Another staff report to justify its waste management incompetence

By Gerry Barker

Posted October 30, 2015

Ruvani Shaubel, CA, the city’s internal auditor, who joined the staff three months ago, prepared the curbside waste collection system report. She analyzed the city’s waste system from 2010 to 2014. Her overall conclusion was that city residents are getting good value for their money when it comes to curbside waste collection.

What is good value? The first key consideration is to explain why the curbside management ignores 13 per cent of the number of eligible properties in the city. She reported 6,000 Guelph households and businesses are not served. Out of 51,000 eligible households, only 45,000 had their waste collected.

This is not new information. In fact, guelphspeaks (GS) has reported this for the past three years. The waste management staff never once disputed the GS assertion that there were 6,400 households and businesses that pay private contractors to haul away their garbage, most time unsorted and sent to the landfill.

Also, ‘mam, were you informed that these neglected households also had to pay for city waste pick up through their property tax bill?

From the city staff perspective, this is a great deal. They’re operations are subsidized by a minority of residents who do not receive the service they are paying for through their tax bills. When the proposal to switch to bins and automated curbside pick-up, Dean Wyman, General Manager of solid waste collection and processing, told council the city would save $430,900 by 2014.

According to the internal auditor, the actual savings were $294,000.

The wool expands over the eyes

So the qualifying explanations start flowing. The reason for the bad savings estimate was higher than expected gasoline costs and council’s decision to continue picking up yard waste in the spring and fall.

To put this into perspective: Mr. Wyman expects citizens to believe that the management of his department is in their best interests. It was misleading if he informed council in 2010 that he did not accurately calculate the cost of fuel for the next four years. Particularly in view that per litre gas prices dropped during that period. As to telling an outright lie during his council curbside bin proposal, he neglected to mention his proposal included not doing the semi-annual yard waste collection. During the period, council said waste management had to continue picking up the yard waste in spring and fall.

Members of council in 2010 believed him and agreed to spend $15.5 million on the new system.

For the past three years Mr. Wyman has been promising resolution of problems the new system was experiencing, failing to service 6,000 mostly condominium properties. He said the matter would by part of a new 20-year waste management plan.

Residents and some businesses continue to pay double for waste collection. Few trust what Wyman tells them that their problem will be resolved.

Part of the problem lies with the former Farbridge administration insisted on approving strip condo developments without regard to storage of bins. The building of detached single family homes dried up to less than 160 units a year following Farbridge’s election in 2006.

No thought was given to the ability of the bin curbside pick-up system, including allowing room for the new automated trucks to serve these strip and low-rise condo buildings.

To further slap the owners in the face, city council refused to reduce those affected homes by rebating their property taxes equivalent to the city cost of collection.

She is just doing her job but leaving out the most important aspect

With respect, the Shaubel report is nothing but a whitewash of bad planning, lying by omission and failing to accurately forecast and budget effectively. She did what she was asked and she reported what she was told. She acted professionally and has been exposed to the waste management’s attempts to prop up their story the system is working as they planned.

And Wyman is still trying to placate those residents who do not have their waste picked up. His latest hint is that on November 10, the staff 2016 operating budget will contain provisions to solve the non-pick up issue.

Unfortunately, Wyman has been promising this for four years despite many discussions with affected citizen groups.

This is another example of Farbridge’s bad management historic hangover. She’s gone, but her policies are still around. The author of this waste management mess, Janet Laird, has retired and the financial management of our city remains suspect without a Chief Financial Officer. A year ago, the last CFO was transferred to waste management and has since left the city.

Today, Mark Amorosi, a Farbridge appointee, controls city finances. A general manager of finance, who joined the staff last March reports to him. With Coun. June Hofland as chairperson of the council finance committee, the people is expected to trust these three individuals to manage a $500 million corporation that the people own.

It’s a stupefying assumption that we are in good hands.

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Whats the difference between Volkswagen and the Ontario Liberals?

By Gerry Barker

Posted October 28, 2015

Volkswagen was the world’s largest car manufacturer until it became embroiled in a monumental scandal over lying about the fuel efficiency of its diesel engines. In the current quarter it announced a loss of $1.8 billion and slipped to second place in sales behind Toyota.

Kathleen Wynne’s Ontario Liberals have been stumbling along for two years with a $10 million operating deficit. Now we learn that her government has been making under the table payments to teacher’s unions who, in turn, have spent some $6.1 million supporting the party in at least three provincial elections.

The premier calls the payments “normal” while Liz Sandals, MPP, Guelph and Minister of Education, is quoted as saying the payments were ”nothing about anything.”

So what’s the difference between Volkswagen and the Wynne Liberals?

Volkswagen fired its CEO, shook up the board of directors and acknowedged its mistake of lying to the public about the diesel mileage of its cars. They are pledged to fix it.

Kathleen Wynne and her sidekick, Liz Sandals, are still in charge and driving the public education system into the grave of John Ross Robertson, a key individual who originally set up Ontario’s public education system.

This government has participated in a deal with three teacher unions in payoffs totaling $7.1 million. In exchange for labour peace the quid pro quo of the teacher union’s exclusive support, the unions contributed money and manpower, to the Ontario Liberal party.

Premier Kathleen Wynne was a party to this in the last three provincial elections, first as Minister of Education and more recently as Premier.

The unmitigated folly of these two former public school trustees, thanks to a leaked secret 42-page document to the Globe and Mail, has created a political firestorm of outrage by the public. Thousands of elementary pupils, their parents and the taxpayers are at the mercy of the Elementary Teacher Federation of Ontarto (ETFO) and the government negotiators.

The strategy that backfired on the Wynne Liberals, authors of this debacle

The ETFO is the largest teacher’s union in Ontario. It is the only public education union that refused to accept the million dollar government bonuses.

