Monthly Archives: January 2015

Some councillors have short memories condemning a notice of motion by the Mayor

Posted January 12, 2015

The Tribune quotes the left-leaning councillors who are riled up over the Mayor’s notice of motion to restrict property tax increases in 2015 to the Consumer Price Index, (CPI) inflation rate.

New Coun. Phil Allt suggested it is inappropriate to accept the CPI as the basis of creating a civic tax base. Instead he says the tax increase should be based on the Municipal Price Index. This is an index created to assist staff to establish increases in property taxes based on costs. Its basis is unknown and certainly not understood by 99 per cent of taxpayers.

What Mr. Allt has yet to grasp is that this city has just gone through eight years of excessive property tax increases that will, when the 2014 Financial Information Report (FIR) is made public later this year, exceed a compounded rate of 40 per cent. That’s an average rate of 5 per cent a year. What the former administration left out of its 2014 announcement of the 2.36 per cent property tax increase was the increase in the assessments across all city property. That omission created a real increase of 4.37 per cent in 2014.

He should also understand that that 46 per cent of all city revenue is used to pay the salaries and benefits of the city staff. In terms of growth percentages, the city staff has grown far beyond the increase of Guelph’s population in the past eight years.

Mr. Allt, you are forgiven. Unlike some of your colleagues elected to council in October, they seem to have suddenly had a loss of memory of the past eight years when serving on council.

Take Coun. Leanne Piper. In her response to the Tribune, she favours an open and transparent government to discover evidence to: “Find efficiencies, new revenue and/or cut services, we must be willing to do it openly with community input and take responsibility for the impact or risk.”

Let’s get this straight. Does Coun. Piper pretend that she was not involved in the past eight years in an administration that conducted 80 per cent of its business behind closed doors? Did she have an epiphany, following the defeat of her leader and mentor, Karen Farbridge?

But her remarks get more interesting. She tells the Tribune: “I am worried that cuts to capital infrastructure replacement or reserves would require catching up in subsequent years.”

Coun. Piper, along with former Mayor Karen Farbridge, was a member of the Guelph Police Services Board that approved spending $34 million to renovate the downtown police headquarters. Where was the public input in that decision?

Now she is opposed to cuts in reserves. Even after the former administration, through CAO Ann Pappert, said the Urbacon trial settlement would not cause an increase in property taxes, as the money would come from three reserve funds. The CAO says the reserves will be replenished within five years.

The real cost of the Urbacon mess is yet to be known. The $8.9 million cost to pay Urbacon and lawyer’s fees is only part of the real cost, Estimates are as high as $20 million when all costs are tabulated.

Does Coun. Piper and her veteran colleagues from the former council, really believe that property taxes will not increase because of the Urbacon settlement? Where do they think the money comes from? It’s the taxpayers who have already committed millions to the various reserve funds. Now we have to replenish them. Most of that replenishment will come from your pockets.

Coun. Piper, who has aspirations to be elected mayor, should get a grasp of what happened October 27. The Farbridge administration left our city in a financial mess through mis-management and approving long-term capital projects that the city just cannot afford without mortgaging the citizens for years to come.

If the new council is serious, it should approve an independent financial review of city finances and operations before considering the 2015 budget. Commitments made by the previous council must be reviewed and a new course of action adopted.

Otherwise, how is it possible for council and staff to even consider a new budget?

Citizens must be wary of the obstructionist politics now being exercised by certain members of the previous council.

The mayor is right to bring order to the city affairs to the council table. A notice of motion is a good beginning.

And Chair of Finance, Coun. Hofland, please stop whining that the mayor did not consult you. It was merely a notice of motion. Your chairmanship of finance for the past three years was not impressive when you failed to understand zero-based budgeting.

But you are not alone. In eight years the Farbridge administration did not adopt a policy of zero-based budgeting.

No wonder they got into trouble.

 

2 Comments

Filed under Between the Lines

How Obama and half-price oil is sabotaging the Canada/U.S. relationship

Posted January 9, 2015

President Barack Obama says he will veto any congressional attempt to pass legislation approving the controversial Keystone XL pipeline. The TransCanada Corporation project plans on shipping more than 500,000 barrels of bitumen per day to refineries on the Gulf coast of south Texas.

The recent decision by the Nebraska Supreme Court ruled the project legal access to cross the state, the last outside legal hurdle for the project. It failed to sway the president who reaffirmed his decision to veto any Keystone XL approval legislation from Congress.

The last hurdle is completion of the Obama administration’s 90-day National Interest Determination.

The Republican-dominated House of Representatives has already passed approval of Keystone XL 266-153. It now goes to the Senate, also with a Republican Party majority. But to prevent the president from vetoing the approval will require 67 votes out of 100. Right now, there are not enough Democrat Senators to support the bill and prevent the presidential veto.

And to think that approval of this project has been going on for more than four years. It has been studied exhaustively but a minority of environmentalists pursue its agenda to stop the pipeline.

Let’s review some facts.

The well-financed and organized U.S. environmentalists are not basing their objections on the Keystone project but on the development of the Canadian oil sands that they claim is a global warming environmental disaster.

This is a misplaced effort to control the legitimate development of commodities in a sovereign country. If the pipeline fails, it will spur development of the Canada East pipeline to carry Oil Sands crude to Montreal and New Brunswick refineries. Work is now underway to build pipelines to British Columbia ports.

