Monthly Archives: August 2012

Media Watch

Manipulating the print media

‘Political Journalism Sucks’ stated a recent headline in the Toronto Star addressing the issue of churnalism, – the practice of publicists revealing a story just before a newspaper deadline. The result often there is no time to question the content so the reporter is forced to do a fast rewrite of the handout in order to meet the deadline.

In some circles, that is described as managing the news. Does it happen in Guelph?

You betcha! The city’s squad of communications staff uses this tactic frequently. The result, in the case of the Mercury that has firm deadlines for copy, is a lot of city administration generated puffery gets into the paper. The worst offender is the weekly Tribune that is the chief cheerleader for the Farbridge Administration.

The city of Guelph is probably the Tribs largest advertising client spending more than $500,000 a year.

Is it no wonder that Internet blogs are filling the vacuum of hard news and are increasingly performing the job of newspapers on questioning the city’s management of the community?

Two columns racing to the bottom of the barrel

Two Mercury columnists caught Media Watch’s eye recently. Farbridge troll, Brian Holstein, chastises Coun. Cam Guthrie for continuing to hold council and committee meetings in August to do the city’s business. He accused the councillor of “grandstanding” and “grabbing the headlines.” The Farbridge voting bloc killed that suggestion. Brian, this is 2012, not 1912.

On the other side of the political spectrum is Matt Bondy who extols the virtues of the new Republicanism in the U.S. He sees vice presidential candidate Paul Ryan as “substantive, temperamentally moderate.” As chairman of the House of Representatives Finance committee, Ryan presented a budget that would cut Medicare, Medicaid, criminalize abortion, kill Planned Parenthood and privatize Social Security. He would also revoke the Affordable Healthcare Act and increase defense spending. Yeah, he’s the right Romney choice all right. Matt, where were you five years ago when the Bush Republicans almost buried the world with their crazy economic policies?

Is Mitt Romney Bush II?

Mangling communications at City Hall

The recent scoop of the Mercury’s Scott Tracy regarding the five-week campaign to clean up the downtown bar scene, was tut-tutted by a Tribune columnist. It is a typical case of how the media is not the message.  One sometimes wonders, when the Farbridge administration is so controlling of the news emanating from City Hall, how this major announcement was so mangled by the communications department. Guess this can be an unintended rationalized of the decision not to hold council or committee meetings during August.

This was no spaghetti western

The hilarious and bizarre spectacle of Clint Eastwood talking to an empty chair preceeding Willard Mitt Romney’s scene-setting speech at the Republican National Convention, took on a life of its own in Twitterland. If the Democrats needed a break from the GOP rhetoric to restore America’s values ad nauseam, Dirty Harry delivered. Talking to an empty chair, hmmm, it has promise in Guelph.

As usual, your comments are welcome. Invite your friends to drop into for accurate information and entertainment.



Filed under Between the Lines

How many conflicts of Interest does it take?

Posted August 29, 2012

Coun. Leanne Piper piously told her council colleagues at the beginning of the month that she did not support Coun. Guthrie’s motion to conduct council and committee meetings during August.

Her explanation was that she would not stop working during the August council stand down, but would be busy serving the needs of her constituents.

Well, we now discover what Ms. Piper’s “constituency” work is.  The University of Guelph employs her for all of university on-campus student housing, as manager of residence admissions and marketing

“We’ve been able to honour the guarantee of a residence that goes with the offer of admission to the university,” she is quoted as saying in the public prints.

Most universities and colleges maintain a housing registry as assistance to students.

Is this the same Leanne Piper who joined her council colleagues in not attacking the housing abuse many residents in her ward are experiencing? She voted not to take the matter to court because it would involve a possible litigation with the Ontario Civil Rights organization.

The question is why residents in homes zoned for single families face conversions of homes to student housing. Some have up to eight to ten students crammed into homes in the middle of a single-family neighbourhood.

Perhaps  she’s not listening to the protests of homeowners in her own ward who are seeking to have their areas free of parties, junk left behind and frequent visits by police.

