So do you think the Urbacon trial was a waste of time and money?

Posted March 31, 2014

GrassRoots Guelph (GRG) received a letter from the Minister of Municipal Affairs and Housing recently, stating she was not going to proceed with a request to conduct an audit of the City of Guelph’s finances and operations.

The four-page petition requesting this audit was backed-up with figures and facts gleaned from the city’s Financial Information Reports to the province mandated to file annually. Further, her representatives agreed the figures and facts were accurate.

The Minister gave no reasons why she made the decision.

But Chief Administration Officer (CAO), Ann Pappert, and her Mayor Karen Farbridge, stated they were vindicated and the taxpayers’ request was “ A waste of time.”

How’s that looking today, folks?

Now here’s the CAO’s response to the judge’s statement as posted on the city website:

“Today’s court decision is disappointing. The city decided on its course of action because construction delays were costing the city – and Guelph taxpayers –thousands of dollars. Based on the contractor’s performance, there were deep concerns about Urbacon’s ability and commitment to complete the second part of the project, the renovation of Guelph’s Provincial Offences Court.”

Seems the judge didn’t see it that way.

It appears a plausible excuse why the city has, in its judgment, gambled with your money. It is an attempt to win a complex and intricate case in which it was obviously vulnerable.

Was this a “waste of money?”

See second post analyzing the city hall construction case. Entitled “Guelph’s Titanic has already hit the iceberg.”

Advertisement

guelphspeaks.ca will not be a platform for promoting the Farbridge party line

March 30, 2014

Since presentation of the petition by GrassRoots Guelph requesting a Ministry of Municipal Affairs and Housing audit of Guelph’s municipal finances and operations, the daily traffic on the guelphspeaks blog has tripled and continues to grow.

The MMAH has confirmed that the figures in the petition present to the Minister are accurate.

This blog startup coincided with the inauguration of Mayor Karen Farbridge’s new council elected in the fall of 2010. The thrust of guelphspeaks turned to commenting on the actions of the Farbridge administration that were becoming more controversial and of concern by citizens.

Now there is a trend developing in which supporters of the Mayor are attacking my credibility. In seven years, I have never had one complaint about my commentary from the administration. There is nothing new here. The same forces employed similar tactics to defeat the Mayor and council in 2006

Now, we’re in election mode and negative commentary is spreading not only on guelphspeaks but also in other blogs and twitter. This blog will not accept contributions or comments that are untrue, inaccurate, personal attacks, anonymous, or promotes the views of the city administration, the mayor and her supporters.

This is my blog and my views are well established. I will not allow it to be used to promote statements and manufactured concepts and policies. Issues that I, and hundreds of others, believe are contrary to the best interests of citizens. Those views are already out in the open being considered throughout the city.

It has nothing to do with free speech. The guelphspeaks blog has a definite point of view and will welcome comments that support the retirement of the mayor and her cohorts next October. Along with GrassRoots Guelph, the growing number of members indicates that there is great support for change in the governance of our city.

There are ample outlets available to those who support the Farbridge administration and its re-election.  Buy an ad, hire a hall, use the council chambers or Civic Museum or tap into a friendly blog.

Sorry, [romoting the Farbridge party line isn’t welcome here.

Gerry Barker, editor

More case studies of municipalities becoming insolvent

Posted March 30, 2014 

Bill Tufts of the Fair Pensions for All wrote the following commentary. It has been edited for length. It reflects the growing number of municipalities across Canada concerned about the rising costs of public employees. The City of Guelph is no exception in which 80 percent of its property tax revenues are used to pay its staff of 2,063.

Bankruptcy  – a condition of financial failure caused by not having the money that you need to pay your debts”

These are a few random thoughts sent to a few of you whom I have spoken with over the past week about our state of affairs. It is not an official correspondence of Fair Pensions for All.

The writer continues to follow the country’s financial situation and see more and more indications that there is a Minsky Moment coming. Herb Duncan has been pointing out the signs and signals that are leading to this moment for the city of Saint John, New Brunswick.

A couple of cities have become bankrupt recently in Canada. It’s a progressive journey that may take several years for it to reach the end point, bankruptcy. Many years before the end is reached, the city or province will go through a process of insolvency, with different levels. Detroit for example, went through this period of insolvency for over two decades or more.