Last August, three unions settled a new contract, including a 2.5% increase and were paid as follows: The Ontario Secondary School Teachers Federation (OSSTF), $1 million with 66,000 members; the Ontario English Catholic High Teachers Asssociation (OECTA), $1 million with 33,000 members, and the French language teachers (AEFO), $500,000 with 10,000 members.

But the ETFO refused to agree to a similar settlement and refused any so-called, undocumented payment for additional bargaining costs such as the other three major unions had received.

Today, Premier Wynne, announced that receipts were required before any under the counter payments were made. This was a complete slap in the face for Minister Sandals who told the media that her department did not require receipts because they were familiar with the costs of the union negotiating team.

Instead, negotiations broke down. To make its point the ETFO leadership moved to its job action program that started to inconvenience children and parents. Today, October 28, the teachers will leave the classroom at 3:15 and refuse to participate in parent/teacher interviews, will not write report cards, or work on any extracurricular activities.

It would appear that the premier is saying the offer the other three unions accepted, is still on the table. She has threatened to start docking the pay of those elementary teachers who do not carry out their responsibilities and end their job action starting this weekend.

So because the EFTO refuses to agree to the government’s demand to settle on its terms; because the EFTO won’t accept under the table payments or donate money to the Liberals; because the EFTO has some regard for its responsibility to the children and their parents; they are left with no choice.

The Wynne Liberals are determined to bring the ETFO to heel and accept their terms.

For Premier Wynne and Minster Liz Sandals to continue to inconvenience the lives of elementary pupils and parents for their party’s personal gain and to maintain power, is an unconscionable misuse of their fiduciary responsibility and public trust.

It’s time to resign, both of you, and turn out the lights when you leave.

Is the teacher union payoffs Kathleen Wynne’s “Walkerton” moment?

By Gerry Barker

Posted October 27, 2015

It is interesting to note that right here in Ontario, there are two trials going on.

One, is the drawn out trial of Senator Mike Duffy charged with 31 counts of conspiracy and bribery over his expenses as a senator. The 46-day trial was postponed until after the federal election and resumes this week.

The bribery charge against Duffy is accepting a $93,000 cheque from Nigel Wright, former chief of staff to then Prime Minister Stephen Harper. It was paid to shut down the growing scandal that threatened the Conservative government.

The prosecution is composed of lawyers employed by the Ontario government because the alleged offenses occurred in Ottawa.

In his new role of Prime Minister designate, Justin Trudeau would be wise to ask Premier Wynne to call off her legal hounds and wrap up the Duffy trial. Turn it back to the Senate for adjudication where it belonged in the first place.

The second trial is an avalanche of facts posted by the media totaling $7.1 million given to three teachers unions, the Canadian Union of Public Employees (CUPE) locals who support the education system and the school boards.

Premier Kathleen Wynne has termed the practice “normal.” Minister of Education, Liz Sandals, MPP, Guelph, and her feckless response paying union negotiation costs was “actually has nothing to do with anything.” That sounds like a line from Seinfeld, “It’s a show about nothing.”

Those Looney Tune responses besmirch the offices of both women displaying a high degree of arrogance.

So, tell me, what’s the difference between Duffy charged with getting $93,000 to pay his travel expenses, and the government paying $7.1 million to settle demands of the teachers and support unions?

It’s like 50 Shades of Grey. In this case it’s the taxpayers and democratic principles that are getting royally screwed.

When all else fails, bribe them

The Wynne government has continually bribed the unions with special payments to settle contracts. It’s a practice that started three provincial elections ago.

It was only just revealed by the Globe and Mail last week when it obtained a secret, 42-page document detailing the bribes. Bribes totaling $2.5 million, given to the Ontario Secondary Teachers Federation, ($1 million) the Ontario English Catholic Teachers Association (OECTA), ($1 million) and the French teacher union des enseignantes et des enseignantes franco-ontario (AEFO), ($500,000)

New evidence reveals that these same unions, receiving millions since 2007, have paid some $6.1 million supporting the Ontario Liberals in the last three elections.

The byzantine system of paying only the Liberal party and its candidates but it also included the teacher’s union-sponsored organization, Working Families of Ontario. It produced anti-Progressive Conservative TV ads aimed particularly at P.C. leader Tim Hudak in the 2014 provincial election.

In fact, the OSSTF largesse included giving money to three candidates in the 2013 Liberal Leadership race with $10,000 each to Kathleen Wynne and Eric Hoskins and $5,000 to Gerard Kennedy.

The teacher unions have steadfastly supported the Liberals and not the New Democrats who traditionally are supported by the labour movement.

In all these revelations, the Elementary Teachers Federation of Ontario (ETFO) has not received any negotiation funding from the government and refuses to accept it.

As a bloc, the members of the teachers unions have actively participated in political elections, supporting the Liberals but not only with money but on-the ground organizational help. With more than 100,000 members in three teacher’s unions, it presents a formidable political powerhouse.

Activist targets Guelph

For our Guelph readers, the recent claim by political activist Susan Watson about GrassRoots Guelph being a third party in last year’s civic election, pales in comparison in what the Liberal Party of Ontario has paid to education unions over the years to settle contracts.

Watson’s costly and fruitless exercise cost Guelph taxpayers $11,400. Tell us Susan, how much did your union friends contribute to the Farbridge campaign and her council supporters? Didn’t you argue that third party support in provincial and federal elections is not allowed?

The similarities still add up to bribes.

It has cost the Ontario government thousands of dollars to prosecute Mike Duffy for criminal charges.

As in the Duffy case, when do the police charge the Premier, the Minister of Education and the union leaders for conspiracy to bribe and thwart long established principles of avoiding such a serious conflict of interest?

