Monthly Archives: July 2013

A moral dilemma

Posted July 31, 2013

A recent article in the Kitchener/Waterloo Record stated that the Region of Waterloo was losing $1,166,300 million a year with its wet waste being processed in Guelph’s Organic Waste Processing Facility (OWPF).

Three years ago, the Region decided it wanted to process its organic material and requested proposals from Hamilton and Guelph.

The Hamilton proposal was a pay-as-you-go arrangement with no set amount to be shipped. The Guelph proposal included a fixed amount of wet waste feedstock pegged at 20,000 tonnes over ten years.

In its wisdom, the Regional council decided to accept the Guelph proposal. Then came trouble, they were only able to ship 9,100 tonnes as only 15 to 35 per cent participated in the Region’s “green bin” collection system that contains organic materials.

They still have to pay $107 a tonne regardless if the Region uses its contracted tonnage or not. The Regional contract with Guelph is worth $2,140,000 a year. The shortfall of tonnage amounts to a loss to the Region of $1,166,300.

A few weeks ago, Guelph waste management general manager, Dean Wyman, announced the city was seeking to sell capacity processing waste from other municipalities. This perplexed folks who believed the capacity of the plant was taken with the city of Guelph processing 10,000 tonnes and the Region of Waterloo providing 20,000. Guelph has maintained the capacity of the plant is 30,000 tonnes per year.

To recover the cost of the lack of wet waste volume, the Region still owns 20,000 tonnes of capacity at the OWPF and should be able to control its share. Instead, the Guelph waste management team decided to sell the tonnage not being utilized by the Region.

There are two issues here. The Regional council failed to understand that if you install green bins for wet waste collection, it has to apply to everyone in the collection area, not just a small percentage. That’s a whoops!

The other issue is a moral one. Should Guelph double dip and sell Waterloo capacity while taking money from the Region when it cannot meet the capacity agreed in the original contract? Should not that contract be renegotiated to accommodate the needs of the Region and Guelph?

Guelph’s mistake was saying it would sell the unused Regional capacity to others without consulting the Region that owned the capacity.

In order to change the terms, the Region must be prepared to work with Guelph to find additional clients for the OWPF to replace the unused capacity of more than 10,900 tonnes.

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The greatest victim in Guelph’s civic government is the truth

Posted July 28, 2013

Flashback to May 15, 2012, guelphspeaks commented on how the city administration manages your money. First, here is an extract of that post.

Let’s take Guelph Transit as an example of windfall budgeting.
Last year (2011), the Transit system was being redesigned to interface with the new central transit terminal to make routes more cost effective. The plans were the result of more than a year of study that included costing the effort. Now, one would assume that there was careful consideration before casting the revised plan in stone.

Wrong. With a budget exceeding the $12 million taxpayer subsidy, Guelph Transit is now projecting a $450,000 deficit over budget projections for 2012.

The city’s March operating variance report states the cause of the transit budget over-run was higher fuel costs. Certainly there has been an increase in vehicle fuel costs since last summer. But, one would think that this basic operational cost would have been carefully vetted to provide a hedge.

Obviously such provision was not included in the Transit budget for 2012.

But all is not lost. The March variance report states there is a $734,000 surplus in the city’s overall operating budget. That is aided by a $1 million dividend from the Guelph Municipal Holdings Corporation. This is yet another example of windfall budgeting.

Another department headed by Mark Amorosi, Executive Director of Corporate and Human Resources, racked up a $500,000 deficit in the first three months of 2012. Reason given is the cost of Municipal Board hearings and legal cases.

This is a key area that has been shrouded in secrecy. There are no details provided why this budget went over projections in this department. By year-end, the excess spending could be more than $2 million.

As viewers will recall, this is a chief criticism of the Farbridge Administration, that it either hides or obfuscates details of spending errors and lacks control of finances.

Now, let’s come back to July 2013.

