That giant ripping sound is your tax dollars being seized by an administration that can’t count

Posted February 20, 2014

February 19, 2014 will go down in our city’s history as an election epiphany. It reveals vital information for every taxpayer to carefully consider as to whom they should support in the October 27 election.

In this special report prepared by GrassRoots Guelph’s (GRG) financial analysts, Guelph’s property taxpayers have been overtaxed by $86,841,000 in a three year period, 2010 to 2012. The details of this analysis can be found in the attached GRG members’ Alert.

The same information has been forwarded to the Ministry of Municipal Affairs and Housing (MMAH) as an addendum to the original petition presented by GRG to the Minister last October.

This is yet another example of the good work by GrassRoots Guelph, an independent citizens organization. It is one that analyzes and interprets how your city has been mismanaged in the past seven years of the Farbridge administration.

GRG has become the real opposition to the administration as the mainstream media blithely ignores digging for the facts. Reason? They don’t have the resources to investigate and analyze. Further, they will not spend the money to hire those resources. The result is that reporters become dependent on information provided by the city administration. There is little critical examination or commentary thereby readers lose this last bastion of political checks and balances so necessary in a democratic society.

The answer for citizens is to follow GRG on its website, grassrootsguelph.com and the blog, guelphspeaks.ca. Both these sites are dedicated to the truth and to inform all citizens regardless of their political beliefs.

This new report is based on official financial statements filed by the city administration in its obligatory annual Financial Information Report (FIR) to the province. It demonstrates the fiscal fallout of chaotic management of budget forecasting by senior city staff. It seriously reflects on the majority of elected members of council who failed to carry out their fiduciary responsibilities to the citizens, and turned a blind eye.

But you be the judge.

GRG Alert #12 to its members

As you know, GrassRoots Guelph submitted a petition to the Ministry of Municipal Affairs and Housing on October 1, 2013 requesting that the Ontario government conduct an in-depth audit of the City of Guelph’s finances and operations.

Subsequently three GRG representatives met with two MMAH representatives in Guelph on November 25, 2013 as they began their investigation into our request.  During this meeting, the MMAH representatives “confirmed the accuracy” of the numbers in our petition and we presented them with an additional six more items to add to it.
We have not heard back from MMAH since our meeting in November, even though we submitted more petition signatures to them in December.

Therefore, today, we submitted another two issues to the Ministry to supplement the original petition. This is part of our continued efforts to press the Ontario government to audit Guelph’s finances and operations and explain the many discrepancies and examples of mismanagement we have uncovered in the City’s financial statements.

The two new items are provided in full below.

These items are so critical that we sent them out in a press release this morning to all of the print, broadcast and Internet media outlets that cover Guelph. This is our second press release in two weeks. Last week, we issued a press release providing our analysis that the average 2014 property tax increase in Guelph will be 4.36%, not 2.37%.  Unfortunately, when we issue a press release, there is no guarantee that the media will use the material we give them.  However, we’re trying to get key information out to the general public using these outlets…and we’ll keep trying.

After all, Guelph’s residents deserve to be well-informed on these matters before they head to the polls in October!
 
Please share the following new petition items with your friends and family. If they want to join GRG so that they can get more information about what is happening at City Hall, please have them go to our website and complete our contact form (http://www.grassrootsguelph.com/contact/).

Petition Addendum – February 19, 2014

Section 1: Finances –
addendum to petition paragraph H)

In 2010-2012, according to available figures, the City of Guelph underestimated revenues by $105,955,000.  Since it also exceeded budgeted expenditures by $19,114,000 during this time period, Guelph taxpayers were over-taxed by $86,841,000 for 2010-2012.

This $86.8 million in unnecessary taxes was not a case of wildly gyrating numbers making it difficult to forecast revenues accurately.  In fact, audited revenues were surprisingly stable, totaling $379,887,000 in 2012; $379,882,000 in 2011; and $368,338,000 in 2010.

Rather it is, in our opinion, the result of a severely flawed budget process.  In the budget process, the difference between expected revenues and budgeted expenditures is the basis for determining the annual amount of taxes that residents must pay.

The revenue surplus of $105,955,000 over 2010-2012 reveals that the City of Guelph’s administrators do not have the means to forecast inflows with reasonable accuracy, and therefore consistently calculate tax levies that completely fail to reflect the reality of the differences between revenues and expenditures.

Addendum to Petition
- paragraph I)

In 2010-2012, the Finance Department reported questionable numbers regarding waste management assets in Schedule 51 of the Financial Information Report.

