Posted August 20, 2014
In a recent blog in the Mercury’s Internet bloggeria, the resident Rottweiler of the Farbridge inner circle attacked the credibility of GrassRoots Guelph (GRG) and guelphspeaks.ca.
Susan Watson, stuck to our mayor like paper on the wall, challenged GRG’s facts and figures concerning last fall’s request for an independent audit of the City of Guelph’s finances and operations.
She states that the city’s finances are independently audited every year. So far so good. She then goes on to say the audit that was conducted by the “international financial services company Deloitte and Touche.” Yep, she’s right about that.
The gaping hole in her statement is that the city contracts with Deloitte to audit its finances, and the city sets the terms of that contract . There is a limit to what this “independent audit” actually examines in detail. In the City of Guelph’s case, the contract does not require an investigation of any item under $300,000.
What Deloitte doesn’t do is examine or comment on the management of the city.
Keep in mind the city and all 444 municipalities in Ontario are obligated by legislation, to file an annual statement with the Ministry of Municipal Affairs and Housing, called a Financial Information Report (FIR). The reason is simple. Municipalities, by law, cannot run a deficit. It is an archaic system that invites the opportunity to obfuscate the real financial picture with balance sheet legerdemain.
So Ms. Watson, your opinions magnify why a truly independent audit is necessary. Let’s take an example: The city of Guelph versus the Wellington, Dufferin, Guelph Public Health organization.
The public health group decided to spend $17 million on a new head office on Stone Road and a satellite office in Orangeville. The city’s share of this project was $10 million, money that was not included in the capital budget.
So the city went to court to separate itself from this provincially mandated organization composed of the three municipalities. The case was lost and the costs were levied against Guelph including legal bills. In the spirit of its sham claim of operating an open and transparent government, the city refused to reveal those costs to the citizens.
Wonder how Deloitte and Touch handled that one in its annual report?
Watson charged that GRG and guelphspeaks were not aware or “bothered to do any background research or fact checking to uncover the reality of Guelph’s finances that were already audited.” Does she really believe that GRG analysts made this stuff up? GRG was well aware of D & T ‘s role as city auditors.
And Ms. Watson, if you read the petition and checked the GRG numbers with those contained in four years of FIR reports generated by the city, you would come to the same conclusion: This stuff doesn’t add up.
The GRG team, with legal and financial experience, carefully prepared the material in the petition. The analysis was performed over four years of examining the city’s official FIR’s. The fact that the contents were confirmed as being accurate by members of the Minister’s own staff, indicates other political elements were engaged in denying the GRG request. There still remains justification for a deep-diving forensic audit of the city’s finances and operations.
But the Minister deferred the issues to be resolved by the two parties and shortly later resigned.
Here are some other abortive projects that have caused Guelph’s property taxes and user fees to skyrocket in the past eight years.
Building the civic museum in the renovated Loretto convent costing some $4 million over budget.
The $5.2 million cost in 2013 of staff overtime and absenteeism
Spending $33 million on an organic waste processing plant that is triple the size needed by the city for the next 20 years and contracting a third party for its operation.
Voting to spend $34 million on renovating the downtown police headquarters.
Allowing 80 per cent of all property taxes to be consumed by city staff costs.
Admitting to mismanagement of consultant and legal contracts that are in excess of peer communities.
Rebuilding the Wyndham Street rail underpass that does not allow large commercial vehicles to enter without crashing the underside of the bridge.
Approving $170,000 for a new floor for the Farmer’s Market to be told by staff the bill was really $500,000.
Guaranteeing the $560,000 loan for the community-run indoor soccer bubble because the operators were unable to repay the mortgage charges.
The costliest error in judgment is the Urbacon lawsuit in which the Superior Court found the city wrongfully dismissed the new city hall contractor. The damages portion of the judgment will be heard beginning October 14, and could reach more than $30 million.
Ms. Watson, why don’t you ‘fess up to your close association as a Farbridge campaign surrogate? You have no lock on the truth or its genesis.