The people voted for change, did senior staff not get the message?

Posted January 5, 2015

Question: If consumption of your product drops by 13.3 per cent over the past ten years while the number of customers increases by 13.6 per cent in the same period, why are water rates in Guelph increasing by 4.3 per cent in 2015?

Better still, why have water rates in Guelph increased by 77 per cent compounded in the past eight years? Taking just one year, 2012, Guelph water rates increased by 11.5 per cent.

The total water revenue received by the city in 2014 was $54.7 million. Yet, despite this, the water department budget had a shortfall of $658,000.

Explain how water consumption drops lowering operating costs, and the number of paying customers increases, why is there a recommended 4.3 per cent increase in 2015?

These facts were detailed in a report in the Guelph Mercury that quoted figures supplied by the city water department.

If ever there was a reason for a total independent financial review of all city finances including all departments, this is a clear indication why city finances assumed by the new council need to be reviewed.

The annual audit by Deloitte and Touche covers only a portion of the financial activities of the city. The firm’s mandate is determined by the city that provides the data for the audit that must be submitted annually to the Ministry of Municipal Affairs and Housing.

Even before the recent civic election, several alleged errors that the citizen activist group, GrassRoots Guelph, revealed in those provincially mandated Financial Information Reports (FIR).

Add to the list of serious financial decisions made by the former council, was the approval last August of spending $34 million on renovating the downtown police headquarters.

In the initial meeting of the new council, Coun. Bob Bell moved to review the plans for renovating St. George’s Square on Wyndham Street. He was informed that under a procedural bylaw, council could not review the decisions made by a majority of the previous council.

Not so fast! David Kendrick in his Mercury column said the bylaw in question was crafted to prevent a project being continuously brought up during the term of that council. That was then and this is now. Mr. Kendrick, a former councillor, put it straight when he said the previous council couldn’t tie the hands of its successors.

Coun. Phil Allt also took a similar path in a letter to the editor. He suggested council, regarding intent and legitimate rules of procedure, should review the bylaw.

If council decides not to order a financial review of the city’s finances, operations and procedures, how can councillors make informed decisions to approve a 2015 budget?

There are many significant reasons to conduct such a review. Paramount among them is the post-election reorganization of the senior staff. Chief Financial Officer Al Horsman was shifted to run the waste management department. His former responsibility was moved to Mark Amorosi, with a treasurer to be hired to support him.

After three years since the last senior staff reorganization that created five department heads to manage the city under Chief Administrative Officer (CAO), Ann Pappert, it now functions with only three. All three are now appointed deputy CAO’s.

All this occurred after the election. Why, as Ms. Pappert explained, this was in the works long before the election? Why was the announcement made after the Farbridge administration was rebuked in the election?

If it smells like a set-up to continue the Farbridge agenda, it is a set-up.

The city has a problem in which the senior staff is politicized. There are many excellent employees working for the city but leadership has assumed too much power at the expense of the council. A professional senior staff is essential for the smooth operation of the municipality. But they are responsible to council who represent the people

The people voted for change, not an extension of the Farbridge administration’s tax and spend policies.








Filed under Between the Lines

5 responses to “The people voted for change, did senior staff not get the message?

  1. Glen N. Tolhurst

    That the water rates are rising in the face of decreasing consumption indicates that the fixed costs of the department are too high. The management of the department has to be changed to one that understands flexible zero-based budgeting. The days of rampant increases in employee numbers under the previous tax and spend mayor and council were then and are now unsustainable. Anyone in the senior administration (the CAO & her 4 deputy CAO’s) who believes they can continue in their old ways should be subject to a “come to Jesus meeting” wherein the new facts of life in the post Farbridge era are made abundantly clear and if they don’t get the drift, “the question of personnel” has to be raised. Time for change!

    • Glen N. Tolhurst: It would help if the staff costs of operating the water/sewer system were made known. But that’s the gorilla in the closet, in a manner of speaking. The cost of the city staff is eating the citizen’s lunch. Some 80 per cent of all property tax revenues go to paying the staff. Of total revenue collected by the city, taxes, user fees, grants, rebates and development charges, the city staff accounts for 46 per cent of the total. This figure alone begs review. The city is a business where business practices apply. Spending 46 per cent of revenue on employees in the private sector would be a pathway to bankruptcy. But under provincial law, municipalities cannot go bankrupt, they cannot operate with a budgetary deficit and the elected members of council are charged with the fiduciary responsibility to make sure it doesn’t happen.

      So, how does the city council manage revenue and expenses? The primary source is property taxes. Guelph just experienced eight years of excessive taxation with a compounded increase of more than 38 per cent (the 2014 Financial Information Report has yet to be published). The last year of the Farbridge regime bragged about how the 2.36 per cent property tax increase was the lowest in its two terms of office. Two things stand out: It was a political move to stifle criticism of the ever increasing tax rate; what was conveniently left out was the increase in assessment levied by the Municipal Assessment Corporation. That added another two percent to the total increase to 4.37 per cent. The people were not fooled and the result was a vote to change.

      Controlling tax increases is the tip of the iceberg. What’s needed is an independent review of city finances and operations. The place to start is examining the fixed costs of operating the city. And members of council should be directly involved in such a review. That’s where the buck stops.

  2. Mary Heyens

    Glen and Gerry, click on the link below. Jan 6, 2015, 80 % of Toronto Taxpayers vote in favour of privatizing garbage pick-up in the east end. Also, read the updated links posted with this article (left hand side of the screen heading ‘More Coverage’). People are fed-up paying dishonest union workers $27.50 / hour plus-benefits to pick-up garbage and water plants.

    • Mary Heyens: I think it is incorrect to label union workers as being dishonest. The city staff unions play an important role in the growth and development of Guelph. Hopefully the city staff, of which 80 per cent are unionized, will work cooperatively with the new council. The work ahead is fraught with contentious issues. Only working together can resolve these issues

  3. Mary Heyens

    Gerry Barker: Thanks for your Jan. 7th reply. I believe the unionized city staff number is closer to 50%. Mary Heyens, Guelph

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