Posted July 23. 2012
The following analysis of the city budgets over a five-year period shows how your tax money has been spent by the Farbridge-dominated Council. The facts and figures are sourced from official city financial statements and other documents.
While the city balance sheet is in fair shape, it does not reflect the profligate spending on dubious projects and events in the past and how future Councils will be forced to grapple with bad decisions and high repayment of debt.
You can judge for yourself where the weaknesses are in these facts and figures. It is not a pretty picture and every citizen should be aware that the past and future policies of the Farbridge administration must be curtailed.
The 2011 debt of $121.4 million exceeds the permissible limit of $95.86 million. This limit, composed by Council, establishes a policy of having debt not to exceed 55 per cent of the total city budget in a given year. In 2011, the city budget totaled $174.3 million. Doing the math, the current debt ratio is 69.54 per cent of the total budget.
Simply put, the city’s debt load is $25.13 million over its own established limit.
That difference, 14.54 per cent over the maximum debt ceiling, is not only alarming but probably illegal.
In 2006, the city’s total spending was $226.8 million. In 2011 spending hit $317.7 million, a 40 percent increase. During the same five-year period, revenue increased by only 25.8 per cent from $302 million in 2006 to $379.9 million in 2011.
The five-year growth of expenditures is greater than growth of revenues and is a trend that must be reversed.
By comparison, suppose your income every year only rose by 4 per cent but your spending increased by 6 per cent every year, the outcome would quickly result in a huge deficit in household finances. It’s no different with city finances.
Here are some of the reasons your city is not being run competently.
The city experienced a 70.8 per cent increase in transportation costs, spending $31.5 million in 2006 and 53.8 million in 2011. This included buying more buses and adding bike lanes. Yet hardly any money was spent on increasing downtown parking or traffic control.
In 2006, the city spent $29.9 million on environmental services. In 2011, it spent $63.3 million, a 111.7 per cent increase. This reflects the agenda of the Farbridge administration that has imposed its environmental policies on the municipality. And, they have done it with little public input or consideration.
In this case, the construction of the wet compost plant ($33 million) and purchase of equipment ($15 million) to transport waste is one example of increased city debt. The effect of these decisions places a huge burden on future Councils and taxpayers. It’s also a concern that the plant does not meet its contracted performance. Details of the contract signed with Maple Reinders, the architect and builder of the plant, are a secret.
In 2006, the city received $127.8 million in taxes. In 2011, tax revenue climbed to $176.8 million. By 2011 that is a 39.1 per cent increase in five years or an average of 7.82 per cent per year. The myth that your taxes only rise by 3 per cent each year is misleading and frankly nonsense.
Let’s break out the sources of city revenues and expenditures in millions:
2011 2006 Plus (minus)
Taxes $176.8 $127.8 39.1 per cent
User fees $67.43 $58.3 22.4 per cent
Gov’t grants $68.3 $66.7 2.3 per cent
Other $34.5 $45.1 (24.6 per cent)
Total Revenues $379.9 $302 25.8 per cent
Expenditures $317.7 $226.8 40 per cent
Let’s look at the costs of staffing our city.
The number of city staff increased by 358 fulltime employees between 2006 and 2011. Since 2006, the percentage of the tax base to pay employees wages, salaries and benefits, has shot up from 74 per cent in 2006 to 89 percent in 2011.
In money terms, the staff pay and benefits jumped from $94.7 million in 2006 to $155.2 million in 2011. That’s a 63.9 per cent increase in five years.
Strangely, the number of full time employees (FTE) has dropped in the 2012 budget to 1,434.8. This represents a staff increase in six budgets of 289 employees. There is no explanation of the sharp reduction in the 2012 budget as compared to the audited 2011 budget.
In the 2011 budget there was an increase in staff of 31.2 per cent in five years with employee costs jumping by 24.8 per cent or 4.6 per cent annually.
The average annual pay package in 2006, per civic employee, was $82,563
the close of 2011 that pay package had jumped to $103,054.
There are now 47 city employees earning more than $100,000. A number of them, senior managers, earn more than $160,000.
Put another way, while taxes rose by 36.4 per cent in five years, staff salaries and benefits jumped by 63.9 per cent. That’s a compound yearly increase of 10.4 per cent.
The bottom line is the number of staff running the city grew exponentially faster than the actual population growth.
Consider that the staff salaries and benefits comprised 89 per cent of the 2011 tax total tax income.
From this information, the average taxpayer must believe that the tail appears to be wagging the dog.