Monthly Archives: October 2012

Is it fair that Guelph taxpayers subsidize the University?

Posted October 31, 2012

By Gerry Barker

Editor, guelphspeaks.ca

More than four years ago, this writer complained about the provincial government formula for Ontario’s universities paying $75 per student in lieu of property tax. It is known as the ”Head and Bed” tax.

It was established in 1987 and has never been increased in 25 years.

This was a decision by the provincial government of the time. It has been perpetrated by succeeding administrations.

A lot has happened in Guelph in 25 years.

The University of Guelph, a former Agricultural College – “Go Aggies” – owns the largest tract of land in the city. In the following years, the university developed industrial, commercial and residential properties that were built on leased land providing ongoing land-rental income.

Is it the function of the University to be in the development business?

This was never intended in 1987 when the provincial government’s decision was to protect the interests of all post-secondary institutions in the province. Protect them from whom? The municipal taxpayers?  Most of the affected municipalities encountered growth spurts that would change the balance of property tax sources forever.

Succeeding provincial governments neglected to protect the municipal taxpayer from subsidizing the growth of the University.

Instead, as the municipalities grew exponentially, the universities expanded to accommodate more and more students.

This was amplified in the City of Guelph, where the only university in southern Ontario that owns hundreds of acres of land within the city. This unique situation has impacted the collection of property taxes that the city requires to function.

This sweetheart deal falls on the shoulders of the taxpayers in the city who in effect, subsidize the operations of the university.

How so? All you have to do is drive down Gordon Street and along Stone Road to see the growth of commercial and residential buildings sitting on University leased land.

Accompanying this 25-year growth in assessment, it is the city’s responsibility to supply transit, infrastructure including water and sewage disposal, waste disposal, police and fire and medical and hospital services.

And the Guelph taxpayers experience some 22,000 students dropped into their community for eight months every year.

So when MPP Liz Sandals says there is no money at Queen’s Park to increase the “Bed Tax” rate, she misses the point.

The province sets the rate. It does not pay the municipalities. The post secondary institutions pay the municipalities based on the 25-year old formula.

She argues that the growth has brought huge economic value to the city.

No question, the university has made major contributions in economic growth, cultural life and has brought honour to the city through its research and development of the human condition.

While the university has enjoyed a cordial relationship with the city, the provincial “Head Bed” formula forces the city to assist and support the university’s growth using taxpayers dollars. These are the same taxpayers who pay a municipal property tax plus user fees; a provincial sales and services tax; Provincial income tax and Federal income taxes.

It should be noted that the Guelph taxpayers are subject to increases in assessment of their properties. The University has a locked-in deal that doesn’t permit increases in the property assessment of its institutionally owned properties.

So when our MPP suggests the cupboard is bare at Queen’s Park she neglects to account for the steady flow of cash coming from the taxpayers of Guelph.

So it is difficult to understand the intransigence of the provincial government to change the payment in lieu of property taxes in Ontario’s post secondary cities

The Sandals rationale echoes a similar message by the Guelph Chamber of Commerce, whose Chief Executive Officer. Lloyd Longfield, claimed the university contributes more than a billion dollars to the Guelph economy.

Let’s take a look at that. For every dollar spent by the university and its students the provincial government is getting an 8 per cent piece of it. Just like the Guelph taxpayers who must pay the HST (eight percent plus 5 per cent federal GST) on most purchases they make.

So when Ms. Sandals is unsympathetic to the issue of Guelph taxpayers subsidizing the university, she should look around the city.

First, the University employs 3,723 employees. In contrast, Linamar Corporation employs more than 12,000 in Guelph and as a corporation pays full property taxes. In fact, Frank Hasenfratz, founder of Linamar, said on BNN television recently, that he was concerned about the high cost of property taxes in the city. His company operates some 19 manufacturing plants in Guelph.

Now compare that, in terms of economic production with the property tax contribution of the University of Guelph.

The Liberal government of Ontario, of which Guelph MPP Liz Sandals is a member, has made no attempt in its eight years in office to correct this inequitable property tax situation.

Remember, the Guelph taxpayer supplies more than 93 per cent of the revenue required to operate the city. The university shares many of the benefits of living in the city but does not pay for those services through property taxes.

