The dog must have eaten the Mayor’s homework

Posted September 27, 2014

This election has evolved into two polarized factions: Those who support Mayor Karen Farbridge and her team of elected supporters and those represented by GrassRoots Guelph (GRG) who oppose the policies and management of the city.

There are fundamental differences between the two.

GRG, from the first day of founding in the summer of 2011, emphasized informing and encouraging citizens to vote October 27 to elect a new council.

GRG is the only citizen’s organization that has examined the city’s official financial reports and exposed serious errors. This was performed by a professional financial analyst. It then culminated in a petition to the Ministry of Municipal Affairs and Housing requesting an independent audit of the City of Guelph’s finances and operations.

Ignoring her own staff’s confirmation that the figures and data in the four-page petition were accurate, the Minister, at the time, rejected the request stating it was a local issue and the two parties should resolve their differences.

Nothing has changed and GRG stands by the content of its petition to this day.

Then along came Urbacon. Following a five-week trial in early 2013 between Urbacon Buildings Systems Corp., general contractors for the new city hall, and the City of Guelph who terminated the $42 million contract before completion.

The contractor sued the city for $19.2 million following termination September 19, 2008.

In late March this year, almost six years after the dismissal, Justice Donald MacKenzie found the city wrongfully dismissed Urbacon. In June, the Justice released his reasons for judgment in a scathing, 54-page indictment of mismanagement of the contract by the city.

The city attempted, in a separate trial, to delay the damages portion of the Urbacon trial until after the civic election in October. That was dismissed and reaffirmed the order that the damages portion of the trial must begin October 14.

In mid-September, the city announced a settlement with Urbacon paying $6.635 million. It also revealed its legal expenses were $2.3 million.

Now even if you recently arrived from planet Pluto, you would quickly see that the Farbridge administration made a gigantic mistake, one in which the citizens are paying for.

While the administration and its supporters spin the $8.635 million as not affecting the city’s property taxes, the fact remains that the loss is on the shoulders of the citizens regardless if they own property or not.

The city says the funds will come from reserves, but not specifying which ones. Further they say the reserves will be replenished within five years. Sources? It will come from future revenues including property taxes.

See? It didn’t cause an increase in property taxes at all, right?

But let’s take a look back at how taxes have increased in Guelph since the Farbridge administration has been running the show.

This is a personal experience. We have lived in Guelph for 11 years. In that time our taxes have doubled to just under $7,000. Taking an average cost over 11 years of $5,000 our tax contribution during that period is $55,000.

Because we live on street that is designated as a land condominium, we must pay a private contractor to pick-up our unsorted waste, pay to have our streets plowed in winter and are responsible for the infrastructure of our street including water and sewer pipes feeding into the city system.

But the city does not give credits to property taxpayers for services they do not provide. People who choose this type of housing, end up paying double.

Now let’s compare the property tax rates between the University of Guelph and the 6,400 residences who live in condominiums of different types but are not serviced with waste pick-up, or streets being plowed, or leaves being picked up.

The university is the largest landowner in the city of Guelph. Yet its provincially invoked system of paying property taxes has not changed since 1987. Here’s how it works. The university pays $75 per student in lieu of property taxes. There is an estimated 22,000 students attending so that works out to $1,650,000 per year.

Comparing what our property taxes averaged over 11 years, $55,000, to what the university pays, $825 in the same period reveals there is a huge disparity that favours the university. Historical note: In 1775, they held a tea party in Boston dumping tea in to the bay in protest of taxation without representation.

This unfair system does not include the city-subsidized transit service provided to university students. Or supplying city services to the ever-expanding institution. Or considers the income the university receives from leasing its lands along Stone Road to commercial and residential developments.

Here’s another example. A single, modest industrial operation in the city pays more than $200,000 in property taxes. That’s 12 per cent of the total paid by the university and it’s just one of hundreds of industrial and commercial operations in Guelph that have endured excessive property taxation. Is it any wonder that the city has failed to increase its industrial and commercial assessment from only 16 per cent in eight years?

Taxes are just too high compared to peer municipalities and it discourages development and job creation.

This is the basis of discontent of most of the city residents, especially those on low or fixed incomes facing property taxes that have increased by more than 3.5 per cent annually since the Farbridge administration took over. The argument that properties have increased in value is specious because taxes must be paid annually. Property appreciation doesn’t occur until it’s sold.

Now, two letters in the Mercury from obviously die-hard supporters of Mayor Karen Farbridge, state it’s not her fault or responsibility. In one, the writer says the Urbacon lawsuit was the fault of city staff. The other is a love-in for the Mayor and what a wonderful, accomplished person she is winning all those awards for which she applied.

So now Farbridge supporters are turning on the city staff for losing the Urbacon Lawsuit. Gotta love this line from the letter to the editor: “The Mayor has no responsibility for a mistake made by city staff.” Well, assuming that writer’s statement is correct, if not the mayor and council, doesn’t that just leave the hired hands holding the bag?