In our opinion, there are two things that need to happen.

The first is to appoint a Royal Commission to investigate the circumstances of these millions of taxpayer dollars that have been spent both by the government and the unions for self interest. There is no separation of the source of these funds; it all came from the taxpayers.

Second, Minister Sandals should resign before she embarrasses herself any more than she already has. For her part, the Premier should apologize to the people of Ontario for being a party to these obvious illegal occurrences. That apology includes asking the legislature to approve forming a Royal Commission.

 

 

 

 

 

 

Part Two – Why it’s now necessary to put Guelph on a financial diet

By Gerry Barker

Posted October 22, 2015

Please note: Part Two of this series failed to be posted on the blog site. Parts One and Three can be read in the guelphspeaks archives.

Yesterday, we showed how the City of Guelph’s operating costs per-person are 50 % higher than its two largest neighbours, Kitchener and Cambridge.

Today we will discuss how the current city administration including staff and elected officials must take action to stop the growth of operating costs.

This year the city has budgeted $207 million in operating costs and $52 million in capital spending. As of June 30 the operating budget was $867, 200 overspent. The capital budget was $839,155 overspent. That totals $1,701,355. It is indicative of the way the city is being managed including budget forecasting.

We are beginning to see where the money goes.

Guelph, under the leadership of former mayor Karen Farbridge, was a virtual dictatorship because of the dominance and influence of the various labour unions. The financial decisions made in eight years involved a majority of council obsessed with turning the city into a world-class environmental community.

Much of it was generated by the belief of its adherents that Guelph must become a leader in imposing left-wing policies on the city at any cost and without support of the people.

What were these policies?

For starters the newly elected Farbridge council in 2007 focused on two major capital projects. The first was initiated by Coun. Leanne Piper who persuaded the council to renovate the empty 150 year-old Loretto convent on Catholic Hill and convert it to a new city museum. That project ended up costing $16 million plus being subsidized annually by taxpayers. We still don’t know the terms of the lease with the Church who owns the property or the operating costs.

The second 2007 decision was to change the $42 million contract for the new city hall and renovation of the old one. In order to meet a higher environmental standard this created more than 300 change orders, resulting in delays of completion and the premature firing of the general contractor, Urbacon Buildings Group Corp., in September 2008.

Seven years later, we now know the cost of the Urbacon firing has reached $23 million over the original $42 million contract. When the court case was decided in March 2014 in favour of Urbacon, it resulted in the Mayor being defeated plus four other councillors who either quit of were defeated last October.

These two events were the catalyst in 2007 that led to reckless spending and lack of accountability of a regime that lacked financial discipline or responsible direction.

Case in point, the city is currently without a Chief Financial Officer. In the eight-year term of the Farbridge administration there were four CFO’s plus one who was a senior financial department official. She resigned and is working for Wellington County.

So how do we reduce costs?

Mayor Cam Guthrie has experienced a rough first year in office. His attempts, along with a minority of council have been unable to inject change and financial responsibility to the city administration.

The chief reason is there are seven members of council who vote as a bloc, frustrating change and progress. They include Leanne Piper, Cathy Downer, Karl Wettstein, Mike Salisbury, June Hofland, Phil Allt and and James Gordon.

This city can no longer tolerate plus 3% property tax increases every year, or a police headquarters renovation that will end up costing an estimated $39 million, $5 million more than the original estimate. Farbridge legacy costs include an estimated $75 million spent on a waste management system that doesn’t serve an estimated 13 per cent of households and businesses; downtown residential intensification; creation of the Guelph Municipal Holding Corporation with 132 employees, that lost $2.8 million last year.

These items are only the tip of the iceberg that is about to do a Titanic number if there is no attempt to avoid a financial disaster.

The first place to start is executing a management review to reduce staff costs. This is the gtreatest expense the city faces both in the short and long term. We cannot continue using 85 per cent of the property tax revenues to pay the staff. This year the staff budget is $31,050,000. It is the greatest expense in the city budget.

It explains how the growth of the city staff and the exponential increasing costs for salaries and wages, pensions, medical and overtime impacts your property tax bill.

So, let’s get serious

Step one, shut down the Guelph Municipal Holdings (GMHI) operation. There is no direct benefit other than sending a $1.5 million dividend to the city’s general revenues despite losing $2.8 million in 2014. In the past five years $9 million has been moved over to the city as dividends from GMHI.

The source of these funds is from the GMHI-controlled Guelph Hydro. So we end up paying for it as it represents another form of taxation specific to all citizens.

There are many programs that the Farbridge Bloc of Seven on council is insistent of maintaining. In fact, Coun. Karl Wettstein insists that council must maintain the same level of services provided by the previous administration of which he was a part.

Step Two, simply, we can no longer afford spending millions on bike lanes; downtown secondary plans including reconstruction of St. George’s Square; spending millions to provide thermal-based heating and cooling to the Hanlon Business Park and Downtown: the wellness program; the transit system; offering money to home owners to upgrade their homes including windows, doors, insulation and toilets that use less water.

These programs must be severely pared back or eliminated until we can replenish the reserves that were raided to pay off the $8.9 million Urbacon settlement.

Step Three, put a hiring freeze in place. Also reduce the number of staffers by at least 5 per cent in the 2016 budget. This action can br spread through every department with the managers in charge being responsible for staff reductions.

Until these steps are taken to reduce costs, there will be no Wilson Street parking garage, no new downtown library, no South-end Recreation Centre and no revitalization of the Baker Street parking lot property.