A recent report on the bankruptcy of Stockton, California highlighted the insolvency process. Stockton was the biggest municipal bankruptcy ever, before Detroit.

“While insolvency is commonly understood as a condition in which a city can no longer pay its obligations (and thus must file for bankruptcy protection), there are multiple tests for insolvency.

            1. Service Insolvency – when a city can no longer fund the consistent delivery of its current services.

            2. Future Payment Insolvency – when a city is projected to be unable to meet its future financial obligations at the rate of current spending, and must thus reduce its current service costs to stay within projected revenue.

            3. Cash Insolvency – when a city can no longer cover its current costs.” 

As the process of insolvency progresses it is evident that there are several trigger points that intensify the final stages towards the tipping point.

The final stages into “cash insolvency” are the rapid run up of employee costs that continue to consume more and more of the city’s resources. This of course leaves less for the other services that taxpayers think they are contributing taxes towards.

Before the employee cost meltdown, the city has usually financed a “white elephant” project. That may result in having an important function to provide for the city and be politically popular but have little economic value. Especially considering receiving potential tax revenue. In all probability it is a project the private sector would never build or support.

There are a couple of recent examples in Canada of municipalities that went bankrupt. They can’t really go bankrupt in the legal sense but they become wards of the province. However, technically they are bankrupt because at that point in time they just can’t pay their bills any longer. The reserves had been used; they can’t borrow more money and have no cash in the bank.

One of our directors explains it in the following explanation of how these governments go bankrupt, it happened very slowly then suddenly…

Amhertberg, Ontario

The town is a beautiful little community that has preserved some of its heritage atmosphere. It has attracted seniors because of its features including a mild climate located close to the great lakes.

The town had its white elephant project in the form of ambitious community projects including “the construction of the United Communities Credit Union Complex, the expansion of the water and waste water plants and the separation of the storm sewer system.” These projects left a large tax burden on the city.

Amherstberg, a small community with a population of 13,000, was saddled with big city costs for its municipal staff. The straw to break the elephant’s back is always the cost of police and fire. On the most recent Sunshine List, of those earning more than $100,000, the town has 20 employees on the list. Of these employees 15 are police and fire.  

The town suffered from Meredith Whitney’s vortex of hell syndrome. The vortex of hell starts with skyrocketing compensation and debt costs driving up taxes. Most of these taxes will be on corporations, a good target and they don’t vote. The corporations then decide to leave town, in this case it was liquor manufacturer Diageo, a maker of Crown Royal whiskey, who laid off 103 employees and Honeywell who laid off 75 employees. The remaining businesses in town are saddled with rising taxes to cover the cost of those who left, spinning the vortex faster.

The first move by the town to prevent bankruptcy was the elimination in 2013 of three of its biggest paid city employees. This did nothing and Amherstberg went into “provincial protection”, a process in the private sector that would be called bankruptcy.

At the time of cash insolvency the town had $41 million in debt and $14 million in unfunded retirement health care liabilities. The town has an annual debt payment of $4.1 million, raised $16 million through its property taxes and had a $26-million budget including water and sewer charges.

Springhill, Nova Scotia

This town recently went insolvent (bankrupt) and had to “dissolve itself.”

Founded in 1790, it was incorporated in 1889. It is part of the huge demographic challenges that face the Atlantic Provinces. They are seeing the working-age populations of their towns shrink at the same time aging populations, aged more than 65, are growing. The Ivany report on the province looked with some detail into the demographic tsunami. It found some towns saw heir-working age people shrink by 30% at the same time aging populations grew by 45%. 

In January of this year the town singed a new contract with its police force that saw a salary increase of 18.5 per cent over four years. By March they had created a resolution to dissolve the town on March 31, 2015, effectively becoming a ward of the province.

Keep an eye on 2014; there will be many more of these situations to come.

Is Guelph in danger of becoming insolvent? As this article points out, it builds slowly and occurs suddenly. Our city is now at a crossroads. The new council has a mandate to either continue increasing staff numbers, giving overly generous salary and wage settlements; allowing the pension liabilities to grown exponentially. Or scaling back public employee costs through attrition, staff reorganization and freezing pay until staff costs can be brought under control.