In 2010, in the Waste Management Division section of the report, the value of gross plant (i.e. the total accumulated assets of this operation) was $40,973,921 and annual depreciation was $3,857,031. In 2011, gross plant value rose to $69,308,440 while depreciation actually declined to $3,182,558.  In 2012, gross plant rose again to $76,407,350 and depreciation was $4,146,577.

Thus, over this 3-year period, the city stated that gross plant value rose by 86% while depreciation rose by only 7%.  In our opinion, this is another example of accounting inconsistencies that if done intentionally, would be considered “cooking the books”.

Written by Paulette Padanyi, GRG Commuications

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Here are some questions that you should be asking every member of council and those running for office next October.

Posted February 16, 2014

It has been almost eight years that the administration, under the leadership of Mayor Karen Farbridge, has imposed major changes and subsequent far-reaching financial obligations on the citizens.

Like all partnerships involving the public trust, there is a day of reckoning coming. Already there is evidence of missteps with the most major being the administration’s inability to accurately forecast revenues and expenditures.

This has been born out by the presentation of GrassRootsGuelph.com, a group of citizens who presented a petition to the Ministry of Municipal Affairs and Housing (MMAH), requesting an audit of the city of Guelph’s finances and operations.

During the most recent three-year period, the city council approved spending more than $24 million in excess of its own budgets. This fact was outlined in the citizens’ petition that is still under investigation by the Ministry.

In 2012, the city stated in its obligatory Financial Information Report (FIR) sent to the MMAH that the gross plant value of the Dunlop Drive waste management facility was  $76,407,350. The 2010 FIR stated a gross plant value of $40,973,921. That’s an increase of 53.62 per cent in just three years. The increase of depreciation declared in the same period was only 7.1 per cent.

Question: How do you explain the huge increase in valuation of the facility but the small increase in depreciation?

Question: What is the real cost of operating this facility that is carrying this ever increasing valuation?

Question: In view of the fact that the Organic Waste Processing Facility (OWPF) is dependent on outside supply of feedstock, when, if ever, will this waste management system become self-supporting?

Question: Why did council spend $33 million on a compost plant that is three times the needs of the city?

Question: What is the annual operating cost, including debt servicing, plus capital spending at the end of 2013?

Question:  When will the city start collecting waste from all residences and businesses so it can rightfully claim it is tops in Ontario for diverting waste from the landfill?

Question: As a councillor, did you vote for the various resolutions that created this waste management system?

*            *            *            *

In 2007, the Farbridge-dominated council approved moving the Civic Museum from Dublin Street to the former derelict Loretto Convent on Catholic Hill. The project is still under construction and the latest cost is some $16 million. The museum is open for four hours a day and there is no transparent accounting of the operating costs.

Question: What are the terms of the agreement between the city and the Diocese of Hamilton, owners of the convent building?

Question: What are the year-to-date costs of renovating the building?

Question: What are the details of the original operating plan including visiting hours, estimated adult visitations, effect on tourism, restoration and safe keeping of artifacts, number of staff, and operating budget?

*            *            *            *

More than two years ago, the lower portion of Wyndham Street was closed for reconstruction. Part of that was a renovation of the CNR railway bridge that passed over the street. When the street reopened last fall, it was discovered that large commercial vehicles could not use the street because the vehicle collided with the under part of the renovated rail overpass. And there were several collisions.

Question:  Why was this major street, being rebuilt by the city, and fail to properly measure the clearance to allow all traffic to pass under the overpass safely?

Question: What is the city going to do about it?

*            *            *            *

In 2013, the city staff recommended spending $170,000 to renovate the farmer’s market building, the former horse barn used years ago. After receiving council approval, the staff reported that the renovation was to cost $500,000.

Question: Did council approve this increase of $330,000?

Question: Was the job tendered and what was the result of the process?

Question: Was there favouritism in the selection of the contractor who eventually did the work?

Question: Which staff member approved this project that was originally presented to council?

*            *            *            *

Following up, the same department of city staff recently reported to council that the “living wall” of plants in city hall needed $10,000 in repairs and estimated future monthly maintenance costs of $1,000. The plant wall is part of the greening of city hall that has a green roof as well.  Due to a number of problems including drainage, the roof project had to be renovated at a cost of $250,000.

Question:  While improving the environment is commendable, at what point does it no longer be cost effective or beneficial?

Question: Is it cost effective to pay $1,000 a month to maintain this environmental feature?