There is a coalition of Ontario municipalities, of which Guelph is part, that is attempting to correct this inequity. They estimate, during 25 years of inflation, that the current $75 per student should now be $145.

If the province acknowledged that figure, Guelph’s “Bed Tax” would increase from $1,600,000 to  $2,900,00 this year alone. This increase is vapour funds. Don’t have it, won’t get it and despite the efforts of the Coalition of Ontario municipalities to changer the rate, the Ontario Government is in chaos with the Premier resigning and proroguing the Legislature.

The governing Liberal Party is holding a leadership convention in January and will no doubt call an election sometime in the spring once the budget bill is defeated by the opposition.

All these converging elements make it difficult to change the “Head Bed” tax rate.  Perhaps a new government will change this inequity.

2 Comments

Filed under Between the Lines

Welcome to the Guelph World Series

Posted October 26, 2012

By Foggy Fielder

Sports reporter

We take you now to 1 Carden Street, the site of the 2012 Guelph World Series. Let’s see if we can speak with Mayor Karen Farbridge, general manager of team Progressives.

“Mayor, what are your views on maintaining a team code of conduct that is attached to a code on ethics?”

“We hit a home run the other night with our designated hitter Ian Findlay putting that pesky Cam Guthrie in his place. It was brilliant, if I do say so myself.”

“Mayor, is it fair that councillors cannot speak out in public if they believe your team is misleading the series with foul balls?”

“Let me remind you that maintaining decorum on the field is just as important as building the new stadium er, new city.”

“How’s that rookie from south field, Todd Dennis, hitting the ball these days?”

“Oh! He’s a comer. Good on the inside pitch and a great guy in the locker room.”

“Some call him Dennis the defector because he told one story in the minors but changed his pitch since coming up to the bigs.”

“You couldn’t be more wrong. He’s made a great contribution to our team. Look at his record since moving up.”

“Mayor, there has been a lot of criticism about your hand-picked manager, Ann Pappert. Fans say she spends too much time supporting your team and ground crew without listening to the other team.”

“You’ve been listening too much to the fans and not enough about the great work our manager is doing. She has control of the clubhouse and speaks her mind when necessary.”

“She seemed to rebel when she repudiated your team for “regressive” thinking that was not “palatable” in respect to next season’s schedule.”

“I’m confident we’ll field a great team for the 2014 season despite what the other team plans.”

“But Mayor, this game has nine innings. Isn’t it a little early to be predicting another victory for your progressives team when the other team has not yet come up to bat?”

“You’ll have to excuse me, I have to consult my management team, James Gordon, Ken Hammill and Cathy Downer who are in the bullpen getting ready for the next game.”

There you have it.

The Mayor’s team is composed of Short Stop, Scooter Piper; Pitcher, Off Speed Maggie Laidlaw; Left Fielder, Karl Wettstein; Bat Girl, June Hofland; Clean-up Man, Ian Findlay; Bunter, Lise Burcher; and Mr. Flexible, Todd Dennis.

All-star material or will they be beaten in the final innings?

Is this a great game, or what?

6 Comments

Filed under Between the Lines

An Unholy Trifecta

Posted October 26, 2012

Sometimes the world unfolds as it should not.

The city recently announced 8% increases in water & sewer rates. This is after a record number of months of a watering ban that reduced consumption.

The purported reason behind this money grab is the added burden of compliance with water standards. That line has been flogged to death for several years now.

What it really hides is the fact that the fixed costs of the water system are too high and have to  be covered by increases. For any new development, the developers should pay upfront. I’m too broke to pay for someone else’s new house services!

Last week the Tribune carried an article on the use of compostable green bags for the newest white elephant. Comment could be made to the MOE. The catch is the city released the info to the paper one week before the deadline for public comment.

It was a stroke of news-management brilliance withholding information until the last moment and then releasing it on a Friday. They can then claim only a few citizens commented. Talk about managing, or is it mismanaging, information to citizens?

Yesterday in the Tribune, the czar of garbage reiterated that yard waste pickup will continue twice a year for 2 years. Thereafter, yard waste can be used to  “top up” the little green bins. Once again, the numeric illiteracy of the waste mismanagement department is glaring!

By the time I use my 10 kraft paper bags  to top up the green bins at the rate of one half a bag per week, 20 weeks will have passed and spring will have arrived. However, in the meantime the paper bags will have rotted in the weather. Brilliant.