This is without doubt the least understood of all issues facing the electorate in October. It is difficult to look well down the path to understand that the actions of the present administration will affect employee costs in future years, many, many years.

Guelphspeaks, along with GrassRoots Guelph, will continue to alert citizens of this serious situation and inform citizens of the imminent dangers of failing to curtail the growth of employee costs.

A lesson for Guelph: How Port Colborne deals with keeping taxes low and gets the job done

Posted March 30, 2014

Our friend Brent Beam picked up the following report on the Port Colborne website that explains how that city manages its taxation of citizens.

It’s report that the Guelph administration and citizens should note. It proves that a municipality does not have to increase property taxes annually above the Consumer Price Index (CPI) to meet its agenda.

Call it serious and careful management of the citizen’s treasure and its ability to pay its taxes.

Published on the Port Colborne city website – February 13, 2014

Less than the price of one Big Mac is what it will cost the average Port Colborne homeowner more this year in blended property taxes.

The city’s chief administrative officer, Bob Heil, said Wednesday afternoon that for a typical home assessed at $170,380, it will be roughly a $4 tax increase for the year.

That’s a dollar less than the McDonald’s fare, fries not included.

Tuesday night city councillors unanimously approved a tax levy of just under $13.8 million, representing a 3.73% city tax hike.

But when assessment growth is factored in, plus a sizeable drop in education taxes (3.83%) and forecast reduction at the regional level that includes a base shift to the north, the net levy for Port Colborne comes in at just 0.14%.

Heil gave plenty of credit to the city’s 125 full-time equivalent workers who in recent years have been focused on saving taxpayers money.

“Every day staff are trying to find ways to do ‘it’ with less costs,” he said.

That’s as simple as saving small bucks on paperclips or thousands on vehicle replacements.

“This is the best team I’ve worked with,” Heil said.

City staff were working toward a directive from city councillors to keep costs in line with inflationary costs. But Heil noted that’s not always simple – the price of diesel for the city’s fleet of plows is one example of how things fluctuate over the course of a year.

“There are always challenges, you lose revenue, things change.”

Mayor Vance Badawey, too, championed his municipal employees for working toward a common goal.

He said the 2014 budget “reflects a very, vibrant, healthy, active community.”

And it’s one that starts to show the “payback” on major capital investments in recent years, such as for Vale Health and Wellness Centre and the Lock 8 skatepark.

He said the city is now in the position that it can shift its focus toward enhanced services and programs for residents.

And new this year, the city has set aside funds in the budget to ensure Port Colborne’s voice is “injected” into the province’s $26-million planning review for a new south Niagara hospital, and the related components of a promised urgent care centre.

Badawey said costs continue to be kept in check by also remaining committed to core responsibilities, such as reinvestment in roads, sidewalks and sewers, “versus trying to be everything to everybody.”

Way to go Port Colborne! It is a refreshing attitude that could well be adopted by our city administration. Wishful thinking won’t make it happen, only political will can do the job.

 Guelph citizens will have the opportunity this October 27 to vote for a council that will have the political will to make the necessary changes. It is the time to return power to the people and not the minority ideologues who have been running Guelph for almost eight years.

 

Green Alert! Birds of a feather flock together

Posted March 28, 2014

A recent panel discussion moderated by Green Party Ontario leader, Mike Schreiner, included Farbridge hardcore supporters Jan Hall and Andy Best. It also included Ralph Benmergui, former radio and television performer.

The most interesting participant was Benmergui, whose current job is communications director for the Green Party.

The topic discussed was the relevance of citizenship, particularly the role of taxpayers in our society.

“I find the word taxpayer deeply offensive,” Benmergui said. “Taxpayers want the services they want and they don’t want to pay for the services they don’t personally need. The notion of the common good has deteriorated. I’m worried there may be a crisis of citizenship.”

Benmergui is from Winnipeg and does not live in Guelph. If he did, he would realize that our city has been controlled by an administration that has increased taxes by more than 32 per cent in eight years. This has its genesis in projects and spending that has exceeded normal accounting rules. More to the point, voters did not give control of its assets without participating in the dialogue. This did not happen under the leadership of Mayor Karen Farbridge.