The head of Guelph Transit was fired last week. As usual no reason was offered by the administration. We don’t know why, after three years and at least two major makeovers of operations, that Michael Anders was dismissed or what the costs were. Certainly there was plenty of public criticism over the routing changes.

One of the key paragraphs was in the 2012 March variance report stating there was a $734,000 surplus, thanks in part to a $1 million dividend from the Guelph Municipal Holdings Corporation (GMHC).

Now that the official audited statement of the city for 2012 has been published here are some recorded facts:

The city overspent its 2012 budget by $10,750,000. It was the largest excessive spending over revenues in four years. There has been an accumulative budget deficit every year since 2009 that now totals $24,771,000.

The cost of waste management in 2012 was $465.97 per household in the city. It is 48 per cent greater than the average waste management costs ($225) in Oxford County, the Region of Halton, Stratford, London and Barrie.

In 2012, the GMHC actually paid the city dividends totaling $2.950,000. That is 96.7 per cent higher than previous years. The net income for the corporation declined by 44.1 per cent to $1,057,000. This resulted in a payout ratio of 176 per cent as dividends exceeded earnings. This is an illogical and irresponsible misuse of public funds. The main asset of the GMHC is the city-owned Guelph Hydro. That’s the $139 million asset the Mayor attempted to sell off a few years ago but was defeated. So now they just bleed it to death.

The costs of legal issues, of which there are 16 court matters to be resolved, including the several weeks trial over the building of the new city hall, have not be made public.

There lays the real problem facing this administration. They cover-up, manufacture excuses and fail to level with the taxpayers. They will cite their refusal to share information with the public because of personal privacy issues or breaching lawyer/client confidentiality. It’s always an excuse not to communicate the details of important issues in which the public has a right to know.

Now another $100,000 has been awarded to a Toronto “digital strategy” firm to develop the city’s “open government action plan”.

You may recall Mayor Farbridge’s 2006 election rallying call for an open and transparent civic government.

Instead, the Mayor and her majority of elected cohorts, locked the doors and closed the windows so no one had access to how the city was being managed.

So now the taxpayers have to pay $100,000 to have an outside consultant attempt to do what the Mayor promised seven years ago?

Only in Guelph you say?

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Guelph, the city that dances in the dark

Posted July 27, 2013

A recent report by the Canadian Federation of Taxpayers (CFT) gave Guelph a D rating of its management of staff costs.

The main thrust was to compare the numbers of staff earning more than $100,000 in 20 major Ontario cities including Guelph. It measured the rate of growth in the number of those earning more than $100,000 range and their increases in salaries. The study was done over a two-year period. Data came from the mandatory report every Ontario municipality must submit called the Sunshine list.

The report stated that in two years the number of City of Guelph employees earning more than $100,000 grew by 70.2 per cent. Further, the growth of salaries in the $100,000 club grew by 69 per cent.

There were 173 civic employees earning more than $100,000 according to the 2012 provincial Sunshine list. The average salary in the group was $118,444. The Sunshine list does not include the total compensation received including health coverage, insurance, pension benefits, parking, vacation, sick leave, and bonuses.

So who does the city administration trot out to dispute the results of the CFT grading but a senior city employee earning $166,000 a year? It was none other than Mark Amorosi, executive director of Corporate and Human Resources. Good choice, he doesn’t live in the community and doesn’t pay property taxes here.

And where was the Chief Administration Officer when this was going on? Or the Mayor? One would think that the most senior staffer and head of the municipality would have something to say about such a damning report.

At first the $166,000 man said that because of some “inevitable inconsistencies” in the CTF data, “It’s hard for us to offer comment on it.” Then he goes ahead and dumps on the report stating there are more reliable metrics to determine how Guelph is faring financially.

Guess he wasn’t including how, in the past four years, the city overspent its annual budgets by $24,771,000.

Or the clumsy misstep of telling Council the renovation of the downtown Farmer’s Market would cost $170,000 and within two months, announced the cost would be $500,000.

Or in passing the 2013 budget with a 2.96 per cent property tax increase to later admit it was adjusted to 3.74 per cent.