I guess if you are in charge of residence admissions and marketing, your primary job is to make sure the incoming and returning students have a place to put their head down.

Keep in mind that Guelph councillors are basically part-time (but not the Mayor). They are able to hold other jobs so long as they can meet their commitment for service by those who elected them. Every four years citizens have the right to determine whether, or not, they have been served.

Is Coun. Piper in a conflict of Interest here?  If she is placing students in those areas where private student housing interests are located in single family zoned areas, then she is in conflict?

Or is this a sham ?

She is sworn to uphold the bylaws of the city. Even if she only “manages” to put students in accommodation on campus, her position as a member of Guelph council is jeopardized.

Recall the brouhaha over the company that wanted to build a twin hi-rise student residence on the site of the hotel at the corner of Stone Road and Gordon Street? The university opposed that proposal, as did council. It is now in the hands of the OMB.

Guelph council has the following councillors with ties to the University: Maggie Laidlaw, Lise Burcher, Leanne Piper and Mayor Karen Farbridge. That’s close to one-third of council.

Is that not a conflict not only for Piper but Burcher, Laidlaw and the Mayor herself?

The irony of Coun. Piper’s career on Council is that she, at one time, agreed with the writer that the so-called bed tax per student of $75 in lieu of property tax was out of date and unfair.

I presume now that she is an employee of the university; she will remain silent on that subject.

What! Another conflict of interest?



Filed under Between the Lines

Finally! City addresses downtown late night drinking problems

Posted August22, 2012

The city has announced a plan to curb late night rowdyism downtown. It is a good first step with elements designed to reduce the problems of drunkenness and free wheeling public civil disobedience.

The important part is there is a plan, finally. It is a coordinated effort with city personnel, police, and private security guards to control the taxi stands.  The express purpose is to efficiently move people out of the area after the bars close. Porta-pottys will be available for both men and women and, good thinking here, removed during the daytime.

Another move is to ban cars from the core during the evening hours. While this may encourage what one individual stated was creating a Mardi Gras atmosphere, it is another good step to turn the downtown into a community place where all citizens can enjoy themselves in a civil manner.

The only thing missing is the role of the liquor outlets.  The operators should have some skin in the initiative.

Also contributing to this problem is the University. Officials closed the campus pubs on weekends some time ago. This created a vacuum that forced students to party downtown.

City staff is to be commended for taking on this long-time issue. Let’s hope it works.


Filed under Between the Lines

How Guelph can go broke not controlling public employee compensation

Posted August 16, 2012

Every year the provincial government publishes its Sunshine List naming all those municipal public servants in the province being paid more than $100,000.

The most recent figure for Guelph was 47 city employees earning more than $100,000.

Along comes the announcement that in 2009 there were 64,078 public workers earning more than $100,000 a year. Fast forward to 2011, and the number has surged to 78,910, an increase of 23 percent.

This statistic includes all municipal employees in Ontario. This is where the great divide occurs. The taxpayers pay municipal employee’s salaries, wages and benefits, including a portion of pension costs. They pay it through property taxes and user fees with a small portion in grants from senior governments.

The greatest bulk of municipal revenues come from property taxes. Under provincial law, all municipalities must balance their budget every year. The same does not apply to the provincial or federal governments who run deficits. In the case of Ontario the current deficit is $16 billion.

In the case of Guelph, there has been an exponential growth in the number of fulltime city employees, since the Karen Farbridge administration took over in 2007. This was accompanied by a growing number of senior staff that breached the Sunshine List of earning more than $100,000 a year.

Here is what’s happening:

This growth in numbers of staff and generous pay packages has thrust tremendous pressure on the city budget process. Remember it must balance every year.

Today, 89 per cent of the annual Guelph budget is dedicated to staff compensation, retired, present and future.

The growth of staff in 2006 of 1,148 fulltime equivalent (FTE) staffers earning an average of $ 82,563 in salaries and benefits to today’s estimated 1,508 earning an average of $103,054. That’s a 31.2 per cent increase in five years.