Ms. Hall said: “People feel disenfranchised with politics. And there are so few candidates who really embody the values of the people. So they feel lost.”

Ms. Hall lives in Guelph and must be aware of the flood of citizens complaining about the way their city is being run. It includes how tax revenues are willfully spent on projects that support the Farbridge environmentally-focused agenda.

This panelist has been an ardent supporter of Ms. Farbridge and her seven council cohorts who have tightly controlled the city for almost eight years. 

The people are disenfranchised all right by an administration that has functioned chiefly behind closed doors. The fact that it is now using taxpayer dollars to advertise its recent epiphany of having an “open” government is a sick joke that reflects the arrogance and abdication of fiduciary responsibility.

Which brings us to Andy Best who opined: “Politicians should throw out the playbook and just talk to people. I think its possible to do politics differently.”

Mr. Best is the former president of the Guelph Civic League who stepped aside to start up the Guelph Citizen blog. To have the effrontery to say politicians should just talk to people is laughable when one look at the public exposure that his Mayor practises.

The Mayor avoids the people like the plague. Works in an office suite that is locked. Never holds a media conference or town hall with people. If lured out of her office, she rarely speaks extemporaneously and only under strict control and usually questions are not allowed. Perhaps Mr. Best should direct his observation toward his own leader.

This panel discussion was a sham and politically aimed at dividing voters and speaking directly to the base Farbridge supporters.

The Farbridge forces are concerned that there is growing opposition to their plans to change Guelph in a way that the vast, silent majority do not want.

The fear among the centrist group of voters is that four more years of this administration will have long-term consequences that will set the city back. Possibly for decades.

Citizens should see through this silly comparison between those who do not pay taxes and the stakeholders. Most Guelphites are tolerant and willing to share and pay for services whether they use them or not. Examples include public transit, recreation centres, public safety teams, River Run theatre, Sleeman Centre, and public libraries, bicycle lanes, to name a few.

But what really gets their backs up is the escalating costs of water and Hydro. Both these vital services have morphed into another hidden tax used by the current administration. This will be discussed in detail later.

Help return our city to the people by joining grassrootsguelph.com. This growing organization, for restoring the power of the people to city hall, is the only one that opposes the Farbridge policies. It is non-partisan, non-profit and is made up purely by volunteers.

The Farbridge city vision, how’s that working for you?

Posted March 27, 2014

This week, the City of Guelph took out a half-page ad proclaiming it is now operating an open government.

All it took was paying a Toronto consultant $100,000 of your money. To tell them, wait for it, after more than seven years they had not been running the city in an open and transparent manner.

Again, this Farbridge administration is using your money to establish a personal political position in a crucial election year.

Add in the cost of staff to pull this ad together and the time spent with the consultant and the cost of a half-page ad in the Mercury and we citizens are being used to support an administration’s political agenda with our our money.

But let’s roll back to election night 2006 as the Farbridge crew were savoring the taste of victory and the Mayor elect was promising to run an open and transparent government.

She also promised during the campaign to “Put Guelph back on Track.”

Well, how’s that working for you?

* Must tell you, that train went off the rails seven years ago.

* Property taxes on average have increased exponentially by more than 32 per cent in eight years.

* User fees in most cases have more than doubled.

* Speaking of trains wrecks, Guelph Transit was revealed by the city’s own internal auditor as spending more than $1 million in overtime in 2013.

* Water bills have increased by more than 77 per cent, yet usage has dropped significantly.

* Same with Hydro bills.  That’s going to be a hot issue in the election campaign because the Mayor, through her Guelph Municipal Holding Corporation, controls Guelph Hydro.

* Get ready for Guelph Hydro, with a $130 million book value, to be sold into a larger distribution network. The Mayor is already on record saying it will happen.

* Millions have been spent on a waste management system that fails to service 6,400 residences.

* Now our Mayor is talking about charging you with special levies to pay for her downtown agenda.

* She promised a new downtown library eight years ago. Another broken promise.

* In her first three-year term of office, she promised to build a South End recreation centre. Another broken promise.

* Her administration has failed to increase the city’s commercial/industrial assessment of 16 per cent in all her years in office. Impact? It places more and more burden on residential property owners.