The infrastructure of this 200 year-old city is in disrepair. Old sewers, watermains, and streets need replacing. It’s not glamourous stuff like the Waste Resource Innovation Centre on Dunlop Road that is mismanaged and operates in secret. Or the Market Square project that is the expensive centre-piece of the Farbridge legacy.

Mayor Guthrie was elected last year on the promise to keep property tax increases to the Consumer Price Index (CPI). Last year that was 2.4 %. The Farbridge Bloc however used its council muscle to shove a 3.96 % property tax increase in this year’s budget.

The only way this group can stop obstructing and start cooperating is to let them know the people want change. You can do that by sending a letter, or email to express your concern about the high cost of living in Guelph.

All it would take is just one councillor to recognize his or her responsibility to work creatively and responsibly as a group on behalf of their constituents and not on a broken idiology that has created this financial mess.

This beautiful city and its people deserve better.

Part Three of this series discusses how public money is moved around creating financial confusion and hiding excessive costs. It’s a practice known as “Fungible Finances.” It has been used extensively in the past eight years by the previous administration.

 

Ontario’s education system has been corrupted by secret payments to unions

By Gerry Barker

Posted October 26, 2015

Gradually the public is learning how Premier Kathleen Wynne and Minister of Education, Liz Sandals, MPP Guelph, have corrupted bargaining with the teacher unions. So far, as the details are leaked, the bill to taxpayers since 2008 has been $3,741 million. This information came from Sandals via email late Friday to escape coverage in the weekend media news cycle.

With this stunning admission, what did the unions do with the money? Why were these payments made by the Ministry of Education? Apparently the payoffs for showing up for bargaining were initiated in 2008 by the then Minister of Education, Kathleen Wynne.

She now says it was “normal” to make these payments. If the Premier of Ontario doesn’t know the difference between normal and bribery managing her previous portfolio as Minister of Education, she has destroyed public trust and should lool for other work.

So Liz Sandals, her pal and confidant, in charge of the education portfolio since 2013, has managed to put the Ontario education system into a constant state of turmoil, anger, uncertainty and confusion.

The trouble is that there are two Ministers of Education in Ontario. Kathleen Wynne left a potential legacy of corruption by disruption that was left to her pal Liz Sandals.

What this duo of trustees of the public purse, both former members of local school boards, has accomplished is a betrayal of the students, their parents and the taxpayers.

In polite circles, that could warrant criminal charges for bribery of public unions done in secrecy and without public recourse.

At the very least, there should be a Royal Commission investigation into the entire public education systems and the payouts to the teacher and support staff unions. This unprecedented action by the government to pay off unions to settle what occurred this fall warrants such an inquiry.

And now the Ontario Secondary School Teachers Federation (OSSTF) is threatening to start job action even after a $1 million payment to reimburse their negotiating costs to settle. It now appears that money will be paid 90 days after the settlement. This is estimated to be late in November.

Does this mean the government may renege on its promise because of the public reaction to the payoffs? Don’t hold your breath. To reinforce the political alliance with the Wynne government, union official Ann Hawkins, stated that she finds it “offensive” that people would even question the $1 million payment to her union. The money was allegedly for reimbursement of union expenses encountered in negotiating with the government.

The Ministry did not require receipts for the $1 million union costs nor were they offered. Is this the right way to manage the taxpayer’s money? Just give taxpayer money away without receipts?

But the cat was among the canaries when Minister Sandals admitted Friday that the total “bonus” payments to education-centred unions since 2008, was $3.741 million. This was money that did not trickle down to the union members but was delivered to the union management.

A more interesting element is the timing of the Globe and Mail report revealing the union payments. It was first published in the Wednesday editions of the paper, two days after the federal election won handily by the Liberals.

Is it possible this was a case of protecting the Wynne-Trudeau alliance prior to the election?

Well it certainly worked for Mr. Trudeau, not so much for Kathleen Wynne and her fiends in the teacher and support unions.

With more than 200,000 unionized teachers and support staff workers in Ontario, it provides a solid bloc supporting the Liberals in elections. At least former Liberal premier, Dalton McGuinty, took steps to curtail the rapid rising costs of the education portfolio. It cost him his job. Wynne and her sidekick, Liz Sandals, took over and rolled back the McGuinty initiatives to curtail education spending, mostly to the union members.

The glaring example of this was the spending in 2013 by the Minister of Education, Liz Sandals, of $464 million to placate the unions who were working to rule and causing turmoil among students and parents alike.

When announcing settlement with three teacher unions last August, Sandals said the 2.5 per cent salary increases would not impact the costs of education because it was a net zero increase. This means that the money was taken from another program to pay the teachers. That program was a $20 million fund to assist struggling high school students to graduate. Under Sandals watch, the government halted annual funding for this program three years ago.

So a student program was used to pay the teachers’ union bosses. Who knew? Certainly not the students, the parents or the taxpayers.

Gerry Barker is a retired newspaper executive who lives in Guelph. His blog, guelphspeaks.ca, comments on municipal, provincial and national affairs. He may be reached at gerrybarker76@gmail.com.

 

 

 

 

Sandals admits the Liberals have been bribing teacher unions since 2003

By Gerry Barker

Posted October 23, 2015

The second day of the teacher union payoffs has escalated to $2.5 million paid to three teacher unions to settle contracts. Wednesday this week, a 42-page secret document detailing the payout to the Ontario Secondary School Teachers Federation (OSSTF), was obtained by the Globe and Mail.

The Minister of Education, Liz Sandals, MPP Guelph, admitted during Question Period in the Ontario Legislature on Wednesday that this year, three teacher unions were paid bonuses, bribes or adjustment because the period of negotiations was lengthy and costly to the unions.

The Minister admitted yesterday that the unions did not submit any receipts or records of the money they spent in the lengthy negotiation time to justify the $1 million payouts to cover their costs.