How does that match up with the growth of population of the city? The population in 2006 was 118,000. Today it is estimated to be 122,000, a 4,000 household increase or 3.38 per cent increase.

How then can the Farbridge administration justify increasing the staff by almost ten times the natural growth of the city?

Skewing all this is the influx of 22,000 University of Guelph undergraduates in the fall. The arrival brings pressure on city services including transit, water and waste facilities, traffic control, police, and fire, EMS personnel, engineering and building inspection services.

For this, in lieu of property taxes owed by the University, the city receives  $75 per student or $1,650,000 a year. That’s about what it would cost to hire 15 additional police officers and firemen. And all these additional attributable costs fall on the taxpayers’ shoulders.

It’s unfair and unreasonable, yet the Farbridge majority on Council continues to ignore the growing problems of financing a bloated staff. Plus the University smugly sits back protected by a provincial government property tax directive dated back to 1983.

Only the people can change this.




Filed under Between the Lines

This is not your average piggy bank

Posted August 15, 2012

With the startling comparison of employee costs of the annual Guelph budget pegged at 89 per cent compared to that of the City of Waterloo at 56.6 per cent, guelphspeaks has dug into the numbers.

Studying the reserves report presented to the Finance and Enterprise Services committee, more than $11,736,232 has been set aside for employment compensation reserves. That’s equivalent to $23,102 for each 1,508 full-time employee.

Now keep in mind this money is set aside for future costs of employee benefits. Ordinarily, that is a prudent move.

But digging deeper what constitutes these future liabilities?

Number one is sick leave with a reserve of $10,445,856.  That figure includes $3,530,693 for the firemen; $3,297,414 for police services; $894,104 for the librarians and $$2,203,645 for members of CUPE 241. The other reserve is for “employee salary gapping” totaling $1,290,376.

The practice of allowing employees to accumulate unused sick leave for a bonus payment upon retirement is unfair to taxpayers, most of who do not enjoy this benefit.

Let me get this straight. Suppose employee A, in the last five years of his time in Guelph earning $75,000 per year, retires after 25 years. During that time his total sick leave benefit accumulated to 450 days (18 days a year).  But during his work life, he was sick sometimes so for our comparison, he ended his career with the city with a sick leave benefit of 275 days.

Doing the math, employee A worked 260 days a year at a rate of $300 a day. This includes three to four weeks paid vacation.

His sick leave benefit when he retired was: Salary – $75,000; Divided by annual days worked =$300; Multiplied by 275 days of accumulated sick days = $82,500. This is a taxpayer-funded bonus for not taking the sick days off over the lifetime on the job

Why are taxpayers paying twice for work performed by employee A?

The same applies to vacation time not taken and accumulated. The city has a reserve set aside for this perk to be paid when an employee terminates.

But wait! Employee A was paid for every day he reported for work. Is this not double dipping – being paid twice for coming to work?

It has been a long-term goal of the municipal unions to achieve this. Unfortunately in Guelph, all employees, including hydro enjoy this benefit. Look at it this way: Why should taxpayers have to guarantee this after the employee is long gone?

The recent retirement of the chief of police, Rob Davis, is an example of how accumulated unused sick leave over the years, plus unused vacation pay, resulted in a major league payment of more than $40,000. Mr. Davis will enjoy a pension of $135,313 per year indexed at 2 per cent per year for the rest of his life.

Don’t assume the worst. The former chief is a career police officer and entitled as those are the rules. The time has arrived that the right to receive accumulated unused sick leave benefit and unused vacation, has to go.

Already council has been told that the vacation accrual reserve of $5,122,596 is to be retired and the assets distributed to other employee compensation reserves.

Incidentally, that figure in the employment compensation reserve totaling $11,736,232 was not included in the above calculation.

What is baffling why there is a Workman’s Safety Insurance Board (WSIB) reserve of $2,203,520 and the city allows a sick leave benefit on top of the WSIB benefit if any. Every employer in the province contributes to the WSIB on behalf of his or her employees, but shouldn’t that be a budget operating expense?