Or six months later informing council that the staff could not find $500,000 in efficiencies (savings) to maintain the 2.96 per cent tax increase promised in the 2013 budget.

Our staff costs are out of control and if other cities can reduce the high costs of staff operations, so should Guelph, the city that has one of the worst records of controlling staff costs in the province.

You can run Mark, but you can’t hide.

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CITY VIEW – The Great Guelph Rip-off

Posted July 25, 2013

This city administration under the leadership of Mayor Karen Farbridge, has embarked on an ambitious program to manage waste more effectively and send less material to the landfill.

In almost seven years, the city has spent more than $53 million on capital projects alone not counting staff and contractual costs during that period.

Here’s the kicker. In 2012, according to the city’s own financial statements, some $465.97 per household was spent to manage its waste. In 2011, Guelph’s waste management expenditure was $386.97. The $33 million organics plant was activated in 2012 along with the partial introduction of the carts. It created a huge increase in operational expenditures. In one year, Guelph’s waste management spending went up 20.4 per cent.

Previous analysis showed that in 2011, Guelph’s waste management expenditures was 71.1 per cent higher than the average of five municipalities. These included Oxford County, the Region of Halton, Barrie, Stratford and London. The average per capita costs of waste management in those municipalities, was $225.60. The waste management costs in those five cities ranged from a high of $316 to a low of $159.

Has Guelph’s waste management team gone off the reservation? Already the cart roll out is hitting thousands of snags and protest. Some who are able to store the three carts on their property have expressed satisfaction with the $15 million program. But it has brought up a long-term problem for the city, known as a leader in waste diversion from the landfill, that been has ignored for years.

There are 6,400 condominium residences in the city that are not serviced by the waste management department. The city, for a variety of reasons, refuses to pick-up garbage from these residences. They must hire private contractors to haul the unsorted waste to the transfer station. Most of that goes directly to the landfill.

Owners of these condominiums must pay for waste collection through their property taxes regardless of whether they receive the service or not.

Let’s do the math. There are 6,400 condo households in the city. Last year they paid through their taxes the equivalent of $465.97 per household for waste removal and processing.

That comes to $2,982,208 paid to the city for a basic service the owners did not receive. This results in the condo owners subsidizing the cost of waste management for those residents who do receive the service.

Does this sound fair and equitable or a failure to administer a city-wide system of waste collection?

Representatives of the condo owners appeared at a city council committee to state their case for a rebate because the city would not collect their garbage. Coun. Karl Wettstein said that residents cannot “cherry-pick” city services provided to all residents. He said taxpayers have to pay a portion of the costs of Guelph Transit even though they don’t use it.

That specious argument was once used by another city councillor, Ian Findlay. Both these elected officials don’t seem to realize that waste management is a vital service that impacts on the health and life style of the whole community. That’s why the condo owners must pay for private pick-up of their garbage. You can’t leave the stuff lying around.

What don’t they understand about that? Are they suggesting that an optional service such as public iransit is the same as processing waste? Besides, no one is asking for their money back because they don’t use Guelph Transit.

The condo owners are requesting a rebate on their municipal taxes to help offset the costs of using private contractors. The City of Waterloo recently awarding such a rebate to its condo owners in which the city could not collect waste.

Not all condominiums are created equal. There are hi-rise buildings with more than 100 suites and land condos of freestanding residences and linked housing. Imagine a new downtown condo hi-rise with 122 suites storing 366 carts on a postage stamp-sized lot for waste removal.

Letter writer Tony Leighton suggested a hybrid waste collection system that allowed those residences without pick-up services to use the former three plastic bag system. It is an interesting suggestion but ultimately expensive option.

The real problem lies with the city administration’s waste management staff that planned this cart system without considering that a large and growing portion of the community could not be serviced with the carts.Waterloo has waste management expenditures of $301.12 per household Compare that to Guelph’s per household expenditure of $465.97. Is that not an out-of-control runaway of waste management spending?