The Trifecta of Larry, Moe, and Curly is alive and well in Guelph.

Glen N. Tolhurst

Guelph

 

Leave a comment

Filed under Between the Lines

How the city double dips on the backs of condo owners

Posted October 25, 2012

It may come as a surprise to many people that the city, through the property tax collection system, charges a substantive number of residents for services they do not receive.

In Guelph there are hundreds of condominiums residents that the city refuses to service for garbage collection. They must resort to paying independent contractors to remove garbage that is not sorted. This flies in the face of this administration’s policy demanding the homeowner pre-sort the garbage.

The reason for this inequitable situation varies depending on whom you talk to.

The city does not provide some basic services to the condo orphans, yet it still gets paid not for doing it. In polite circles that’s known as double dipping.

Coun. Ian Findlay is quoted as saying the residents cannot cherry-pick what services they require from the city. That’s understandable, but misses the point.

It’s the city that is the real cherry-picker by deciding, without public input, that it is not going to provide certain services but will charge the household anyway.

From personal experience this is exactly what happens. We live in a land condominium development of 23 freestanding homes. The city’s General Manager of Waste Management attended a meeting of the Homeowners Association but made no promises.  We later learned that there was a problem with the collection truck turning around at the end of our street. The fire trucks can accomplish the task but not the waste collection vehicles. One might believe that is a competency issue.

So owners are forced to pay a contractor to remove their waste plus paying for it through their property taxes. They also pay for snow removal and street and infrastructure maintenance.

What is mystifying in all this is why the current administration crows about its sustainability strategy but fails to supply prescribed waste removal for many of its citizens.

So residents are forced to send their unsorted waste to the landfill because the truck can’t turn around, or whatever excuses that can be cooked up.

I do believe the emperor is not wearing any clothes.

4 Comments

Filed under Between the Lines

More on how the city manages your business

Posted October 21, 2012

By Gerry Barker, editor guelphspeaks.ca

Often when reading the reports of city management my eyes begin to water in disbelief.

How can a well-paid and professional city staff admit with a straight face, that they failed to notice the rising costs of using outside lawyers?

Katherine Gray, city service, performance and development coordinator, says hiring outside legal services historically costs some $400,000 annually. This year she estimates the cost will be $850,000. Whenever the word “estimate” is mentioned, duck!.

Two things have caused this doubling of costs. One is that departments, other than legal services, have hired outside lawyers without going through the city’s Legal Services department. The other is “an explosion” in appeals to the Ontario Municipal Board (OMB).

Hmmm! It’s a given that the staff should manage their departments within budget restraints. One would expect that executive management would be aware of other departments bypassing legal services to hire their own outside lawyers.

Why is there no check on this basic requirement to control external legal costs?  The man overseeing legal services is Executive Director, Mark Amorosi, who stated: “there are some policies that do restrict our ability to be agile in the moment.”

Perhaps there should be less agility and more attention paid to controlling costs.

Somewhat belatedly, the staff is recommending that budget practices be changed so that all legal costs go through the Legal Services department.

Joe and  Jill taxpayers must scratch their heads wondering why this is not common business practice. Of course those costs must go through the Legal Services Department. And a request must be accompanied with a business plan to justify the need.

How else can outside legal costs be controlled?

The increase in appeals to the OMB reinforces the claim that Guelph is a tough place to do business. A senior member of staff, who resigned last year, said the city has turned off potential commercial and industrial operations hoping to come to Guelph. The enquiries were bureaucratically stifled to the extent that potential business took a pass on the city and went elsewhere.

A few years ago I interviewed Lloyd Longfield, CEO of the Guelph Chamber of Commerce. He was effusive about potential Asian industrialists considering the city to establish plants and create jobs.

Wonder whatever happened to that?

2 Comments

Filed under Between the Lines

Potpourri – Part Two

Posted October 20, 2012

It takes a city to make a village

Did you ever wonder who decided that Guelph would be the capital of waste management in the country?

No? Neither did the more than 14,000 voters in 2010 that re-elected Mayor Karen Farbridge and her majority of Council followers.

Was it ever determined that they had the right to spend millions of taxpayer dollars to create a web of waste disposal facilities that converted all manner of waste? Did taxpayers agree that we would service the needs of other municipalities?