The way this administration works is creating many reserves or cash envelopes, if you will. Just like grandma used to do.

There is more than $40,000,000 stashed in reserve funds, why does council keep coming back to increase taxes by an average of 3.5 per cent every year? User fees are also increased while the taxpayers are pinched, due to mismanagement of the city finances.

Some reserves are needed. However this council justifies its actions be using the plethora of reserves as political tools to meet their misguided end-game.

Further, how is all this money being managed? How is it invested and where? How is money withdrawn from the reserves without having to sell assets?

Some may call having reserves is prudent but it’s nothing but a nice plump piggy bank that can be raided at will to justify the means.


Filed under Between the Lines

News Flash! Kangaroos escape German wildlife park

Posted August i4, 2012

Attention all polizei: Be on the look out for three oddly shaped escapees with small heads and big legs that are dangerous and very Australian. They are believed to be headed for the Quantas airline terminal at Frankfort. Ticket agents have been put on high alert and warned that their passports may not be valid.

Australians in Germany are cheering the ‘Roos on and offering hideouts for the trio of bungee jumping national symbols. “Go for it digger!” is heard from the ranks of Aussies in Germany.

Polizei should take caution as these escapees can box having just missed the Australian men’s Olympic boxing team.

If encountered, It is possible to lure them into custody by offering a bottle of Foster’s beer. Otherwise contain them and await experts from the Australian consulate to arrive and persuade the ‘Roos to surrender.

Officers should also be looking for two accomplices: A fox that penetrated the enclosure by digging a hole under the enclosure fence. His partner, a wild boar, enlarged the hole to allow the three Kangaroos to escape.

Anyone who sees these ‘Roos on the lam should report their location to the State police.

Otherwise, offer them a refreshing Pilsner and wish them bon voyage.

Latest news: Two of the “Roos have been captured sampling some shrimp on the barbie.

Their co-conspirators, the unidentified fox and boar, have decided to open a pub called the Fox and Board in Dusseldorf.

The Australian government is demanding a public enquiry as to how the ‘Roos were taken from the country.

One of the captured escapees was heard to mutter: “ Another 20 klicks and we would have been in Austria.”

Leave a comment

Filed under Between the Lines

The Sting, Guelph style

Posted August 13, 2012

First maestro, a little Scott Joplin ragtime, please.

The news that the city was seriously considering a new downtown library came from the chief librarian Kitty Pope.

At the time, she announced the cost would be $63 million plus another $10 million to outfit the new digs. Not only that, but she estimated completion by 2017. Further it was revealed that a Hamilton architectural consultant and a New York City design consultant had been hired to produce preliminary design elements of the proposed 93,000 square foot project to be built on the Baker Street parking lot.

Ms. Pope became the straw person in this exercise. Friends of Farbridge (FOB), Ken Hammill and his wife are promoting the downtown library project.

Then Council declared in its latest capital forecast that the downtown library was put aside for ten years.

In typical Farbridge fashion, the city has hired out-of-town experts to develop a comprehensive business plan for the project. It has now evolved into a public-private enterprise, complete with hi-rise condo atop the library, retail space, and underground parking to replace lost spaces on the parking lot.

See where we are going with this. First, is there no one on staff that can develop a business plan? Second, when did the library get pushed up the capital forecast schedule by eight years?

Taxpayers must be scratching their heads trying to understand what has happened here. If the city’s debt exceeds its own guidelines, why are they even thinking about this project?

There is no quarrel about the need for an upgraded downtown library, but one with 93,000 square feet costing $73 million plus?

It was quoted by a city official that when the capital forecast was approved last fall, “the door was left open for consideration of a new library.” Why bother to have a capital forecast if the intention is not to conform to it?

Now we have to look at two other capital projects that council has proposed. The South end recreational facility pegged at $37 million, and the proposed riverside park at Wellington and Gordon streets to cost an estimated $16 million.

Where do they fit in this apparent renewed effort to plunk another $73 million downtown?

If Mayor Farbridge is anything, she is a determined woman.