* Her grandiose plans to transform downtown Guelph into a family-oriented people place have already cost millions. Apparently, the administration is still unable to prevent humans from relieving themselves on the streets on weekends.

* The city then spent $33 million to lure condo developers to build hi-rises in the downtown area. That’s like transforming a chicken coop into a birdcage.

* No thanks, I wouldn’t spend $400 grand to live in that area of town.

* What ever happened to the downtown men-only pissoirs program? Nothing, although the six-week experiment collected 2,400 liters of urine.

* Was it good judgment to spend at least $16 million on renovating an abandoned convent on someone else’s property for a new civic museum? Trouble is it’s only open part of the day and most people are unaware of its location. Because the city does not own the property, it is more troubling that it cannot be recorded as a city asset.

* Remember spending $25,000 on the Terry Bradshaw promotional video that co-starred our Mayor? It never returned one dime.

* Do we really need 2,063 employees of whom 199 are earning more than $100,000 a year?

So when you add it all up, do you believe that Mayor Farbridge and her seven supportive councillors deserve re-election?

Four more years of this administration will destroy a fine city and its ability to financially function for years to come. Those who will be forced to pay are our children, their children and their children.

 

GrassRoots Guelph shares employee cost concerns with Saint John, New Brunswick

http://trinitytoday.ca/2014/03/recommendation-guelph-ont-saint-john-twin-cities/

Check out the above link and learn how Guelph and Saint John share similar concerns about the rising cost of public employees and the long term fallout for citizens in both cities.

GrassRoots Guelph (GRG), the independent citizen’s group, has protested the City of Guelph operations since last August. The group researched and presented a petition to the Ontario Ministry of Municipal Affairs and Housing requesting an audit of the city’s finances and operations.

The well-documented four-page petition was presented to the Minister on October 1st, 2013. In a subsequent meeting with the MMAH staff, the data and numbers contained in the petition were confirmed as being accurate.

The Minister recently announced that she would not proceed with the audit request instead saying her officials would facilitate a meeting between GRG and city officials. GRG has requested the Ministry to negotiate the terms and structure for such a meeting.

GrassRoots Guelph and guelphspeaks.ca are pleased that we are not alone in Guelph when city government spends and taxes to the detriment of the city population.

There is now ample proof that the majority of Guelph council are supported by the nine labour unions currently making up 80 per cent of the city staff. With a civic election next October 27, the labour unions are gearing up to support their candidates in the election with money and boots on the ground.

The intent is to have candidates who support the current administration to continue the seven- year leftist programs that the public did not vote for or wanted.

GRG believes that employee costs are out of control and a key cause of the soaring city debt excessive spending plus taxes and user fees among the highest in Ontario. GRG is dedicated to changing the way our city is being managed.

Join grassrootsguelph.com today and participate in a growing organization to elect a council that is responsive to all the people and not the chosen few.

The seven-year itch hits Guelph politics

March 22, 2014

Not content to bleed the taxpayer’s ability to pay, our Mayor now wants to force property taxpayers to pay special levies to redevelop the Baker Street parking lot and stimulate commercial/industrial development.

Seems the administration has finally awakened to find the cupboard bare and is now looking for ways to increase revenue to meet its array of dodgy projects and surrealistic long range planning. The level of debt has maxed out that option because the city has to cough up $34 million for a new police headquarters.

The Farbridge green team is strong on long range planning but fails in the ability to pay for its cock-eyed dreams of a social state nirvana.

The litany of broken dreams and promises smothers the city like hot fudge on a birthday cake. Trouble is, the administration is the fudge, and citizens are the cake.

Using the levers of power, the Mayor and her team have by-passed real public input and comment. Instead their staged events are either loaded with supporters, staff or consultants but rarely elected officials.

This is how we get a multi-million dollar waste centre, the thing we used to call the dump that fails to meet the needs of the city but whose services are offered to other municipalities. Your tax dollars went into this project without your say or input or knowing to this day how much it costs to operate it.

A $15 million cart-based waste collection system was arbitrarily imposed on all city residences and businesses and fails to service more than 6,400 households.

While this and other projects may please some, there are a lot of residents who feel too much of the city’s business is conducted behind closed doors. To say that the public is fully informed of the administration’s decisions is a charade.