*            *            *            *

By a vote of 12 to 0, council approved spending $11.7 million by deferring taxes on two downtown condominium projects. Now the argument can be made that the resolution did not exactly spend the money. It just meant that the taxpayers, who receive no tax holidays, would not have the benefit just given to two developers. Both these developers said that if they did not receive the ten-year deferment of property taxes they were not prepared to build the projects. This recent vote was part of a two year-old resolution that set aside $33 million to encourage condominium development downtown. All the money has been allocated.

Question: What was council thinking? Did it fail to see the fiscal problems this could bring to taxpayers over the next ten years?

Question:  Did council ignore the political fall out of this decision?

Question: Is this council so susceptible to threats that do not serve the public interest or trust?

These are just some of the vital questions that this council and administration need to answer.  As the election campaign unfolds, there will be more questions that voters will be asking.

If you are concerned about the way our city is being managed, then join the only citizen’s organization that is questioning the administration. Join today at GrassRootsGruelph.com. GRG, it’s by the people for the people.

The way the Mayor calculates costs of the Hanlon Business Park, two plus two makes eight

Posted February 13, 2014

When Coun. Bob Bell stated recently that the Hanlon Business Park has cost taxpayers $40 million; Mayor Farbridge rushed in with figures denying Bell’s assertion.

In her denial, the mayor said the city was not “losing money on the project.” She cited the city is on track for meeting its adjusted cash-flow projections.

Madame Mayor in English please!

Then she went on to say the city’s financial exposure is “about $20 million” spent so far on purchasing and servicing the land in the 675-acre project. Of that acreage, 380 acres can be used for a business park.

She failed to mention that the city spent $14 million as its share to complete the Hanlon/Laird interchange that opened last year and was part of the development of the park.

Okay, following the money in Farbridgeland can be a daunting task. Coun. Bell has an advantage because his sits on council and as a businessman, he can follow the money where no ordinary Guelph resident fears to tread.

The mayor said the phase one will reach the break-even by 2017. So far of the 123-acre phase one site, only 41 acres have been sold. The mayor says $11.7 million is going to the city as its share of the private/public partnership with Belmont Equity Partners.

The role of this newly revealed partnership is unclear.  The bottom line is the citizens of Guelph financed this enterprise. Did Belmont Equity Partners put up the money in return for a piece of the pie? Who is Belmont Equity Partners?

Now we learn that “almost all of” phase two land has been sold to an unnamed private firm.

The Mayor, we hope is not financially illiterate. But using words such as “almost” and “about” and expressions such as “adjusted cash-flow projections” does not inspire confidence in her explanation. Her explanation that the city’s investment in the Hanlon Business Park is on track and viable, remains on shaky ground.

If anything, in one interview the Mayor has muddied the waters even more. Then to go on and state that phase one will create 3,700 jobs is pure unadulterated drivel.

In one breath she says that phase one has “almost” sold out and that will create thousands of jobs. She goes on to say phase two will create 2,600 jobs and 1,700 jobs in phase three. How does she estimate that? Is she clairvoyant?

Back to the phase one prediction. When will those 3,700 jobs come on stream? And where will the workers and their families live? Will it be in the hi-rise condominiums downtown that the city citizens are helping to build?

If that many jobs are created in phase one, it will mean a population increase of about 12,950.  The Farbridge administration has failed dismally to approve sufficient affordable mixed-use housing in its seven years in office. Its new housing starts fall below the standard set by the provincial Places to Grow policies in the past three years.

Readers will recall the rallying cry of the Farbridge gang in 2006 when they decried “urban sprawl”. They succeeded as only 152 new single-family detached homes were built in Guelph in 2012.

More evidence that we are now in re-election mode when the mayor makes such vague statements that are devoid of details.

Before forgetting, remember the delay in constructing the Hanlon Business Park caused by a group of environmental terrorists? They chased the contractor off the site, damaged his equipment and even threatened him at his home.

And it was all in the name of protecting the habitat of the Jefferson salamander. It was a contrived myth that ended up costing Guelph more than $1 million. In the end, there was no evidence of the existence of Jefferson salamanders.

And what did the Farbridge administration do?  They greeted the occupiers at city hall, ordered the police not to arrest them for trespassing on public lands. Then the city sued for $5 million. The defendants, collectively, did not have the cash for a bus fare to downtown.

Do you think the mayor is believable now?

 

 

 

Council votes to give $33 million tax break to downtown developers

Posted February 11, 2014

Who knew that two years ago, council approved spending $33 million in “incremental grant funding” to six residential and commercial developments in the downtown area? Spending $33 million is not chopped liver.

