside boards?
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With regrets, your appointee doesn’t cut it


It’s like watching the proverbial train wreck in slow motion . . . and, you’ve got a front seat.
The board of directors at St. Thomas Elgin-General Hospital and city council are destined to butt heads, once again.
And, the object of their attention is none other than Ald. Sam Yusuf.
Let’s run the video back to Tuesday, when the hospital held its annual general meeting and elected Paul Bode as board chairman for a two-year term.
And, things were proceeding nicely from that point.
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Who pays for multi-million-dollar streetscape makeover?

An ambitious proposal to beautify the downtown streetscape is a winner in all regards, with one notable exception.

The expected price tag of close to $9 million will likely ensure this vision will shine no further than the bookshelf where so many other studies and reports reside.

The twin roadblocks of the city’s ever-burgeoning debt load and that queasy feeling associated with selling this to constituents in an election year are formidable obstacles to conquer.

Right plan, wrong time.

Shelling out millions for trees, flowers and upgrades to infrastructure to ensure Christmas lights twinkle along Talbot is a tough sell when St. Thomas is treading to stay afloat economically.
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