This includes 60,000 tonnes of household and commercial wet waste. Then there is dry waste or recyclables that is drying up feedstock because of a superior operation in Cambridge that is automated to handle dry waste at half the cost.. Next comes the sewage sludge, the by-product of 20,000 tonnes of treated sewage, which must be disposed.

So, your council, in just six years, has managed to spend more than $75 million to achieve the majority of council’s goals of misguided sustainability.

Example: Spend $34 million on building an organic composting plant with a partner, Maple Reinders, that is six times the required capacity of Guelph’s wet waste requirement. Then spend another $15 million on a waste collection system. But don’t reveal the details of the contract or the costs

Throw in the plant that has yet to reach operational capacity despite delivering some 1,300 tonnes of compost, none of which was sourced from Guelph. Whose wet waste went in there?

It’s not over. The city plans on spending another $20 million of special glass-lined stainless steel storage tanks to store the sewage sludge generated over the cold months. Then enters a deal with Lystek, the human waste fertilizer company from Cambridge, to “re-water the sludge” and spread it on agricultural lands as fertilizer. How they do that is disgusting, using hot human waste from outside sources.

Is this what you voted for?

*            *            *            *            *

The attack of the ash tree borers

You gotta love it. Who doesn’t like trees? Guelph has some great areas where trees form a delicious canopy to give us comfort of shade and protection from the sun’s rays and absorb the carbon emissions of our society.

Taxpayers should applaud the work of stopping the infection of the insects on ash trees. But that’s not the only brand of tree in the city. Our city is populated with trees of many species.

Why then is it necessary to hire four, full time employees to cope with protecting a single species?

The committee responsible for this idiotic request moved it up to council for approval.

Are none of them listening to the rumble of discontent about the high costs of civic employees across the province and Canada?

To make the argument that the committee wants to see Guelph from space as a forest, is ludicrous and typical of the agenda of the Farbridge administration.

As Oliver Twist said: “More, please.”

*            *            *            *            *

How we taxpayers were disadvantaged

Most taxpayers are wondering: ”What happened?

In 2010, Guelph voters elected Mayor Karen Farbridge and a slim majority of her followers. The key, included an artful political move was to persuade Conservative Todd Dennis to join her majority. This gave her complete control of council with an majority of eight supporters, to five councillors who were elected to change the direction the Farbridge administration was taking the city.

The Dennis defection, after proclaiming he was dedicated to reducing taxes and establishing a recreation centre in the growing South End of the city, turned out to be a sham.

That has not happened. And those voters in Ward Six should take note for the municipal election in 2014. Dennis masqueraded as a conservative but joined the Farbridge team in a New York minute. These are the same councillors who proceeded to ladle more tax money on their specious projects, regardless of the consequences of future needs of the city.

Here are the three reasons why we have a tainted public administration.

1.  Those with power – politicians, police and bureaucrats – don’t believe they should share that power. In their sphere of controlling influence,  they dismiss the rights of citizens to share that power.

2.  Those in power frequently dismiss those who oppose and complain. They label thee objectors in a pejorative way and use surrogates to attack those objectors as ignorant, dangerous and out of touch.

Is this starting to sound familiar? Think of the tactics used by the Farbridge supporters in the last two elections.

3.  Citizens must use the tools they possess to keep true democracy alive in their community. This includes solidarity, standing up to authority and researching their objections of the course taken in their society

This is a mirror image of the civic Guelph political scene. Power is absolute.  Only the people can change it.

Reform must come and the people sense it.

*            *            *            *            *

Civic salary creep commits Guelph taxpayers to future uncontrollable costs

A recent post compared the salary of the Chairman of the Regional Municipality of York to the Chief Administration Officer (CAO) of Guelph. The chairman is unelected as is the CAO.

The York guy made $207,654 in 2011. He presides over 1.1 million people and nine municipalities with nine councils.

Guelph CAO, Ann Pappert, presides over a city of 122,000 and earns $191,000 per year.

This is a base example how the Farbridge administration has escalated senior staff salaries and benefits in the past six years. The problem lies with the arbitrators who decide these increases  and they are the city staff itself.

These decisions to consistently increase staff compensation have resulted in an exponential flood of costs to the taxpayers.

