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?