If the OFL can’t get its finances together, why should labour drain the public trough?

Posted May 24, 2015

The Ontario Federation of Labour (OFL) is red-faced over a $4.5 million financial shortfall.

The union umbrella organization admitted that it has serious financial problems including a maxed out line of credit. The federation supports common causes for the union movement.

Two former presidents, Gord Wilson and Wayne Samuelson, have sharply criticized Sid Ryan, OFL’s current president since 2009, for the alleged mismanagement of union funds.

There have been three defections from the OFL by large unions including the Ontario Public Service Union (OPSEU), Ontario Nurses Association and Service employees International Union. The result is an $896,000 loss of dues to the OFL.

This has prompted the Canadian Labour Council to intervene to halt future defections and appointed a financial administrator to oversee the OFL operations. Sid Ryan says he inherited the financial problems when elected in 2009.

Part of the unfunded liabilities include banked vacation payouts of $406,277, a $200,000 budget shortfall for the first six months of the fiscal year and an unknown amount for unfunded pension liabilities.

It stands to reason if the public service unions are unable to manage their finances, why do they keep coming back to the city demanding enhancements to their wages, salaries and benefits? By law, the city must balance its accounts annually and cannot have a deficit. The result is increasing revenue to meet union demands. Translation: hike taxes and user fees.

With a staff that is 80 per cent unionized, plus a management association, labour and its elected supporters, has effectively taken over the city government.

The difference is the ratepayers pay for the increasing public unions’s contracts. The attitude prevails that the union’s leadership feels its members are entitled to demand increased wages, salaries and benefits when new contracts are bargained.

The ratepayer has no choice because our elected representatives, collectively, fail to control the escalating labour costs. In Guelph it has reached epidemic proportions with soaring increases in staff numbers and the exponential increases in wages and benefits.

The 2015 Guelph budget approved hiring 21 additional staff. This included some earning high managerial salaries and benefit. Every year it’s the same. Staff officials recommend hiring additional staff and council agrees.

Comparing Guelph’s 2015 property tax increase to 13 other municipalities,

Guelph has the dubious distinction of having the highest rate of all in the 14-city sample.

First, the research on this report employed a common benchmark of dollars per $100,000 of assessment. This allowed equalized comparisons with two-tier municipalities such as Kitchener, Waterloo and Cambridge that are part of the Regional Municipality of Waterloo. The report was researched from official public sources.

Here is the list in descending order:

City                        2015 tax increase                   Ranking                         Difference

Guelph Budget                        3.55%                                     39

Guelph revised – Note A      3.96%                                    44

Hamilton                                    2.70%                                   35                     Minus 1.26 %

London                                       2.50%                                    30                    Minus 1.46 %

Brampton                                  2.54%                                    24                     Minus 1.42 %

Brantford                                   1.88%                                    22                     Minus 2.08 %

Port Colborne                          1.10%                                    18                      Minus 2.86 %

Burlington                                 2.06%                                    18                     Minus 1.90 %

Oakville                                       1.70%                                    15                      Minus 2.26 %

Mississauga                               2.20%                                   12                     Minus 1.76 %

Cambridge                                 2.72%                                   10                      Minus 1.25 %

Toronto – Note B                    3.20%                                  10                      Minus .76 %

Waterloo                                    1.53%                                     7                      Minus 2.43 %

Kitchener                                   1.9%                                      7                       Minus   2.06 %

Windsor                                         0%                                      0                      Minus 3.96 %

Consumer Price Index         2.2%

Note A – Guelph council in 2013 and 2014 shifted some of the tax burden from multi-residential and industrial to residential. The revised increase does not include the mandated increase in assessment or the 4.1 per cent increase in water services.

Note B – Toronto’s increase includes a .50 per cent surcharge to fund a subway extension to Scarborough.

Comparing the Guelph revised rate of 3.96 per cent to the next highest on the list, Hamilton, at 2.70 per cent, the difference is an astounding 31.8 per cent!

Why is it that all these municipalities have much lower 2015 tax increases than the City of Guelph? Collectively, what do they know that the Guelph administration doesn’t?

Reading this report, management of the City of Guelph, when compared to 13 other cities, proves there is a very serious problem in terms of performance including accountability. It is a hangover from the previous administration, that manipulated the city’s treasury to suit its own projects and plans and changed the way our city, in a manner that citizens rejected last October.

And now we continue paying for the mistakes and mismanagement.

In eight years, we have a bloated staff of more than 2,100 employees, more than $132 million of debt, a 40 per cent compounded increase in property taxes, a 77 per cent increase in water rates, despite a reduction in usage. Plus a waste management system that has cost taxpayers more than an estimated $70 million and fails to serve 6,400 households.

But there is no new downtown lebrary, no south end recreation centre, no additional downtown parking facilities and a lagging infrastructure with streets that are among the worst in Ontario.

The 2015 budget was nothing more than a power move by the Farbridge supporters still on council, aided and abetted by senior staffers.

Remember, this is the budget where previously, CAO Ann Pappert said the Urbacon $8.96 million settlement would not impact property taxes. She claimed it was because the funds would come from three unrelated reserves and will be paid back in five years, repaying the reserves at a rate of $900,000 a year. It is unexplained how repayment of $4.5 million in five years satisfies payment of $8.96 million. Well, the truth escaped her in this pre- election statement.

Council, by a nine to four margin, voted to lower that figure this year to $500,000 and have the staff come up with a new repayment plan, Most of these are the same people, elected and some of those on staff, who were responsible for the Urbacon mess in the first place.

Which only proves they know how to spend the people’s money but fail to administer it in a responsible and productive way.

Those of us living in Guelph will suffer because the soaring costs inflicted by this and previous administrations, has already made our city one of the most expensive in the country in which to live.

If the major union umbrella group in Ontario cannot manage its own finances, why should we allow labour to engorge its contracts on our dime?

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1 Comment

Filed under Between the Lines

One response to “If the OFL can’t get its finances together, why should labour drain the public trough?

  1. Randy Norris

    Bravo Gerry.
    While dealing with the previous administration, I always got the feeling that they manipulated every situation to their own advantage. The previous mayor often hide behind ex-counsellor Ken Hammill’s skirt. The amount of money her regime cost Guelph in mismanaging our garbage is appalling without even the mention of the Urbacon fiasco.
    I had hoped for better from the new council but it seems that they have become infatuated with themselves and forgotten the taxpayer.

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