Now hold on. Of the city staff, 80 per cent are members of a union. They are the bedrock of financial support for the Farbridge candidates, including the mayor, in the upcoming election.

With that kind of comment, is organized labour going to be less enthusiastic supporting the Mayor and cohorts?

Bottom line? Four more years of Farbridge will result in more of the same abuses of the public trust: More taxes and user fees, special levies for downtown projects, neglect of other parts of the city in order to support downtown development and finally, more secrecy in operating the city.

This time, stay tuned because there are alternatives about to be presented to end these destructive policies.

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4 Comments

Filed under Between the Lines

4 responses to “The dog must have eaten the Mayor’s homework

  1. Essie

    I’ve copied this comment from a previous posting because it seems to be more in context here. Hope that’s okay. We obviously live in different neighbourhoods!

    Thank you, Gerry and Brent, for your additional information. To give you a personal example, based on my own situation, here are the actual dollar amounts per year my taxes have increased over the last 11 years:
    2004 +283.19
    2005 +85.28
    2006 +82.60
    2007 +72.29
    2008 +86.83
    2009 +109.07
    2010 +100.80
    2011 +61.13
    2012 +112.63
    2013 +188.84
    2014 +86.05

    I live relatively modestly in a small house that was built in 1932, and I have been retired and living on a pension since 2009. The assessed value of my house seems to go up by about $10,000 each year. I also see that there is an education levy of $500 and a public health levy of about $50 included in my final tax bill of just over $3000 for 2014. If there had been a zero tax increase in 2014, I would have less than $2 a week back in my pocket. Even in 2004, the most expensive year, I’d have had approximately $5 a week more to spend. Aside from the quite different concerns about how a municipal government spends those tax dollars, I honestly don’t feel like my property taxes are going through the roof compared to the rising costs of necessities like gas and groceries.

    • Brent

      Hi Essie
      Thanks for your great research….as you see you are paying compounded just over $1200 more per year in municipal taxes. Assuming you were paying just over $1800 in 2004…that would be a increase of about 67% over 11 years. If you live in the part of the city where assessment has risen slower than avetage you may even have gotten a tax rate reduction compared to others. Even so I challenge you to find what percent of we average folk have gotten a 67% increase in our pay over the same period. As for utilities and other necessities their rise has added more burden to the average homeowner…but note these are necessities not nice to haves which the Farbridge gang have often immersed us in. As well , the propensity of the Farbridge group to hire people at a far greater rate than our popultion growth with generous salary and benefits for fear of a race to the bottom in compensation (eg 1.5 Forestry personnel hired for $260,000 in the 2013 budget) promoted by both Piper in her blog and Laidlaw in council assures that we are rapidly reaching a point of unsustainability…..not to speak of the long growing backlogged list of multimillion dollar capital projects needed or wanted …remember we are not a country, or even a province…just a community of some 45,000 households…just basic common sense should tell us we will soon face our financial day of reckoning on the Farbridge train ride.

  2. Essie

    Hi Brent,
    I still think quoting percent versus actual dollars makes the whole tax increase vs. salary increase sound much worse than it actually is. Even a 1% increase in my pension (about what I got last year, indexed to inflation) amounts to a lot more than $86 a year in ‘cash in my pocket’ value.

    As I said, the issue of how tax dollars are spent is quite another matter. I’d be interested in finding out if anyone here knows how much municipal spending is locked in for provincially mandated responsibilities like policing, for example. How much leeway in ‘discretionary’ spending is there in any given municipal government’s annual budget?

    To be fair, I should also point out that in my case, large annual tax increases occurred during both the Farbridge and Quarrie mayoral terms in office.

    • Essie: The first year of the Quarrie term saw a large increase in taxes to clean up the financial wreckage left by the first Farbridge term. You will recall the shortfall caused by Nustadia in failing to meet its obligations operating the new arena on Woolwich. That Farbridge approved deal cost the city some $4 million to clean up. Or throw in the wet dry plant that the Quarrie council had to close down because of the odours permeating the neighborhood and disintegration of the building. That cost the city $40,000 in fines by the Ministry of the Environment. Mayor Farbridge has a history of mismanaging the people’s treasure.

      However, the Urbacon mess, costing more than $15 million, tops them all. No matter how she spins it, she is responsible with her council supporters, who agreed to terminate the Urbacon contract. In her current blog she claims council sought the legal advice of an outside legal firm experienced in construction contract law. The outfit recommended terminating the contract.

      Justice Donald MacKenzie differed in his judgment saying the original contract used a Canadian Construction Association contract form. One that is used in hundreds of municipal and private construction contracts. For the Mayor try to convince the citizens that her administration has taken steps to prevent this from occurring again is too little too late. Plainly, her council’s faulty decisions and circuitous explanations do not deserve re-election for another four years.

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