It brings back memories of the Calgary consultants hired to the E-Health project who charged $25 for afternoon tea while in Toronto plus frequent first class flights between Calgary and Toronto.

The Minister said the union payments were made because the government changed the bargaining system and the process of adapting to the new system was costly to the unions.

Now it appears the taxpayers are paying the money thanks to the decision by the Minister of Education who had to sign off the payments.

But one teacher’s union, the Elementary Teachers Federation of Ontario (ETFO), is still trying to settle a new contract after more than a year of negotiating and have not been offered any payment for extended negotiation costs.

Furthermore, they will refuse any offer to reimburse the union for “negotiation costs,” according to ETFO president Sam Hammond.

This leaves the spectre of the entire unionized public sector workers possibly expecting the same million dollar cheque book treatment in the future when they negotiate new contracts.

Ms. Sandals, while admitting the practice of bogus payments for signing has been going since the Liberals took power in 2003, refused to say how much public money has been spent to settle contract negotiations.

The Minister denied that the payments were a bribe to settle the teacher negotiations. Often perception of a situation is more truthful than the line the Ontario Liberals are spinning, Once again they attempt to extricate themselves from acute embarrassment.

Liz Sandals is way out of her depth as Minister of Education. Since her appointment in 2013 by her pal Kathleen Wynne, there has been ongoing turmoil among members of the various teacher and allied unions. Strikes, semi-strikes, working to rule have been the rule.

Ms. Sandals would have us believe that everything is under control except it was the government that radically changed the Teacher and School Board bargaining system that caused the marathon negotiating periods.

Why did they subsidize the unions using public money? The unions all have thousands of members who pay dues for the very purpose of negotiating new contracts.

This secret, barefaced bribe was leaked obviously by someone inside the Ministry who was as disgusted by the payouts as the general public, once the details were discovered.

Don’t expect Sandals to be replaced as Minister because Premier Kathleen Wynne lacks a conscience and besides, she needs Sandals to take the hits over the bumbling education system that is in constant disarray.

And the premior should know more about this than she is letting on.

She was Minister of Education before Liz Sandals took the job.

 

 

 

 

Part Three -We’re stuck with Farbridge’s Fungible Financial Folly

By Gerry Barker

Posted October 23, 2015

Yesterday, we addressed the need for the city to be put on a financial diet. Here is one of the chief reasons our finances are in such a mess, it’s called fungibile financing.

At the outset we should give you the dictionary definition of the word “fungible.”

According to Mr. Webster, it is an adjective meaning: “Any unit or part of which can replace another unit, as in discharging a debt, capable of being used in place of another.”

Translated it means that after a budget is created by a municipality or any organization, the moving around of money is counter-productive to basic accounting principles.. If a department has an overrun on one project, it is fungible to move money from a reserve or another less important project in the budget. Starting to sound like it’s a method to discharge an internal debt?

It happens all the time in many organizations around the globe. The difference in Guelph is that the public does not know how their money is being moved around in a budget. The city administration has fungible-ized the practice to perfection.

It has been going on in the city of Guelph for more than eight years. The prevailing attitude is what the people don’t know won’t hurt them.

It’s a lullaby for financial disaster

Just look what happened when the city embarked on a foolish exercise to fire the new city hall general contractor. It took seven years of negotiations, mediation and finally, a $19 million wrongful dismissal lawsuit brought by the contractor, Urbacon Building Group.

The city was found to have wrongfully dismissed Urbacon in 2008 and, being that it was a civic election year, the matter was quickly negotiated to cost $8.9 million.

In a second trial shortly following the lawsuit loss, the city attempted to stall the costs portion of the wrongful dismissal trial until after the October 27 civic election. The judge asked the city why they did not settle the lawsuit. The city lawyer replied that because they thought they would win. Just that simple yet arrogant reply was a telling attitude that cost the citizens some $2.3 million in legal costs.

Another fungible exercise was the renovation of the downtown Farmer’s market. City staff told council the cost would be $170,000. Later, it revealed it cost more than $350,000. But not to worry said the staff at the time, we’ll take the overrun money from the new humidifier to be installed in the West Recreation Centre pool area. That’s fungible and stupid because forecasting budget is not a skill set used by many on city staff.

For Finance chairperson Coun. June Hofland, it seemed like a good idea at the time.

So, the Chief Administrative Officer, Ann Pappert, states that the $8.9 million Urbacon settlement will not affect property taxes. They took the money from three unrelated reserve funds to pay off Urbacon. Then they announced that those funds would be replenished by budgeting $900,000 a year for five years.

On the eve approving the 2015 budget, Coun. Karl Wettstein moves that the city spend only $500,000 instead of the previously announced $900,000. and the Farbridge Bloc of Seven agreed. Wettstein added that the staff should come up with an alternative reserve replenishment plan for the 2016 budget. Now engaged in 2016 budget planning, it will be interesting just what the staff will propose to replenish the reserve funds.

Where is our Chief Financial Officer when we need one?

One of the reasons that this practice continues is the absence of a Chief Financial Officer (CFO). We’ve had five in eight years and they’re all gone. Without a trained and experienced CFO, the stage is set for manipulation of finances. And that’s exactly what has happened. Oh, attempts have been made to put the city finances in order by the parade of CFO’s to no avail. One only lasted one week on the job. That’s probably how long it took him to see what was going on. And fungible manipulation of money was happening at the public expense.

Now here is a perfect example of fungible financing. Coun. Mike Salibury, speaking to the 2015 council budget meeting, suggested that instead of spending $300,000 in creating bike lanes on Woodlawn Avenue, increase it to $600,000.

And where did the extra $300,000 come from? He said it was included in the 2014 budget but was not spent.