Her vision of a vibrant and exciting downtown to be enjoyed by families, and a centre of Guelph culture, is fraught with her desire to leave office as the mayor who revitalized downtown Guelph … at any cost.

No amount of taxpayer subsidized hi-rise downtown condominiums or splash pools or libraries or pussyfooting with the University hierarchy can change the booze magnet for the young that exists downtown.

In six years, the Mayor and her majority of council have failed to address this in a comprehensive manner. No action plan exists because of a lack of political will. It’s plain council doesn’t want to address it because of the liquor clublobby, (33 bars operating at last count) and the ties to the University.

In fact, the same problems exist with student housing in single-family neighbourhoods where houses have been converted to accommodate mini-apartment units.

Council did look at the scores of complaints of residents, regarding the growing influx of student housing in their neighbourhoods.

The decision was made that the issue was too hot to handle and staff advised that stopping the practice would result in action by the Ontario civil Rights Board. This council has the tools to protect the single-family neighbourhoods. Stop issuing building permits for these conversions and enforce the bylaws for renovations that have been done without a permit.

The question is should Guelph taxpayers finance a new downtown $73 million Library to provide service to those wanting to use computers?  The modern library has evolved and the decline of book borrowing due to Internet access and other cultural changes has made a huge library unnecessary.

No thanks. We’ve already experienced the Mayor’s Taj Mahal syndrome with the $50 million overbuilt compost plant and collection system.


Filed under Between the Lines

We take you now to another Galaxie … where transparency reigns

Posted August 10, 2012

I was given the opportunity to travel to another community where the attitudes are refreshing in how citizens interface with city council to work together. The city is Waterloo, where Council has formed a Citizens’ Budget Task Force to create financial transparency of the city’s finances and management.

It’s textbook on how political democracy should work with a free flow of information to all citizens.

The odious comparison about the way our city is being run is straight out of the theatre of the absurd.

Let’s start with the basic recommendations. You don’t have to have an accountant’s degree to understand where the Waterloo citizens’ committee is headed.

1.  Propose an annual report, easy to understand, with a 10-year trend table of balance sheet, income statement and total reserves. accompanied by a detailed management discussion and analysis.

We interrupt this programs to ask: “When did this ever happen in Guelph?”

2.  An annual operating performance analysis matching actual to yearly budget performance.

Jeepers, what a novel suggestion. Is anyone listening in City Hall?

3.  Establish an annual capital expenditure tracking report with original             budget, revised budget and actual expenses itemized by project.

For starters, let’s talk about the real cost of the Civic Museum and the           compost plant.

4.  Publish all collective bargaining agreements going forward.

Good grief Charlie Brown, they want to know all about us!

5.  Abandon the use of the Municipal Price Index (MPI) for setting the rates of           the annual property taxes. That authority rests with council.

Well, that’s not how it works in Guelph.

6.  Direct staff to investigate a more broad-based method of setting tax rates.            Take into account citizen affordability such as changes in personal             household incomes.

With most of Guelph’s senior staff living out of town, it may be tough getting             the handle on that proposal.

7.  Consider during the budget development process, both the previous year’s           budget and the actual performance.

Gawd! I hope they are doing that but we’ll never know because it’s a secret, right?

8.  Compare compensation practices, including pensions and benefits, against           the local market, adjusting for market conditions in both the private and public employment sectors.

That’s a great suggestion. But will Guelph Council have the political will to           consider it let alone enforce it?

9.  Investigate the magnitude of the city’s future employment liability from           existing retirement plans and investigate options to mitigate any major             exposure.

This is the most pressing financial liability the City of Guelph faces in the near and long term. With a staff costs of salaries, wages, benefits and pensions, now at 89 per cent of the total city budget, the compensation threshold has been breached.

The City of Waterloo’s staff compensation portion of its budget is 56.6 per cent.

Guelph taxpayers need to see a different approach to budgeting. It starts with the staff being informed that last year’s budget is not the starting point but the absolute point.

There is a culture of entitlement pervasive among certain Guelph senior staff members. What is needed is a culture of efficiency that holds the interests of the taxpayers paramount.

