When council blows $8.93 million, the solution is to approve the highest taxes since 2010

Posted April 3, 2015

It was just over a year ago when Justice Donald MacKenzie told the city they were responsible for firing Urbacon Building Services Corp in September 2008. The builder of the New City Hall initiated the five-week trial, preceding the judgment, after it was ordered off the job site. It sued the city for $19 million for wrongful dismissal.

At first, the city’s response was to consider appealing the judge’s decision. Spokesperson on behalf of the city was Chief Administrative Officer, Ann Pappert, who was not involved in that 2008 decision.

Mayor Karen Farbridge was silent on the decision and when the full judgment was released in June, it became apparent that the city’s expectation for a win on appeal was dim.

Then without any fanfare, the lawyer representing the city, Derek Schmuck, of Hamilton, was instructed to ask another judge to delay payment of any settlement until after the October 27 election. That judge denied the application because the city and Urbacon had previously agreed that any settlement had to be completed by October 1, 2014.

Around this time the mayor finally spoke up and apologized on “behalf of the City of Guelph, for the contract overruns”. To this day, the former mayor has not personally accepted responsibility for the Urbacon firing and resulting costs. There has been no announcement by the city of its costs in managing the lawsuits. Yes, Urbacon was only one of four lawsuits.

The election campaign heated up in September and a citywide poll put candidate Cam Guthrie well ahead of Ms. Farbridge. It was conducted by a recognized polling organization. This precipitated settlement discussions between the city and Urbacon.

In September, the city announced it had settled with Urbacon and agreed to pay the company $8.930 million that was approved by the court. This was clearly an attempt to deflect responsibility from the Mayor who was running for re-election.

Following the announcement, CAO Pappert said the settlement would not impact property taxes. The funds would be drawn from three reserve funds that had no relation to unbudgeted legal costs. Further, the CAO said those reserves would be replenished over five years at the rate of $900,000 a year. That totals $4.5 million, which is $4.43 million less than the Urbacon settlement. It still leaves a gaping hole replenishing the money taken from the reserves to pay the settlement.

Then on March 25, 2015, a majority of city council passed the 2015 budget that increased property taxes by 3.55 per cent. It was the highest tax increase since 2010. Tucked into that approval was a motion to reduce the $900,000 Urbacon reserves repayment to $500,000 and refer the issue to city staff to work out a new repayment plan. Was there no discussion about this before CAO Pappert announced the settlement would not affect property taxes?

Why was it brought up at the final 2015 budget meeting after the public hearings? The citizens had no opportunity to challenge the Wettstein motion.

It’s ironic this was approved by many of those same councillors who were on council when Urbacon was thrown off the job in 2008. These include Karl Wettstein, (who moved the motion), Mike Salisbury, June Hofland, Leanne Piper, Bob Bell, Christine Billings, (one of four councillors who voted against the budget bill). Newcomers Phil Allt, James Gordon and Mark McKinnon also supported the final budget.

Opposing passage was Mayor Guthrie, Andy Van Hellemond, Ms. Billings and Dan Gibson.

It was a crafted effort by the leftist majority on council to discredit Mayor Cam Guthrie and his election promise to keep property taxes at the rate of the Consumer Price Index of about 2.1 per cent.

It also represented a lack of fiduciary responsibility by those supporting this tax and spend budget. It smells of political payback for the defeat of their leader Karen Farbridge. In this kindergarten atmosphere how can the people trust its council to do the right thing and work together to change the way the city is being managed?

The answer is that they can’t. The majority of this council is dysfunctional and obstructionist to change and will continue to do so for the next four years. Not surprising is the presence of newly elected Coun. James Gordon, architect of Kate Quarrie council’s defeat in 2006. As founder and former president of the Guelph Civic League, it now appears that those obstructionist tactics are still in play.

As for Mayor Guthrie, he is the leader of the city, elected by all the people. He deserves better. As U.S. President, Teddy Roosevelt put it: “Walk softly but carry a big stick.”

There is no longer any doubt that this budget was manipulated with the aid of a politically enabled senior staff, all of whom were hired by the Farbridge administration.

You will start to see the effects of this 2015 budget when your tax bills arrive in June and September.

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1 Comment

Filed under Between the Lines

One response to “When council blows $8.93 million, the solution is to approve the highest taxes since 2010

  1. Glen N. Tolhurst

    One should ask the members of council who voted for the 3.55% property tax increase if they realize that increase has to be paid out of citizens’ take home pay i.e after federal & provincial income taxes, CPP, OHIP health charges, fuel taxes, and GST. If they acknowledge that, then those who voted for the increase should be given a blank piece of paper on which to list all Guelph taxpayers whose take home pay rose by that 3.55%. When they get back a blank sheet of paper, is it likely that it will twig on them that by foisting the 3.55% increase on the citizens, the citizens will have to cut back on frivolous outlays such as food, housing, health care, clothing, education, and recreation to name but a few items. Looking at who voted for the3.55% increase, the rump of the Karenista faction and leftist buddies held true to their dogma of tax and spend. Wettstein, after his protestations in the press last fall that he was a Progressive Conservative rather than a part of the Progressive group, reverted to his expected role. Is MacKinnon showing his true colours rather than those of a professed business person? If so, how galling and what a waste of a vote last fall by many who were expecting better from him!!

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