When the finger-pointing starts watch for a number of councillors to duck for cover. There is no other way to describe this debacle than to call it the Great Guelph rip-off of some 6,400 taxpaying households.

This entire waste management exercise has saddled all taxpayers with millions of dollars of debt and fails to serve the whole community.

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What are the circumstances surrounding the fatal accident of a public employee?

Posted July 23, 2013

The tragic death of Constable Jennifer Kovach last March still reverberates with many citizens.

This week, a request filed by the Guelph Mercury, under the Freedom of Information Act (FOI) for an accident report from Guelph Transit, was denied by the city. The report, it is assumed, contains details from the driver of the bus who is a witness. The bus was hit head-on by the police car driven by Constable Kovach.

City Clerk, Blair Labelle, cited parts of the FOI and the Protection of Privacy Act in which requested information may be denied. The Clerk cited three passages from the two Acts in his refusal to release the requested accident reports.

One -The city may refuse to disclose a record on the grounds it could interfere with ongoing investigations.

Two – He said the Act allows material to be withheld where “it could be considered an unjustified invasion of personal privacy”.

Three – If a solicitor/client relationship existed and provided privileged information.

The first of these is valid. Releasing part of the details from one perspective can influence the entire investigation. Chief Brian Larkin has stated that the police investigation will be released by the end of this month. So, what possible excuse could the city have to deny the Transit report following that release?

The second reason sits on rocky ground. Who decided that releasing this Transit report could be considered an unjustified invasion of personal privacy?

The third reason is laughable. There is no evidence that a lawyer/client relationship exists.

This is the old story of the best defense is an offense. The lawyers in the Carden Street Kremlin must have worked overtime crafting this explanation of the city clerk’s refusal to reveal the reports.

It’s not an attempt to cover-up, it’s an attempt to preempt any unseen litigation that may be launched against the city.

The investigations of this tragedy must be revealed to the public. It is their right to know.

That’s something that is regularly ignored by this city administration.

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Where was the beef in the waste management newspaper series?

Posted July 21,2013

Recently the local daily ran a six part series on waste management, an oxymoron to most Guelph residents. The stories about how efficient our waste management team is handling our garbage left out important facts … ergo the beef.

Such as: What are the total operating costs of the $33 million Organics Waste Processing Facility, including debt cost and depreciation? What are the total operating costs of the recycling plant? What are the pricing projections including expenses and revenue for the next 20 years? What are details of the contract with Maple Reinders’ subsidiaries, Aim Environmental and Wellington Organix, to turn wet waste into compost? How much is the city receiving for the sale of finished compost?

None of these questions were raised in the series, thus no answers.

There have been vague management statements that some of this information is proprietary. While the private operating companies running the plant may want to protect business secrets and methods, they do not own the plant, the people do. For waste management and council to enter such an arrangement, is an affront to the taxpayers who are entitled to know the real costs.

Most taxpayers don’t know Milton Burns. He is like the rest of us who are frustrated trying to understand why taxes keep going up and spending is out of control. Except he has a financial background to dig into the numbers.

But Milton has a gift. He studies the official City of Guelph financial statements, including budgets, to decipher what is really going on in the management of finances. He’s been doing this now for about six years since he first detected errors and problems in the official reports.

Ever the flinty-eyed observer, Milton had a letter published in the local daily, following its waste management love-in series.

His analysis of waste costs was not complicated. In it, he compared the amount that Guelph citizens pay per capita compared to the costs in Oxford County, the Region of Halton, Barrie, Stratford and London.

Guelph’s per capita 2011 waste costs were $386.97. The other cities’ per capita waste costs averaged $225.60. The reported waste expenses ranged from a high of $316 to a low of $159.

As Milton points out, Guelph’s waste costs are 71.1 per cent higher than the average of the example cities.

And this analysis was based on official audited statements in 2011 and did not include Guelph’s addition of the $33 million organics plant or the $15 million cart collection system.