The city’s communications are carefully composed to lull you to sleep. The two local newspapers are complicit at times with the city message and often fail to offer both sides of the story.

This results in a situation of controlling the message at will with no ability to question or be informed of those decisions that affect all citizens.

In the past few months, the administration hired a Toronto consultant to advise them on how to operate an open and transparent government in Guelph. The cost of this exercise was $100,000

After almost eight years in office, the Far bridge-dominated administration seeks professional advice on how to run an open and transparent government.

The odd part of this decision is why now and what will change?

Is this not an admission that for all that time, the administration did not operate in and open and transparent fashion? That was a key platform issue that Karen Farbridge promised on the eve of her election in 2006.

This is classic Farbridge tactics, to use the people’s money to reinforce her message image and track record.

Remember when she promised to “put Guelph back on track?”

That is some record and some track.

Hits, runs and errors, the Empire strikes back

Posted March 21, 2014

If you ever want a metaphor on the seven-year hitch of the Farbridge administration, you don’t have to look farther than the green Living Wall in city hall.

This was a proud benchmark for the green team, aka the Farbridge control group on city council. Now we learn that it isn’t easy being green. The Living Wall has not stood up too well in its city hall environment. In fact it died and had to be replanted.

Its care and monitoring, staff reported, is costing $1,000 a month. Heck, it’s a small price to pay for principle, you think? A similar experiment failed when the green team put plants on the roof of the new city hall. That too proved to be unsuccessful and a reported $250,000 was spent to replace it.

Which brings us to an article written in the new Guelph Citizen blog. The author was Andy Best, last known as president of the Guelph Civic League, still remembered for its ramrod support of the Mayor and her team of greenies in 2006.

Mr. Best was extremely critical of GrassRoots Guelph, calling the organization a “struggling” advocacy group. For a year, he charged the volunteer citizen’s group was looking for a conspiracy under every rock in town

What he failed to realize was not only was his statement pure hyperbole, but the GRG easily uncovered real problems in the green team’s financial reporting. In fact, the Ministry Officials admitted that the numbers in the petition were accurate.

Andy, you are a naughty boy. Your misguided diatribe against a legitimate citizen’s group, that has raised real concerns about the way the city has been run for the past seven and one half years, is not journalism but propaganda.

Here are more OOPS! As written in your GCL editorial.

OOPS!  GRG never, ever said the administration was “cooking the books, lying to citizens and generally making a mess of things.” What was said was professional accountants might interpret manipulation of financial data by an administration could be “cooking the books”.

Andy, a word for the wise, GRG does not make stuff up. We don’t have to. With expert digging into the city’s financial statements and reports, it is apparent that there is financial manipulation to mask reality and support excessive taxation and spending. The two top city officials charged with accounting and reporting the state of the corporation finances, neither has a formal degree in finances. During the Farbridge administration, there have been three Chief Administration Officers and five Chief Financial Officers.

OOPS! So Andy, you say GRG is bad for the city and civic engagement.  Under your claim, there should be no citizen protest or criticism of an administration. Those administration policies and confrontational tactics with other jurisdictions have damaged the reputation of our city far and beyond what GRG is alleged to have done.

OOPS! Let’s talk about taxes. Out of 444 Ontario municipalities Guelph property tax rates stand 19^th. Still think that’s middle of the road? Why did the council announce the property tax increase for 2014 would be 2.37 per cent when the real figure is 4.36 per cent because of the increase in assessment? Oversight or lying by omission?

OOPS! GRG doesn’t hate anyone, particularly your boss and mentor Karen Farbridge. This isn’t grade five anymore, Andy. The group does object to the Mayor’s operation of the city and that was the genesis of the formation of GRG. It was those ‘Vision” statements by the Mayor that made peoples’ financial sphincters tighten.

OOPS!  The petition is far from dead and more and more people are signing it. You’ll be hearing more about this later.

OOPS! Andy, by spending several paragraphs claiming GRG reports are lies, demonstrates a paucity of clear thinking. What possible purpose would GRG achieve if it represented falsehoods?  We certainly cannot speak for Deloitte and Touch, the Minister of Municipal Affairs and Housing or Cam Guthrie. But we can praise internal Auditor Loretta Alonzo who uncovered the $5 million 2013 scandal of excessive employee overtime and attendance to the job. Hmmm, wonder why Deloitte failed to pick that up?