This is just another example of fungible stupidity. The Municipal Act requires all municipalities to close their books by December 31 and balance them. If Salibury and the rest of that bloc don’t understand that, then they shouldn’t be on council.

This attempt to spend money, that was not part of the current year budget, is the direct result of not adopting zero based budgeting. That means that each year stands alone and unspent money from the previous year’s budget cannot be used.

This practice has been going on for several years. In 2012, GrassRoots Guelph presented documented figures, showing that the annual closing of the books revealed the final balanced accounts. But then a different figure, usually showing a surplus, popped up in the next year’s budget.

Most people were not informed of these differences because the 400-plus page Financial Information Report, filed by the city to the province, was not available to the general public except by request. Few bothered.

This was pure manipulation of the city finances by the city staff, with the complicity of the council.

It is a practice that must stop

 Yet, earlier this summer, the President of the Guelph Chamber of Commerce, Keitho Mwanza, asked the city to adopt a budget system that had a true zero starting point. He did not use the expression “zero based budgeting” but that’s what he meant.

What followed was an hour and a half debate by council that resulted in no changes in the way the budget was prepared. There were three votes to accept the zero based system and all were defeated by the Farbridge Bloc of Seven.

In other words, continue the fungible ways of running the city. Increasing costs annually; hiring more staff; paying higher salaries, wages and benefits, is making Guelph staff one of the highest paid in the country of a city of similar population.

If Kitchener and Cambridge can maintain lower per-person costs, why can’t Guelph?

Note: If you missed the first two parts of this series, check our the guelphspeaks archives.

 

Part Two – Why it’s now necessary to put Guelph on a financial diet

By Gerry Barker

Posted October 22, 2015

Yesterday, we showed how the City of Guelph’s operating costs per-person are 50 % higher than its two largest neighbours, Kitchener and Cambridge.

Today we will discuss how the current city administration including staff and elected officials must take action to stop the growth of operating costs.

This year the city has budgeted $207 million in operating costs and $52 million in capital spending. As of June 30 the operating budget was $867, 200 overspent. The capital budget was $839,155 overspent. That totals $1,701,355. It is indicative of the way the city is being managed including its budget forecasting.

We are beginning to see where the money goes.

Guelph, under the leadership of former mayor Karen Farbridge, was a virtual dictatorship because of the dominance of a majority of councillors who supported the mayor’s agenda. Also there was the influence of the various labour unions employed by the city. The financial decisions made in eight years involved a majority of council obsessed with turning the city into a world-class environmental community.

Much of it was generated by the belief of its adherents that Guelph must become a leader in imposing left-wing policies on the city at any cost and without support of the people.

What were these policies?

For starters the newly elected Farbridge council in 2007 focused on two major capital projects. The first was initiated by Coun. Leanne Piper who persuaded the council to renovate the empty 150 year-old Loretto convent on Catholic Hill and convert it to a new city museum. That project ended up costing $16 million plus being subsidized annually by taxpayers. We still don’t know the terms of the lease with the Church who owns the property or the operating costs.

The second 2007 decision was to change the $42 million contract for the new city hall and renovation of the old one. In order to meet a higher environmental standard this created more than 300 change orders, resulting in delays of completion and the premature firing of the general contractor, Urbacon Buildings Group Corp., in September 2008.

Seven years later, we now know the cost of the Urbacon firing has reached $23 million over the original $42 million contract. When the court case was decided in March 2014 in favour of Urbacon, it resulted in the Mayor being defeated plus four other councillors who either quit of were defeated last October.

These two events were the catylist in 2007 that led to reckless spending and lack of accountability of a regime that lacked financial discipline or responsible direction.

Case in point, the city is currently without a Chief Financial Officer. In the eight-year term of the Farbridge administration there were four CFO’s plus one who was a senior financial department official. She resigned and is working for Wellington County.

So how do we reduce costs?

Mayor Cam Guthrie has experienced a rough first year in office. His attempts, along with a minority of council have been unable to inject change and financial responsibility to the city administration.

The chief reason is there are seven members of council who vote as a bloc, frustrating change and progress. They include Leanne Piper, Cathy Downer, Karl Wettstein, Mike Salisbury, June Hofland, Phil Allt and and James Gordon.

This city can no longer tolerate plus 3 % property tax increases every year, or a police headquarters renovation that will end up costing an estimated $39 million, $5 million more than the original estimate. Farbridge legacy costs include an estimated $75 million spent on a waste management system that doesn’t serve an estimated 13 per cent of households and businesses; downtown residential intensification; creation of the Guelph Municipal Holding Corporation with 132 employees, that lost $2.8 million last year.

These items are only the tip of the iceberg that is about to do a Titanic number if there is no attempt to avoid a financial disaster.

The first place to start is executing a management review to reduce staff costs. This is the gtreatest expense the city faces both in the short and long term. We cannot continue using 85 per cent of the property tax revenues to pay the staff. This year the staff budget is $31,050,000. It is the greatest expense in the city budget.

It explains how the growth of the city staff and the exponential increasing costs for salaries and wages, pensions, medical and overtime impacts your property tax bill.

So, let’s get serious

Step one, shut down the Guelph Municipal Holdings (GMHI) operation. There is no direct benefit other than sending a $1.5 million dividend to the city’s general revenues despite losing $2.8 million in 2014. In the past five years $9 million has been moved over to the city as dividends from GMHI.

The source of these funds is from the GMHI-controlled Guelph Hydro. So we end up paying for it as it represents another form of taxation specific to all citizens.

There are many programs that the Farbridge Bloc of Seven on council is insistent of maintaining. In fact, Coun. Karl Wettstein insists that council must maintain the same level of services provided by the previous administration of which he was a part.