It is easy for the city to claim it is number one in waste diversion to the landfill until you factor in that some 6,400 condominium residences in the city do not have city waste pick-up service. These homeowners must hire private contractors to haul the unsorted waste to the transfer station and then on to the landfill. On top of that, they must pay for waste collection through their taxes.

Our Mayor says that waste management issues will not be a factor in the October 2014 civic elections.

What do you think?

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There is trouble, trouble right here in River City

Posted July 17, 2013

You may recall last December when the 2013 budget was approved, that Coun. Gloria Kovach introduced a motion to lower the property tax rate to 2.97 per cent. Council agreed and the staff was instructed to “find” $500,000 in efficiencies to meet the lower tax rate target.

Keep in mind that in the last four years the city’s annual budgets have been exceeded every year. A combined total of $24,771,000 was spent over total budgets’ figures each year. Does that maintain efficiencies? Does that infuse confidence that our city is being well managed?

Does anyone on council understand its own financial statements?

The administration recently admitted that the revised 2013 property tax rate was 3.74 per cent due to adjustments. Again, staff worked on the 2013 budget for almost eight months.

The debacle over the renovation of the Farmers Market ended up costing an unbudgeted $500,000 less a previous council approval of $170,000. How can a staff that has overspent the city budgets for four years running, have the gall to make such a proposal?

Because it can.

And taxpayers expect staff to shave $500,000 from the 2013 budget with a record like that?

The news is that staff, so far, has only come up with efficiency savings of $126,300. Of that there were two new revenue streams included in the report to reach that target. Those are not effiencies by any standard requested by council. This report in its entirety is shameful and an insult to the taxpayers. In more than six months staff can only come up with “savings” of $126,300?

The responsibility for this failure lies directly with the executive committee of staff. It indicates a lack of respect for council and taxpayers.

Bottom Line? How can you trust a staff that fails to find $500,000 in savings in a budget of some $194,000,000? Here’s a clue: The biggest expense in the city budget is staff total compensation. Out of some 1,441 full time employees in 2012, surely six or seven could be released to achieve council’s $500,000 efficiency mandate.

In its report, the finance department stated that “it is evident there is a culture of continuous improvement being fostered and supported by the City of Guelph.”

Please define the City of Guelph referred to in this statement. Is it the staff? Is it the council? Is it the residents?

Of course, it’s the staff, directed by the mayor and her council that is responsible for setting the city agenda and have the fiduciary responsibility. The staff appears now to fall back on the old Sgt. Schultz theory: “ I see nothing, I know nothing.”

There is a culture of entitlement among many members of city staff. As each department negotiates new contracts, it escalates wages, benefits and premium pay.
The taxpayer is whipsawed to meet new costs after each contract.

Stop and think how much the average total compensation package is for 1,441 Guelph civic staff? It was $113,394 in 2012. Of that 77 per cent was for base salaries or $87,313. Of course not every employee is making that. There is a hierarchy scale based on experience and responsibility. But as far as the taxpayers are concerned, the city staff is taking 88 per cent of revenues out of the pot annually. And there are no signs that escalating employee cost of is stopping, let alone even pausing..

And Guelph civic staff costs are already more than 20 per cent higher than Kitchener, Waterloo, and Cambridge. And the total compensation and numbers of staff is growing exponentially.

Is it any wonder that this city has lost some very good employees in key positions? Was it because they were either fired for balking the system or were uncomfortable the way the city was being managed?

Putting it together, we have runaway staff costs, incompetence at senior staff and at the council levels, money wasted on social engineering “strategies”, dysfunctional operations and little clarity or transparency of operations.

Thanks to former Ontario Premier Dalton McGuinty, the four-year term of office for elected municipal officials prevents any change until October 2014.

You know there is trouble in river city when some 6,400 condominium owners complain that the city refuses to pick-up their garbage. The city will not reimburse them to cover the extra cost of private collection of unsorted waste.

What happened to the city’s bragging record of diverting waste from the landfill?

Unfortunately, this cake has already been baked.

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