The special funding was to encourage developers to take on heritage redevelopment projects, brownfield remediation and downtown intensification projects.

It is now apparent that the deals subsequently struck were so rich that heritage redevelopment and brownfield remediation were locked out. Ah, the best intentions sometime go awry.

All the remaining funding, $16 million, has now been allocated to intensify downtown residential development by Tricar Developments on a project on Wellington St. East and a Fusion Homes redevelopment of the W.C Woods project.

The tax deferments are for ten years. This results in millions of dollars in property taxes being denied taxpayers for that period.

It is yet another example of voodoo financial management. It’s an easy guess that not one of the present council will be on council in ten years, let alone next year.

Here are some questions.

Who pays the deferred taxes after expiration of the deferment?

Is it possible that this funding is grants from city reserves, if so which ones are they? How will they be replenished?

What is the taxing effect of assessment increases on these properties over ten years?

Will these developers receiving these tax deferments still be in business in ten years?

If not, how does the city benefit?

What assurances does the taxpayer have that this is not a too-generous handout to meet the agenda of the present council?

What other deferment deals, such as deferment of development fees, have been offered by the city to encourage downtown intensification?

Did council consider the impact of its cart-based waste collection system in regard to these projects?

Now that the so-called $33 million “incremental grant funding” has been exhausted, what happens to the proposed $34 million police headquarters renovation; the downtown library, the costs of which have recently varied widely, and the South End recreation centre that is not even on the ten-year capital spending program?

No, instead council decided to become a bank and spend $33 million to help developers to build condos downtown by deferring taxes for ten years.

Trouble is it’s your bank and your money.

 

 

How an out-of-control city administration is picking you pocket

Posted February 7, 2014

The city has announced it is seeking a chief executive officer to run the shadow holding company know as Guelph Municipal Holding Inc (GMHI) with its chief asset being Guelph Hydro and its subsidiary, Envida Community Energy Inc.

The administration has hired Odgers Berndtson, a headhunting firm with global contacts to find the candidate. The successful candidate will replace the current CEO Guelph chief administration officer, Ann Pappert. The board of directors is entirely composed of the mayor as chairman, her council supporters and two independents known for their loyalty to the mayor.

The question is why does Guelph need another layer of expensive talent to run a holding company with one asset? Guelph Hydro has a management structure that has functioned well for many years. Will someone explain to the citizens why more management is needed?

The holding company, it has been revealed, will manage the latest Farbridge vision of supplying underground thermal heating and cooling to the downtown area.

Even more interesting is the how GMHI is paid a dividend from Guelph Hydro. In 2012, the dividend was $2,900,000 forwarded to the city and swallowed up in general revenues.

It was paid despite a decline in Guelph Hydro’s revenues in 2012.

The bottom line is that it is another sneaky way for citizens to be taxed, every time they turn on the lights, heat the house, heat the water, refrigerate the food and watch television. The same thing is happening when providing water and water treatment services. The alarming trend of increasing water costs to consumers reached 77 per cent from 2007 to 2012. The electricity and water revenues play an important role in propping up the shaky Farbridge vision of turning the city into some kind of environmental wonderland.

This takes money. Lots of it and that’s why there is the constant scramble to find ways to excessively tax people, overcharge user fees and now use two vital services, power and water to pay for it.

Trouble is, the Ontario Municipal Act frowns on municipalities taxing those two vital services, directly or indirectly. The subterfuge of using the municipal holding company to launder the Hydro “dividend” so it does not appear as another tax is egregious and probably unlawful.

So here we have an announcement that hydro rates are going to increase by 42 per cent in the next fours year. The same thing will happen for water rates and property taxes and will continue their upward spiral by as much as 18 per cent during the next four–year term of council.

These are facts with which the electorate will have to face October 27.

Another four years of a Farbridge administration will bury this city financially.

Here’s why: People will not want to live here because of the high property tax rates. In fact, some people may not be able to afford to live here. Industrial and commercial development will not grow because of high taxes, operating fees and a complicated system of obtaining approvals from a dysfunctional city administration.

Throw in the plight of the University of Guelph, a major economic contributor to the city.  The institution’s budget is showing a current deficit of $34 million. This has prompted staff layoffs and cut backs in programs.

On top of that, the university staff pension plan is currently underfunded by $741,300,000 and that is not shown on financial statements. On an ongoing accounting basis the deficit was $484,3000,000 in 2011.  That’s a 65.3 per cent increase in just two years.

