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