Citizens should become aware of the serious problems the city faces and band together to force change.

All you have to do is compare.

Let me know what you think. – gerrybarker


Filed under Between the Lines

Comparing apples with pumpkins

Posted August 8, 2012

Is Guelph’s unelected Chief Administration Officer’ salary out of proportion with other senior unelected officials in other municipalities?

Ann Pappert, hired last fall to be the city’s CAO, brought her old $160,000 salary into the job. Within a few months it was increased to more than $190,000.  The former CAO, Hans Loewig, was paid $202,000.

Now lets examine what the Region of York pays its unelected Chief Executive Officer and Chairman, Bill Fisch. He presides over a region composed of nine municipalities with nine councils.

In 2011, Bill Fisch was paid $207,654.

Does it make sense that the chief executive in charge of the region with a population of 1.1 million should be making only $17,000 more than the CAO of Guelph, population 122,000?

Guelph council approves all these executive salaries, usually on the advice of staff. Chief in charge of this process is the Executive Director of Human Resources, Mark Amorosi. He is the key senior staffer who handles all employment issues.

So why is Guelph paying senior management salaries that are in the same league with those of regional governments?

The Mayor Farbridge-dominated Guelph council has allowed five years of unwarranted salary creep by its senior managers and other staffers.

For example, would the individual running Cott Beverages expect be making close to the same salary as the person running Coca Cola?

The problem with awarding remuneration to city staff is that the arbitrators themselves are members of the city staff. Further, city council has rolled over at salary review time every year accepting the parity line from Mr. Amorosi and his staff supporters.

One can understand that parity is logical when comparing apples to apples, not apples to pumpkins.

It won’t change until the 2014 election. And if Mayor Farbridge and her supporters lose their grip on council, you can bet the farm that staff salaries will be throttled back even if it means reducing staff.

Of course this goes back to that perverted system of establishing next year’s tax increase. The staff requests an 8.5 per cent increase while council stickhandles around the issue, mumbling about a 3 per cent increase in taxes.

And with that, they defeated a motion by Coun. Cam Guthrie to keep working in August to do the city’s business, including discussing the 2013 budget.

The council mumbling was accompanied by the mournful wail of: “We’ve never done that before.”

Four councillors were ready to work. The other six attending, including the Mayor said no. Something to remember in 2014.

Creating a budget is a serious and frequently tough job. First, council should inform the staff that the budget figure available in 2012 is the maximum available for 2013.

Instead of accommodating the staff wish list, instruct them to look at ways to cut costs if they want to expense and justify new items.

The staff proposed a $15.5 million increase for 2013. Of that, $5.5 million was composed of staff increases in salaries, wages and benefits.

Now do you see the problem?

Harrumph! Apples and pumpkins, indeed.




Filed under Between the Lines

How the public trough is getting drained

Posted August 1, 2012

This week there was a flurry of reports about the public service pension plan known as the Ontario Municipal Employees Retirement System (OMERS).

As background, OMERS has $55 billion is assets to cover the retirement needs of 263,000 municipal employees in the province. But any shortfall in the amount of funding required keeping the sacred promise to employees lies with the municipal taxpayer. Contributions made last year went toward covering 2/3rds of the shortfall and the balance went toward keeping the pension promise to current employees.

Today, the OMERS funding shortfall is predicted to reach $9.7 billion in 2013

This data is prepared by the expert, non-profit pension organization called Fair Pensions for All.  The Guelph area representative is Sue Ricketts who revealed a number of the issues to make up this commentary.

Here’s an example: An OMERS member who retires after 30 years of service will receive back in pension payments, on average, up to ten times the contributions (plus interest) they paid to OMERS during their career.

The pension problem is here now

Let’s sample how some of the top Guelph managers’ pensions will be paid out if they work for 30 years and retire at 65.. The provisos are: The amount is based on a life expectancy of 85; working at current salary level for five years; and indexed at 2 per cent annually upon retiring.