The provincially mandated sunshine list revealing those public employees earning more than $100,000, show the University of Guelph had 175 employees on the list in 2002. In 2012, there were 788 employees on the list, a 350 per cent increase.

The same thing is occurring in the city administration where salaries and wages, plus soaring pension costs have created a financial crisis that will have long-range consequences, regardless of who takes over next October. A lot of the damage has been done.

Fixing it will take heroic action on the part of the next elected council. There is a sense of entitlement among many public employees that they deserve endless higher salaries and benefits. And it’s an epidemic that covers public servants across the province.

The Farbridge administration has already demonstrated how to milk the electorate in a variety of ways to fulfill their agenda.

This lame duck bunch, in the final year of its mandate, has abused the public trust and it’s time for them to go.

 

 

The sad case of the failing fortunes of the Guelph Mercury

Posted February 5, 2014

It is a newspaper that has been around for a long time. Over the years, it has recorded the history of this city covering those events that affect the lives of its citizens.

But that was then and this is the harsh reality of today.

Running a daily newspaper has never been harder. Advertising revenues have tumbled as other media have consumed ever-growing portions of the advertising pool.

The Mercury’s decline started about six years ago when some six editorial staff were laid off.

Then the newspaper’s point of view swung from being in the centre of the political spectrum to the left, particularly following the 2006 civic election.  To many loyal readers, the change became more noticeable as Mayor Karen Farbridge took full control of city council. The result was a leftist agenda that witnessed increased debt and spending on major capital projects.

The changing coverage didn’t happen overnight. The paper’s credibility was challenged as reporting of city administration actions and policies were one-sided with little critical ballast to give balanced coverage.

It also witnessed a declining base of local adverting lineage. Most of that went to a sister publication, the twice-weekly Guelph Tribune.

Shoring up the two newspapers revenues were the advertising inserts that come in a great wad on Thursdays and Fridays.  Unfortunately, that business does not pay the bills.

This week, the Mercury announced it was laying off 36 employees and moving the production and printing operations to Hamilton.

What remains is a corporal’s guard of editorial and advertising staff to produce the paper six days a week.

It is only a matter of time before the Mercury building on Macdonnell Street will be put on the market. The next step will be opening a modest store-front that will house the remaining staff.

The present property is valuable and could turn out to be the greatest asset of the Mercury, or should we say MetroLand Publishing, the owners of the newspaper.

The sad part is that Guelph will eventually lose its daily newspaper.  The blame however must be laid on a management, chiefly located in Kitchener that failed to conduct a fair and equitable editorial policy and allowed its local ad base to shrink.

Guelph deserved better.

BIN AUDIT – A citizen’s review of the automated bin collection system

Posted February 3, 2014

Having been subjected to the three-bin waste system for more than two months, here is a review of the system.

BIN SLOWER – The cycle time from garbage truck wheels stopped to wheels rolling, as the 2 bins (1 green & 1 blue or grey) are hoisted, contents dumped into the truck, and empty bins placed back on the ground, is twice that of the former manual method.

Not the great efficiency gain touted by the waste mismanagement brain trust.  Considering the amount that was picked up weekly in blue bags is now picked up every 2^nd week via the blue bins, the garbage trucks will fill up twice as fast and have to make a run to dump the contents twice as often. Maybe that explains why in various areas of the city I have seen two bin handling trucks on blue box days on the same street.

BIN AWFUL – Again, it is less efficient than the bag system.         .

During the snowy weather the lids of all bins are left open after being placed back on the ground. The consequence is that snow accumulates in the bins.   When room temperature material, be it compostables, recyclables, or garbage, is placed in the bins, the snow melts and then freezes bin contents to the bottom of the bin.

BIN HELP! – Whether this open lid condition is due to a poor bin handling mechanical system design and operation or operator shortcoming, it should be investigated and corrected.

To work around this snow problem, I sweep out the bins prior to putting them back in the garage.  Repeated city paid notices published in the Tribune, advises people not to cram stuff into the bins as it will not empty completely. This band-aid policy indicates a lack of measurement of the quantity of bagged waste that was previously being set out each week in the requisite bin sizes.

BIN COSTLY – The cost the citizens of Guelph will have to pay because the waste mismanagement honchos could not grasp operational flow and cycle time concepts will result in costing well beyond the $54 million capital costs.

BIN THERE – The operating inefficiencies are the legacy of the current numerically illiterate Guelph council and civic administration.

Glen N. Tolhurst