By Gerry Barker
Posted December 6, 2015
* Some 2016 budget questions that need action and answers
With only three days left, the council will decide the final 2016 city budget Wednesday night. Here are some questions and issues that will be discussed.
ITEM: The proposed staff cuts to Guelph Transit services and increase in fares
To an outsider, that’s most of us, there is a serious management and union staff problem. The union is adamantly against any cuts or increased fares. Their spokesman, American Transit Union’s (ATU) president, spoke at length about how the system should be changed.
The Questions: Has he exchanged the union’s point of view with management?
Has the management/labour partnership crumbled as the union attempts to run the system for its own self-serving reasons?
Has the absence of common sense dialogue evaporated at the expense of the users? Why did the city senior staff not consult with both sides before proposing the cuts and fare increases in the staff recommendation to council?
This strategy has backfired big time and the result is an ever-widening gap between the union and management.
The responsibility lies with senior city management
The outcome? Bet the transit cuts and fare increases will not be approved for the 2016. This will boost the property tax rate on this one line item.
ITEM: How does the staff propose to replenish the $8.96 million Urbacon settlement charges it took from three unrelated reserve funds?
This is an important consideration that any management would maintain as a priority, before announcing it wants to hire an additional 12 full-time equivalent employees in 2016
When the General Manager of finance and city Treasurer attests that the city system is running lean as possible, it implies that she hasn’t been around long enough to understand the unparalleled growth of staff in the past eight years. Of all people, she should be alarmed at the cost of staff that is 80 per cent of the property tax levy and is the largest single source of city revenues.
The staff prepared two proposals to council. The first estimated an increase of 1.58 per cent in property taxes. The second, titled appropriately “expansions” included some of the following:
Corporate services, $450,000 for service rationalization; Information and Access coordinator, $86,800; GIS program manager, $127,600; Gasoline Tax realignment, $500,000; Manager of Corporate Assets, $157,400; Analyst Asset Management, $120,000.
Why do we need more staff?
Senior staff has offered no public explanation why these staff increases and projects are needed. It remains a continuation of the Farbridge administration’s ability to do what and when they wanted and without public input. Although council did get an earful from the protesting Transit workers at the recent public budget meeting.
Both the BMA report commissioned by council and the financial analysis done by Guelph citizen, Mr. Pat Fung, CA, CPA, chiefly agree that Guelph’s operating costs are 50 per cent greater than either Cambridge or Kitchener.
Why doesn’t the staff recognize this? With the base proposal of 1.58 per cent, plus the killing of the transit proposal with an impact of .72 per cent, it boosts the tax increase to 2.3 per cent. Then add in the expansion proposals costing 1.25 per cent and the property tax increase is, Tah Dah! 3.55 per cent. Does that have a familiar ring to it? That’s the same rate increase, as 2015.
Adding the two budgets approved this year, council’s first year in office, is it possible that the new council will vote to approve a total property tax increase of 7.10 per cent?
The FMA report specifically spelled out that the reserves were seriously underfunded describing the situation as a “cautionary red flag.” Does the senior staff not listen to what its own consultant is saying?
This serious financial problem does not need further explanation. Staff and Council need to put this city budget on a strict diet to equalize operation and capital costs in line with Cambridge and Kitchener. The days of complaining that those two cities are part of a regional government and therefore have lower operating costs, are over. It’s a two-tier system in which taxpayers pay city operating costs plus their share of regional costs. Mr. Fung incorporated the two tax levels in his analysis.
In Guelph’s case, the time has arrived to start the financial cleanup of the grandfathered high costs created by the previous administration.Start by cutting operating costs with this budget.