Within eight years, Canada will have the ability to sell its oil worldwide from ports on its east and west coasts. We will have the potential of being the world leader in petroleum exports.

Why do the U.S. environmentalists believe they can shut down the Oil Sands and other sources of oil in Canada?

Why does the President of the United States want to deliberately destroy a relationship with Canada, the only country in the world that has steadfastly been a supportive good neighbour and major trading partner? No other president has threatened our relationship since President Madison who tried to invade Canada in 1812. We now know how that turned out.

Why then does the U.S allow Venezuelan heavy bitumen, with a density far heavier than that to be shipped from Canada to its Gulf refineries?

Why does the U.S. allow crude from such despotic regimes as Saudi Arabia, Iran, Venezuela and Nigeria to enter its ports?

Why is America exporting domestic oil but denies Canada that right?

Now facing oil at less that half the price of just three months ago, why does the president insist of destroying those American companies who have invested in fracking for oil in the Southwest? Their production costs lie between $85 and $90 a barrel so oil trading currently at $48 virtually puts those U.S companies on a path to bankruptcy.

Do those environmentalists really believe they can stop the production of oil around the world? Oil is a base product for fuel in homes, factories, trucks and buses, railways, aircraft, plastics and baby bottles to name some of the uses of this commodity.

You cannot blame global warming exclusively on the use of oil and natural gas. Every time there is a volcanic eruption among the 272 active volcanoes in the world there is a spewing of millions of tonnes of carbon dioxide. A recent example was the eruption of the volcano in Iceland that was so intense and widespread that it halted air traffic over most of Europe for days.

Canada has no volcanoes.

P.S. While we’re at it, why doesn’t President Obama cough up the money for the U.S. customs plaza on his end of the new bridge across the Detroit River? He should be reminded that Canada is financing this much needed crossing, including Michigan’s share. It is the busiest border crossing in North America.

P.S. While we’re at it, why doesn’t President Obama cough up the money for the U.S. customs plaza on his end of the new bridge across the Detroit River? He should be reminded that Canada is financing this much needed crossing, including Michigan’s share. It is the busiest border crossing in North America.

3 Comments

Filed under Between the Lines

The tragic denouement of a once great province

January 9, 2015

Premier Kathleen Wynne is driving Ontario and its muncipalities into the ditch by introducing costly programs including this year, a 10 per cent increase in Hydro rates.

All this on the back of spending $1.9 billion on smart meters that have failed to reduce consumption of electricity as planned instead, it has sharply introduced higher rates around the province.

One of the causes is the clumsy way the McGuinty Liberal government introduced wind-powered generation that has tied the costs of this form of power for 20 years at rates far exceeding that of traditional nuclear and water power.

Just driving around southern Ontario you can see the hundreds of windmills generating power. Trouble is it is high cost generation and there is too much of it. There is no way that this excess costly generation can be stored so it is sold to U.S. adjoining states at below cost.

The winners are those private companies that built these wind farms because the provincial government made long term, costly contracts as an inducment. Then add the billion dollars spent to demobilize the two partially constructed gas-fired generation plants in Oakville and Mississauga.

The ongoing OPP investigation into whether this action was the result of political determination to save four Liberal seats in the 2010 provincial election, has yet to be concluded. The files pertaining to this event were removed from the computers in the Premier’s office.

The ten-year record of managing power generation in Ontario is a mismanaged financial disaster that has made the province uncompetitive and created the highest cost of power in North America.

It has led to the destruction of the manufacturing sector in the province. Many rural and even larger communicties, in Ontario, are facing financial disaster as residents can no longer pay the ever-increasing property tax rates. It has divided the private and public sector where public employees are working with guaranteed jobs and benefits that private sector employees cannot match.

The loss of manufacturing jobs is endemic throughout Ontario. Young people in the smaller communities are migrating to the big cities for jobs. This leaves an aging population that struggles to pay the ever-growing tax increases, higher utility charges. Three small cities come to mind, North Bay, Windsor and Timmins where there is a growing net decline in population.

This a growing social problem created by the Liberal governments in Ontario. Excessive spending on power generation, full time kindegarten and public employee union contracts, has resulted in an ongoing annual cash deficit of more than $12 billion. This must be borrowed and financed. At an average loan rate of 3 per cent, the annual interest cost is $360,000,000 before any principal is paid.

At that rate, Ontario Finance Minister Charles De Sousa will be long gone before that deficit disappears. He is predicting the deficit will disappear by 2017, the year before the next provincial election.

With the province struggling to rebuild its manufacturing base, there is little opportunity to create revenue to shut down the huge deficit. If you are Ford or Honda, you squeeze money to expand production facilities. If you are the chief financial officer in hundreds of stressed communities, good luck.

Guelph has recently experienced a direct consequence of excessive spending by the former administration over eight years. The result is a city with high costs, a stagnant industrial and commercial assessment base and that means the residential sector bears the weight of exacerbating financial mismanagement.

The Ontario premier must bear responsibility for this growing problem. The honeymood (sic) is over and the time has come to reduce costs across the board, introduce incentives to grow the economy and jobs and meet the reality of a province in serious decline.

There are 444 municpalities in Ontario that need a change of attitude at Queen’s Park.

The buck stops at the Liberal benches in the Legislative Assembly.

 

 

 

Leave a comment

Filed under Between the Lines

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.

 

 

 

 

 

 

5 Comments

Filed under Between the Lines