Step Two, simply, we can no longer afford spending millions on bike lanes; downtown secondary plans including reconstruction of St. George’s Square; spending millions to provide thermal-based heating and cooling to the Hanlon Business Park and Downtown: the wellness program; the transit system; offering money to home owners to upgrade their homes including windows, doors, insulation and toilets that use less water.

These programs must be severly pared back or eliminated until we can replenish the reserves that were raided to pay off the $8.9 milliom Urbacon settlement.

Step Three, put a hiring freeze in place. Also reduce the number of staffers by at least 5 per cent in the 2016 budget. This action can br spread through every department with the managers in charge being responsible for staff reductions.

Until these steps are taken to reduce costs, there will be no Wilson Street parking garage, no new downtown library, no South-end Recreation Centre and no revitalization of the Baker Street parking lot property.

The infrastructure of this 200 year-old city is in disrepair. Old sewers, watermains, and streets need replacing. It’s not glamourous stuff like the Waste Resource Innovation Centre on Dunlop Road that is mismanaged and operates in secret. Or the Market Square project that is the expensive centre-piece of the Farbridge legacy.

Mayor Guthrie was elected last year on the promise to keep property tax increases to the Consumer Price Index (CPI). Last year that was 2.4 %. The Farbridge Bloc however used its council muscle to shove a 3.96 % property tax increase in this year’s budget.

The only way this group can stop obstructing and start cooperating is to let them know the people want change. You can do that by sending a letter, or email to express your concern about the high cost of living in Guelph.

All it would take is just one councillor to recognize his or her responsibility to work creatively and responsibly as a group on behalf of their constituents and not on a broken idiology that has created this financial mess.

This beautiful city and its people deserve better.

Tomorrow, October 23, Part Three of this series discusses how public money is shifted around behind closed door creating financial confusion and hiding excessive costs. It’s a practice known as “Fungible Finances.” It has been used extensively in the past eight years by the previous administration.

 

Last August the Wynne Liberals bribed the High School teachers with $1 million to settle a contract

By Gerry Barker

Posted October 21, 2015

The Globe and Mail published details of a 42 page secret document that outlined how after a year of negotiating, the Ontario Secondary School Teachers Federation (OSSTF) received this unprecedented payout.

The document revealed the $1 million bribe was given to compensate the union for the costs of negotiating. It stated that a new provincial bargaining system caused the yearlong negotiations to drag on.

I’m not making this up.

This payment, which can only be described as bribe to settle a contract, is unprecedented and morally wrong. It was a desperation move by the provincial negotiators to avoid a continuation of the OSSTF strike actions last spring in Durham, Sudbury and Peel regions.

You will recall this summer the Premier stated there was no money for the teachers who were all without contracts. They included the OSSTF, the Elementary Teachers federation of Ontario, the Catholic High School and Elementary Teachers and the French teachers unions. Collectively, the province was facing a province-wide work stoppage by the teacher’s unions before schools re-opened after Labour Day.

The government’s excuse for the bribe lay in a new system of bargaining that, the report suggests, befuddled and prolonged negotiations with the various unions.

The fact is that the Minister of Education, Liz Sandals, reached a settlement and was party to a deal that involved five various teacher’s unions. They received a 2.5 per cent pay increases plus other benefit improvements including a change in withdrawing banked sick leave funds.

She did this despite her leader saying there was no money to pay increases to the teachers.

Instead, Minister Sandals, in announcing the pay increases, used the term “net zero” meaning that the impact of the pay and benefit increases will be recovered from other programs. So far, so good.

But the secret document revealed the “net zero” money would come from a secondary program enhancement fund. It is assumed that this allocated $20 million fund seized from the program is to help students experiencing difficulty in high school and assist them to graduate.

It is also safe to assume that both the government negotiators and the OSSTF bargaining team agreed that it was okay to take the money from a student program in order to pay the teachers’ new contract increases.

This is a classic example of moral turpitude and excessive misappropriation of public funds by the Ontario government.

The cozy relationship between the 60,000 OSSTF members, and the Ontario Liberal party is dependent on the union members carrying out the Liberals political agenda, is appalling.

To add outrage to this powder keg of resentment are the other unions that also settled along the same terms as the OSSTF, except they didn’t receive the $1 million bribe. Except one, the Elementary Teachers Federation of Ontario, who almost two months into the school year, have no settlement in sight.

Maybe The Minister should offer them $1 million to offset those pesky negotiating costs like the bribe money the OSSTF received.

The problem now for the government is how do you explain this $1 million OSSTF bribe to the other unions that did settle without receiving that juicy bonus?

It would seem that the government, in this case the Minister of Education, has been painted into a corner. For Premier Kathleen Wynne and Minister Liz Sandals, paying off the teachers to achieve settlement is nothing new. In 2013, they restored the Dalton McGuinty teacher union contract rollbacks at a cost of $460 million.

Is there no shame in this?

They have destroyed any trust or goodwill of the other teacher unions with this asinine bribe that has oozed out of the secret vaults of the Ontario government.

Between Liz Sandals and Kathleen Wynne, they have now set the course for long-term distrust and disruption of the vital roles that our teachers play in the growth and vitalization of our Province and our children.

Do the right thing, both of you, resign.

 

Part One – Farbridge’s legacy leaves Guelph with 50% higher per-person costs than Kitchener and Cambridge

By Gerry Barker

 Posted October 21, 2015

As the chart below clearly demonstrates it is time for the city to support the Mayor who was elected by the people on the platform of tax increases not higher than the Consumer Price Increase (CPI) that was 2.4 per cent in 2014. The analysis below suggests that this should be attainable.