Salary                   Annual pension          Lifetime  payout

Chief of Police                                  $209,733            $135,313                        $4,782,550

Chief Admin. Officer                       $195,818            $125,573                        $4,438,300

Fire Chief                                             $169,320            $107,024                     $3, 782,697

Director of Operations                   $167,843            $105,990                      $3,746,154

But there is more.

Those figures do not include any accumulated sick leave benefit, payouts for unused vacation, retirement health benefits, early retirement availability.

In fact, statistics show the average employee retires at age 58.

Pension payments have almost doubled in five years.

How many private sector employees have that kind of a deal?

Keep in mind that the municipal employee contributes half of the allotted amount to OMERS while the taxpayers must match it.

Next year, Guelph taxpayers will pay OMERS $961,000 as its share. This is part of the projected total increase of $2.6 million for employee benefits. Consider, in 2011 the cost of employees was $155.2 million of the total budget spending of $174 million. That is more than 89 percent of city’s total budget in 2011. Further, it is an increase of $10.5 million more for staff pay and benefits from 2010.

In 2011, the total city budget increased by $10.7 million. Of that, staff remuneration took almost all of it.

In 2011 the average salary and benefits package for the 1,506 fulltime equivalent employee was $103,054. Five years ago the average was $82,563. Considering that the city went through a global recession, the staff did not suffer in any way in terms of their pay and benefits. Nor did they experience layoffs or loss of benefits as was experienced by many employed in the private sector.

The taxpayers provided the ultimate in security for its employees.

The hidden story here is the growing cost of city staff salaries and benefits. This is not only our obligation to current and past employees, but to future employees.

The number of retirees will grow at the historical rate in the past five years of 6.24 per cent increase in additional staff.  Just think., at the present rate of expansion the city staff could number 2,222 by 2,021.  That means that within 15 years, 2006 to 2021, the city staff will increase by 716 employees, but will the population of Guelph increase to 240,000 residents?

That’s not going to happen.

The city replies

Mark Amorosi, the city’s spokesman on employment matters, wrote that there was nothing to worry about. Well, it’s his job to reassure the staff that there may be an enemy at the gate.

But consider the facts.

In the early 2000’s, OMERS declared a pension holiday and employers and contributors made no contributions for two years.  They didn’t stop there; they increased pension benefits for all its members.

The reason they did this was because the system was receiving up to 11 per cent return of their investments. Then, along came 2008 and the collapse of the stock markets. Interest rates on fixed-income investments fell below 2 per cent.

As a result, the OMERS’ portfolio took a dramatic hit and its actuaries declared the situation had gone from being flush with assets to being dramatically underfunded. Since then the unfunded deficit has grown to $7.3 billion. It is anticipated it will increase to more than $9.7 billion by the end of this year;

Mr. Amorosi downplays all this stating the growing OMERS shortfall is really only “an actuarial deficit.” He claims it will decrease to zero in the next 10 to 15 years. And I’m the Phantom of the Opera

NOOO problem!

First, he speaks about a provincially approved plan in 2010 for OMERS to deal with the “actuarial deficit” by jacking up the contributions to rebuild the pension investment pool.

That’s a trifle misleading, sir. The taxpayers of Ontario’s municipalities are responsible for any OMERS failure to provide promised benefits. That includes employees past, present and future, not the Province of Ontario.

Municipal employees come and go such as occurs in other employment sources.  Regardless there are pension obligations that must be guaranteed by municipal taxpayers.  There is growing evidence that this obligation is dramatically increasing staff costs across the province. Salary and benefits increase exponentially along with growth of staff in some communities as their populations grow.

Finally, I am wary of the Municipal Employer Pension Centre that represents municipal pension interests – a creature of the Association of Municipalities of Ontario. Are they advocates for better municipal pensions on behalf of the taxpayers or growing the pension benefits for the employees?

There is growing public concern about the growth of municipal employee benefits.

Guelph has a problem that will be difficult to fix. If it is not brought under control, the future finances of the city will experience a revenue deficit that will be unable to meet the rising costs of staff pensions and benefits.

More on this subject pending


Filed under Between the Lines