OOPS! Sorry Andy, But excessive taxation and service charges, waste mismanagement, student housing and spending on mindless programs are major issues the GRG will examine and reveal to citizens.

OOPS! A number of citizens are wondering about who is paying the bills for the Guelph Citizen and the editor. GRG is a volunteer organization that depends on its members to fund the operation. Nobody gets paid. There are no major donors or angels just ordinary, taxpaying folks who want to change the way our city is being run.

Your trouble is, to paraphrase Jack Nicholson, “you can’t stand the truth.”

Of course you haven’t been around town that much.

 

The growing threat of hidden costs of public sector pensions

Posted March 20, 2014

There is widespread concern among taxpayers across the country that public employee pensions are growing faster than those in the private sector.

The Ontario Public Sector Disclosure Act (PSDA) requires all 444 municipalities in Ontario to report the salaries and benefits of those public employees earning more than $100,000 a year. It’s called the Sunshine List and the city-originated report must be filed before March 31. This year the City of Guelph stated in a news release that 144 of city staffers made the list. That did not include police services employees and there are 55 of them making the grade.

In 2013, 199 Guelph employees earned more than $100,000.  That is compared to 178 in 2012 or an 11.79 per cent increase in one year. The city says it controls staff compensation by not filling vacant positions. If true, then the city staff establishment needs a drastic review to reflect the actual staffing needs of the corporation.

Bill Tufts of the Fair Pensions for All organization says the Sunshine list fails to list 25 per cent or more of additional benefits including pension contributions, sick time, vacation payouts, pensions and free retirement healthcare.

All of these unreported benefits plus salaries, wages and reported benefits are paid by the taxpayers.

The alarming growth of staff in Guelph, now 2,069 full time employees, up from 1,450 in 2006, is 42.68 per cent in seven years. When coupled with the annual increases awarded in labour contracts by the administration, it is easy to understand that the taxpayers have already been placed in a precarious position when it comes to supporting the rapid growth of staff and compensation.

And Guelph’s civic staff is 80 per cent unionized.

How the system is gamed

Here’s what the Brookings Institute think tank says about galloping public sector pension costs.

“There are three basic problems with (the public sector) pension system. With a combination of high unionization, lots of money, and low voter turnouts, public sector unions now control the political process and election results in Canada.

“Public sector unions are often highly involved in raising funds and donating to the campaigns of political candidates, often with the goal of preserving the pension status quo.”

Bill Tufts says “One of the things I think the unions and politicians have gotten onto is they can put more into those packages and it’s not going to show up because it’s not reported on the Sunshine List and also doesn’t come up in compensation agreements.”

When Guelph’s city employee compensation costs take up 80 per cent of the city’s property tax revenue, it’s no wonder that taxpayers have faced an average of 3.6 per cent increase in property taxes in the past seven years.

In 2014, that jumps to 4.36 per cent due to the increase in property assessments. As your assessment goes up, so do your taxes.

The one candidate for Mayor, Karen Farbridge, has received support from the municipal unions in her last two elections.  This is an example of how employee numbers and costs have soared under her stewardship.

The Brookings Institute put it this way: “There is no daylight between them (management, legislature) and labour. They are on both on the same side of the table, and this creates a serious principal agent problem. There is a real void between the legislatures and every other actor on pensions and so it’s not surprising we have a mess.”

Those comments have great value and resonance with a growing number of informed citizens. The combination of overstaffing, the growing percentage of unreported staff benefits, and too generous increases and benefits are slowly strangling our city.

So far, large annual tax increases and user fees have barely been able to keep up.

But here’s the direction our city is headed. House prices will go up along with higher taxes. Because of high costs, this will discourage people from moving here and more important, will make it increasingly harder to attract business and industry to the city.

We are already one of the highest taxed municipalities in the province.

It’s something to think about next October 27 when you cast your vote.

Stay up to date with events that affect your city and your financial security. Join GrassRootsGuelph.com. It’s a non-partisan, non-profit citizen’s group with members, just like you, determined to bring fiscal responsibility and common sense to the council table next October.