Truth and consequences: No one won casting this year’s city budget

By Gerry Barker

Posted December 11, 2015

My palms get damp when I hear Deputy Chief Administration Officer (DCAO) Mark Amorosi alleging that the city staff costs have been dropping for the past five years. Amorosi is the man in charge of all city finances, so one would assume that he knows what he is talking about, right?

Well, here are the staff’s cost numbers as taken from the city’s own audit reports for seven years from 2008 to 2014, and rounded:

Year            Total salaries and benefits            Prior year increase

2008                        $124,900,000

2009                        $139,400,000                        11.6 per cent

2010                        $143,600,000                        3.0 per cent

2011                        $155,200,000                          8.1 per cent

2012                        $163,600,000                        5.4 per cent

2013                        $174,500,000                        6.7 per cent

2014                        $190,500,000                        9.2 per cent

Mr. Amorosi’s statement seems awkward and incorrect when the city staff employment costs have increased by 52.5 per cent or $65,600,000 in just seven years.

Those are the years beginning with his hiring in 2008 as head of human resources for the city. His rise through the ranks is remarkable considering he has an HR background not the financial experience required of a Chief Financial Officer. But Guelph does not have a CFO. What we have is an HR guy running the financial department of a $500,000,000 Corporation.

Amorosi reports to CAO Ann Pappert who spoke glowingly Thursday night on how hard the staff worked to prepare the budget and how lean the organization is today with each department cutting expenses.

Here is what the city’s audited statements state in the same seven-year period starting in 2008:

Total expenses in 2008 = $281,000,000. Total expenses in 2014 = $374,800,000

That’s an increase of $93,800,000 or an average of $13,400,000 per year.

The critical part of this exercise is that total expenses increased by 52.5 per cent over the seven-year period while salaries, wages and benefits grew by 33.4 per cent.

That increase of 33.4 per cent occurred during that same period the Consumer Price Index increased by 9.7 per cent. That is a 23.7 per cent difference between the actual costs to citizens living in Guelph. Do you still wonder why Guelph is one of the most expensive cities in which to live in Canada?

Consider the increase in population of the city during that same period. All these data are based on the 2011 census of 121,888. At that time, Guelph’s population had grown by 5.1 per cent in the previous four years. As next year is a census year, we will have a clearer picture of our population numbers.

Ms. Pappert is at the top of the city staff organization chart, earning a salary of $230,000. Yet neither of these two key executives dared to explain the current negative 2015 budget variance of $1,300,000. They admitted that in each of the past three years the city budgets had been overspent.

This would indicate a faulty forecasting of expenses, fixed and variable. It becomes apparent when Coun. Mike Salisbury said that budgeted funds not used in the current budget might be used in the following budget. “It’s a no-brainer,” he exclaimed. Funds not spent in the calendar year disappear, not to be transferred for projects the following year. Otherwise, why bother to create a budget at all? That friends is voodoo financial advice and has been going on for a long time in Guelph.

Neither Ms. Pappert nor Mr. Amorosi said a word about replenishing the raided reserves used to pay the $8.96 million to settle the Urbacon Buildings Group Corp lawsuit last year. The BMA Management consultants, hired by the city, reported that the reserve funds are seriously underfunded. The expression they used was: “Cautionary Red Flag.”

If you distort the zooming cost of staff and operations and ignore the warnings of your own consultants hired to oversee operations, then it strains one’s credulity in believing the city is being managed responsibly.

In fact it isn’t and the data contained in the city’s books demonstrates this.

When Guelph resident and Chartered Accountant, Pat Fung, presented a detailed comparison of operational costs between Guelph, Cambridge and Kitchener during the public meeting on the 2016 budget, there was no response from the council or staff.

In response, Amorosi said the per capita costs in the analysis “ were irrelevant.”

That comparison showed the operational costs in Kitchener were 50 per cent less than Guelph and Cambridge was 49 per cent lower. The analysis was derived from the audited statements of all three cities.

When the council majority rejected the 3.42 per cent property tax levy increase on Wednesday night, they participated in an exercise to reduce the increase on Thursday night to 2.99 per cent.

They left little on the table to reduce the increase but voted to add items that had already been rejected the previous night. They used their 7-6 majority to dump the Guelph Transit fare increases proposed by staff and added jobs that were previously scrapped.

This majority group, who most often vote as a bloc, seemed not to care about Guelph’s high operating costs and the impact on property taxes.

If the city administration continues to increase spending, staff, taxes and user fees it will reach a critical mass of financial collapse. If they don’t pay attention to the rate of growth of the numbers, then the city will have to make major cuts in staff and services that this majority group keeps feeding to favoured groups and political allies.

An example that was recommended by staff, included paying a supporter of the previous mayor some $264,000 to extend a one-year assignment into three years. His assignment is to manage the Open Government Action Plan. This was a contract job that now could become a staff job with all the perks and privileges.

It survived the budget process and is an example of favouritism that doesn’t belong in any workplace. If it had been dropped, the increase in the property tax levy would have been reduced across the board.

We’re talking about thousands of taxpayer dollars here but the senior staff is deaf when it  comes  to reducing costs.

 

 

 

 

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3 Comments

Filed under Between the Lines

3 responses to “Truth and consequences: No one won casting this year’s city budget

  1. Joe Black

    Outright fraud

  2. bostoncollie

    But Karl Wettstein says that City Hall is already a lean operation!

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