For the past eight years of the Farbridge administration, the financial management was an ongoing disaster, new comparative analysis of Guelph’s costs to similar-sized cities makes the case.

Those cities included in the analysis are: Kitchener, Cambridge, Waterloo, Waterloo Region, Milton, Oakville and Burlington, among others.

The analysis broke down two units of each budget: Capital (in millions) and Operating (in millions). The per-person costs comparison was based on the 2011 census population of each city. Comparing Guelph’s finances to other municipalities is summarized in the Variance. Parenthesis ( ) indicates lower costs for those municipalities as opposed to Guelph.

 

City	Capital	Operating	Total	$ Variance	% Variance
M= Million
Guelph – pop 121,628	$88M	$382M	$470M
Cost per person	$723	$3,136	$3,859
Kitchener – pop 219,153	$105M	$129M	$234M
Cost per person	$479	$589	$1,068
Region of Waterloo – pop 504,096 cost per person	$171M	$1,349M	$1,520M
Total cost			$2,588	($1,271)	(49%)
Cambridge pop 123,748	$13M	$112M	$124M
Cost per person	$102	$903	$1,005
Region of Waterloo – pop 504,096 cost per person	$171	$1,349	$1,520
Total cost per person in Cambridge including Region allocation	$273	$2,253	$2,525	($1,334)	(53%)

Please note that some of the numbers in the chart may not add through due to rounding.

You have to ask yourself, why are Guelph’s per-person costs compared to Kitchener and Cambridge so much higher? The plain answer is Guelph’s costs are too high. Can it be that the value of providing services in Guelph is greater than the two cities nearby? Because Kitchener and Cambridge are part of the Region of Waterloo, we have added those costs together so that the comparison is fair and equal. It is an accurate analysis as prepared by a professional accountant from official published financial reports showing per-person costs are 50% higher in Guelph.

These are only three municipalities out of the 18 analyzed whose 2015 budget costs were lower than Guelph’s with three exceptions, Milton 4%,  Oakville 11%, and the City of Waterloo 3% costs were higher than Guelph on a per-person basis.

It is now critically apparent that Guelph’s budget is far out of line with 15 other municipalities ranging from Vancouver to Peterborough.

Just comparing Guelph’s per person costs with Vancouver, the B.C. city of 603,500 population and one of the highest costs of living in the country, had a 52% lower per person capital and operating cost for 2015.

In fact, regardless of the population, Guelph’s 2016 budget must be drastically reduced or the city will become too expensive in which to live. One of the root causes lies in the Farbridge-induced services that affect a minority of citizens such as the cost of building bicycle lanes on arterial roads.

The responsibility for this financial mismanagement rests squarely with the former Farbridge administration. And these figures fail to include the loss of millions in failed policies and projects in the past eight years.

The Farbridge gang of seven obstructs change in city management

Guelph Mayor Cam Guthrie inherited this financial mess and is fighting a majority of Farbridge councillors in order to make the city more responsible in its management. Years of excessive spending, nepotism in hiring staff, has resulted in the huge operational costs of the city, more than surrounding peer municipalities.

The mayor and his supporters recognize the need to bring about the changes that people voted for last October. But they need the help of those people who overwhelmingly voted for change.

Even in defeat, the former mayor said her policies continue due to the majority of her supports elected to Council. This group includes councillors James Gordon, Phil Allt, Cathy Downer, Mike Salisbury, Leanne Piper, Karl Wettstein and June Hofland.

Ms. Hofland was elected by a margin of only five votes, and was appointed Chairman of Finance by her Farbridge cohorts. It is unknown if Ms. Hofland has any professional designation to qualify her for such an important committee chairmanship. She is a perfect fit for the Farbridge gang of seven because she does what she’s told.

Most of the property tax revenue goes to pay city staffs

Some 85% of property tax revenue is spent on the city staff; there are more than 2,000 Full-Time Equivalent, (FTE) employees. The figure includes full-time and part-time employees whose numbers and wages are adjusted to make up full-time status. The Human Resources report for 2014 is published in the spring of each year. In 2014, there were 268 earning more than $100,000. Another 21 employees were approved in the 2015 budget including some senior personnel.

The long term effect of lifetime benefits guaranteed to the municipal employees, past, present and future, has been recognized by many jurisdictions that have taken action to contain staff costs.

Compounding the problem is the growth of salaries, wages and benefits in Guelph.

The growth of the city staff plus the generous settlements with an estimated 80% of its unionized employees, has put city finances in a rising precarious financial trajectory to failure. Council can no longer close a blind eye to this growing problem by throwing more tax money to meet the costs of Farbridge policies in the hope it will go away.

The problem lies in the lack of financial training and management skills of theFarbridge gang of seven dominating council. And the ward three electors, by a margin of five votes, chose Coun. June Hofland who returned as chair the Finance Committee of a $500 million corporation.

This year, property taxes went up 3.96%, highest among peer municipalities in the area. If the 2016 budget includes another three or four per cent increase, property values will start going down and there will be an exodus, as people can no longer afford to live here.

It will occur slowly but it will happen if costs are not contained. Council’s course of action is to suspend all capital spending in 2016 with the exception of repairing the aging infrastructure. It needs a staff reduction. Also institute a wage freeze for the next two years. This one is complicated because of the unionized staff contracts.

This is a legacy of financial mismanagement that will take years to unwind and set the stage for hardship among many citizens unless costs are reduced.

It is now time for some serious discussion and political will on the part of all members of council.

The city property taxes ATM machine is now empty.

Editor’s note: I would like to thank Pat Fung, CPA, for researching and assisting in preparing this post. As usual your questions and comments are most welcome. Gerry Barker.

 Tomorrow, Part Two – Why it’s time to put Guelph on a financial diet