As a result, Guelph’s annual budget is now composed of 89 per cent being paid out for staff salaries, wages and, simply extraordinary benefits.

Want a comparison? The City of Waterloo pays 56.6 per cent of its budget for staff costs..

Is there a plumber in the house?

22 Comments

Filed under Between the Lines

Here’s how your city manages your business

Posted October 14, 2012

For some time there has been reluctance on the part of many businesses to come to Guelph and set up shop. In fact, there have been two independent consultant’s reports that Guelph city hall is a difficult place to do business.

There have been major corporations wanting to establish in Guelph, thereby creating jobs that have given up dealing with the city. They cite delays in applications, onerous regulations, generally dealing with an attitude that they are being done a favour.

The absence of common sense and good business practices prevails in many transactions. It illustrates that the lack of experience by the administration to act on behalf of the taxpayers instead of their personal agendas.

Here are three case studies that have recently come to light.

The first concerns the former civic museum building. Last summer, two bidders for the property approached the city. One of the bidders was a couple that expressed a desire to convert the heritage building into an arts and media centre for local artists.

The city had listed the property for $949,000 in January 2011, with a broker. In June of this year the city received two offers for the property. One was not identified but the other, Tyrcathlen Partners, made a presentation to a closed session of council that was supported by Guelph Civic League founder, James Gordon.

Yes, that’s the same James Gordon who ran in the last Federal election under the NDP banner. He is an unabashed supporter of Mayor Karen Farbridge.

Council accepted the Tyrcathlen offer, believed to be less than $700,000. Provided the deal closed by July 6. What followed were postponed closings, culminating with a new closing date on November 30, four months later.

Why is the city being so charitable toward this group? With another bid on the property that was considerably more than the Tyrcathlen Partners, why is the city being so amiable and accommodating? Suppose Tyrcathlen cannot close the deal, what happens if the city goes back to the other bidder and offers the property? Why would that bidder offer his original bid when he discovers the low ball bid the city accepted from Tyrcathlen?

This is how political favouritism trumps good business practice and the taxpayers are the victims.

*            *            *            *

The second case study is about the sale of city property in the Hanlon Business Park. The city investment in these lands is more than $10 million.  Peter Cartwright, the industrial promotion manager, who is selling the property, told the committee responsible that the cost to the city to develop the more than 400 acres was $266,000 per acre.

He said sales have been completed totaling 14.8 acres One parcel of 2.1 acres sold for $265,000 per acre. The other, 12.7 acres, was sold for $255,000 per acre.

The manager told the committee that the city had to competitive with Waterloo Region and the Greater Toronto area.

He is recommending that the council approve a per-acre selling bracket of $300,000 and $325,000.

What future interested organization would pay in that range after knowing that the previous sale price per acre was $45,000 less than the city’s proposed base asking price?

You know, the city would be better off authorizing the sales in the business park to qualified industrial and commercial real estate experts. This would broaden the market for potential clients wishing to establish in Guelph. It will happen without the red tape and delays that has been the hallmark of the city ‘s unsuccessful attempt to sell lots in the park. This park was ready for development three years ago. It’s time to enlist the aid of professionals and get out of the way.

The curious aspect of this is that the city manager of realty services is not involved.

*            *            *            *

A final case is the attempt by the city’s waste management to try and keep the recycling waste facility open by importing feedstock from New York State and Michigan. Already the Guelph Waste Management Coalition has protested to the Ministry of Environment that the province’s recycling mandate excludes foreign sourced dry waste materials.

There is a facility open just down the road in Cambridge that electronically sorts recycles waste at a cost much less than the Guelph hand sort operation. Operated by Waste Management, one the world’s leading waste processors, it has resulted in a loss of feedstock to the Guelph plant.

Closing the Guelph sorting facility and sending the recyclable materials to Cambridge would cut the city costs by a larger measure.

Sound like the perfect solution? Unfortunately, the majority of council would not support it because of their desire for Guelph to become the epicentre of waste management, ergo sustainability.

Economics 101, if a plant is unprofitable than sell it, close it or seek a partner to lower costs. It’s a no-brainer.

Please. Three overworked administration buzzwords not to be uttered again: Sustainability, Robust and Strategic.

You’re welcome.

 

 

13 Comments

Filed under Between the Lines