For the audit committee: That dog is off the porch

Posted March 16, 2013

The recent dust-up regarding the assessment of how well the city is being run by the audit committee, leaves out a massive amount of history that paints quite a different picture.

The belated naming of an internal auditor of city operations and finances after six years, amounts to a miniscule piece of operations under Mayor Karen Farbridge and her loyal cohorts on council.

It’s a lot of smoke and mirrors that paint a glossy picture of management practices in which there are few checks or balances. The audit committee assesses a small portion of current operations but does not dig into the tawdry past of city operations. It examines a recent history including social engineering inflicted schemes and strategies and multi-million dollar capital expenditures that lacked business planning and oversight.

Besides, the audit committee has no say in how the city is being managed it only addresses and reports on current operations as pertaining to budget.

The result is an ever-increasing city debt exacerbated by a huge taxpayer guarantees of city staff pensions for years to come.

The city debt has more than doubled in the past six years. The staff has increased by more than 400, accompanied by increasing salaries and benefit packages. The staff operating costs are 20 per cent higher than neighbouring cities.

Changing the system of waste collection and disposal has cost more than $52 million. Yet, the volume of recyclables sorted in Guelph is steadily dropping following the opening of a new, Waste Management Corporation automated plant in Cambridge.

Yet, the population of Guelph has only increased by 5.8 per cent in five years.

The financial management of Guelph’s $400 million corporation has seen five top financial managers since 2007. The current Chief Financial Officer (CFO) arrived last summer with experience in senior civic management but no formal degree in financial management. Two of his predecessors were fired and both had formal financial training. One hire only lasted a week. Another, an assistant treasurer, acted as CFO for a year until resigning and moving to the Wellington County financial department.

Ask yourself: Is it not essential to have a CFO who possesses academic credentials as well as experience in managing a civic public corporation? Isn’t continuity in this vital position vital to the financial health of the municipality?

Well, we had a good one but he was terminated because he wasn’t ready to accept the Farbridge agenda in 2007. The capable Chief Administration Officer (CAO) was also dumped about the same time. Both the loss of these key executives cost the taxpayers more than $500,000 in severance not including the loss of invaluable experience.

The current CAO has no formal degree in financial management and a civic management track record that lies chiefly in the cultural and social areas. She is currently paid more than $200,000 a year plus perks to oversee the staff. She reports to the mayor.

The real story of Guelph’s current six year history lies in the dodgy social engineering schemes, proliferate hiring of outside consultants and the high cost of litigation.

The most current lawsuit being adjudicated in Brampton is an example of how the Mayor and council choose to gamble with taxpayer’s funds. The case involves the dismissal of contractors of the new city hall, Urbacon Building Group in 2008. Urbacon sued for wrongful dismissal claiming $19 million in damages. The city’s gamble is that it will win including its counter suit of $10 million, plus $4.2 million for paying off the subcontractors, architects plus the legal costs of conducting the city’s case against Urbacon.

On the other hand, the evidence may have the judge conclude that evidence showed Urbacon was dismissed without cause. The city’s downside is massive in this event. First, awarding the $19 million that Urbacon is asking, plus losing the $4.2 million already paid to subcontractors and the legal costs. Hamilton lawyer Derek Schmuck was hired by the city to handle its case. Legal costs will be substantial given the length and preparation for the trial.

This will be a difficult case to adjudicate. Evidence so far indicates that there were many “change directives” coming from the city and the architects. Whether this contributed to the delays in completion remains to be seen.

In 2014, the citizens will have their opportunity to judge the performance of this administration. While it seems a long way off, there is widespread discontent with the leadership of the city today.

As for the role of the new audit committee, that dog is off the porch.

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