Subpoenas, legal letters, a “bullet” dodged

Just another week in the fallout of Grimsby Energy’s biodigester

By Mike Williscraft

NewsNow

As has been the rule rather than the exception, bad news reigned supreme during the latest council update into Grimsby Energy’s failing biodigester project.

GE chair Delight Davoli informed council on all aspects of the operation from production to potential sale to significant administrative issues unearthed over weeks and months of research.

Two former members of council who also were board members have been served with subpoenas to appear before the Labour Board to provide information on administrative matters regarding the operation, Davoli said.

The hearing was scheduled for this week in Toronto.

As well, Davoli noted that a former member of council, “was encouraging a potential purchaser to break the non-disclosure agreement and tell what was going on” with the process.

“A letter will be going out to ask this person to cease and desist,” said Davoli.

While there is very little information to go on with the vast majority of meeting minutes non-existent at this point, some small pieces in the puzzle of how the project got into its current state have been found.

For example, while registered letters have been sent to all board members requesting any past minutes, only three replies have come back stating they had none.

Going through the board recording secretary, Davoli and her team were able to get minutes from September and October last year which provided some interesting and troubling information, she noted.

“That board knew in September it was in

financial difficulties,” said Davoli, noting the Sept. 14 minutes point out the board had already started paying suppliers based on need to operate as cash had dried up.

It was also noted in that set of minutes that the board had sought to shift responsibility for the $4.5 million bank loan co-signed by the Town of Grimsby solely onto the Town.

“This is a company with $15 million in debt which doesn’t have the means to pay the principle on its $4.5 million loan,” said Davoli.

“The minutes showed they tried to connect with the Town.”

Davoli explained that the plan was to get the Town to pay out the full $4.5 million and then Grimsby Energy would pay the Town interest only, no principle.

This never came to fruition as the municipal election a month later cleared the deck of the vast majority of the previous council, many of which were also members on multiple hydro boards.

While much of the information Monday was new, the theme and direction of it was all too familiar for members of council who listened attentively for Davoli’s hour-long presentation, which included many questions and comments.

“We’re becoming famous for things I wish had never happened,” said Davoli, noting a television piece which aired on CH TV news last week.

Coun. Reg Freake, who also sits on Grimsby Power’s board, thanked Davoli and her team for their effort – as did other members of council – before he waded into the difficult area of how the Town is gong to pay for this fiasco.

“Deep breath,” he said, before taking a lengthy pause.

“The taxpayer really has to pay for this dump on the hill,” said Freake, pointing out there is no way to find $5 million in the budget to offset the impact of the bank loan.

“It is a most sad thing when you think about what we could have done with the $5 million.”

Davoli corrected Freake noting the total is over $15 million and she reminded council that the previous board sold off NRBN, the company’s fibre optics operation for $9 million, the proceeds from which were dumped into the biodigester and will not be recouped.

“And to hear there is still some of the old guard meddling with it makes me irate,” said Freake, referring to the attempt to gain internal and confidential information on the operation.

“It is sad anyone would put the Town in this position.”

Coun. Dave Kadwell, who experienced a lot of lows over the last several years as he attempted to get any information on the project made public was at a loss for words.

“I just can’t…,” said Kadwell, his words drifting off.

“It makes me even more disgusted,” said Kadwell, reacting to the information that past board members knew of the financial condition the project was in last Fall and didn’t share any of that information with council.

While many suppliers are still waiting for some level of payment,  it was noted after a question by Mayor Jeff Jordan that all previous board members’ stipends had been paid up to current before they left the board. It was noted that members of council on any hydro board did not receive these payments, rather, they were collected into a fund which made regular charitable contributions.

Coun. Lianne Vardy pointed out that the new board is working totally free of any charge of pay.

“This board has not spent one dime on a sandwich or a cup of coffee. I just want to make that clear,” said Vardy.

On the operation side, Davoli noted that an about-face by the Ministry of Environment did extensive damage to the ability of the site to carry on.

Last October, a decision was issued called the output material agriculture grade, but that decision was flipped after the new board took over.

This change made it much more costly to truck and disperse the output material with Davoli estimating the cost to empty the two now-full tanks on site at $45,000.

Until those tanks are empty, at least partially, the site cannot run.

She also noted that the generator is due for a 10,000-hour service, which will cost about $35,000.

About the only ray of potential light, she said, is the possibility that some of the $1.9 million in taxes paid on the NRBN sale may be recouped.

“I’m not holding my breath, though,” said Davoli.