By Gerry Barker
September 9, 2016
Despite rejection by the people she disrespected for eight years, the former mayor’’s influence remains intact.
After almost 22 months of a new council, the administration of the former mayor has created a debt load that will take years to reduce, if ever.
The real debt of the city lays in the deals the Farbridge administration approved, binding Guelph to off-the-books debt that must be repaid or written off.
Examples include giving the Tricar condo projects a ten-year, complex benefits that defy interpreation as inducement to build condos in the downtown area. The fallout of this is the administration then induced Tricar to participate in the Farbridge dream of co-generation of power and hot and cold running water to their buildings.
How smart was that?
Now Tricar is stuck with a co-generation project that faces immanent collapse. Yes, they agreed to hook up to the District Energy Node in the Sleeman Centre to supply their condos with hot and cold water. But the project, according to Pankaj Sardana, the CEO of the project, is crushed by a bad business plan (a Farbridge historical failing) and should never have been started in the first place.
Taxpayers meanwhile, are stuck with bills totaling $37.1 million plus a $68.3 million impaired asset on the city books that is rapidly becoming a debit due to the failure of the former mayor’s co-generation dream. Add to that, in order to keep the Farbridge Community Energy Initiative (CEI) alive, Mr. Sardana and the Deloitte consultants are stating it will take another $60 million to make the cco-generation, District Energy system work.
Now enter the present city council dominated by the leftist Bloc of Seven. They voted as a bloc to continue to support the District Energy system until the first quarter of 2017. They did say there was to be no further investment until the project is reviewed,
The Bloc of Seven drop-kicks the District Energy debacle to 2018
That decision was another example of this group to drop kick contentious projects into the 2018 budget year to avoid including it in the 2017 budget. It’s off the table for a year thanks to this vote.
Here’s another debt of the Farbridge long-range commitment club. Remember that last minute decision in August 2014 to approve spending $34 million on the proposed Guelph Police Headquarters renovation? The Guelph Police Services Board (GPSB) in January, asked for $13 million. The added $21 million dollar upgrade went through council within days of the lock-down of approving capital projects before a civic election.
Here’s how the pro-Farbridge council at the time financed that project. A Police reserve fund provided $3 million, some $14.8 million is to be collected from future development fees and $16.3 is supplied by going into more debt. So the Farbridge administration mortgaged the police project by using the shaky collateral of fees yet to be collected from unknown future development to cover the cost. But for how long?
It was a compromise made by the devil, the devil you say! Yes we now know why CFO at the time Al Horsman, left Finance for the tranquillity of Waste Management and Environment Services in the November senior management realignment. He left the city last August for greener pastures in Sault Ste. Marie.
This is only one example of how the Farbridge administration and to a lesser extent the Guthrie term, has pledged taxpayer money to pay for projects over the distant future.
The net effect of this financial baggage is to bind future councils to set aside direct or indirect funding of past projects before taking care of the needs of the people they serve.
This is exactly what is happening in Ontario where successive Liberal governments have dumped a debt load of billions onto taxpayers. It is disaster ranking up there with the sinking of the Titanic. The people of Ontario face an almost insurmountable recovery under the leadership of Premier Kathleen Wynne. Her personal approval rating has now dropped to 24 per cent.
It’s amateur night at 1 Carden Street
City council and its senior staff, uses kitchen table financing by taking from one (reserve) account to pay for the overspending of its own budget each year since 2011. These are known as negative variances.
In 2010 the city had $77 million in 97 reserve funds. Today, there are 26 reserve funds with an estimated value of $10 million. The reserves have been tapped out, in order to balance the books as required by provincial law. Because of the excessive spending, led by the Urbacon lawsuit cost the city more than $65 million. The reserves have not been replenished despite the high property tax and user fee increases during the Farbridge years.
This is another legacy left by the former mayor. She not only emptied the reserves’ pot but forced long-term debt of an estimated $250 million onto the shoulders of those who are responsible for paying the bills. That group of stakeholders includes past, present and future residents.
Then consider the new nine-year capital budget, starting this budget year that already is underfunded, according to staff, by $170 million. That means there is no possible way that there will be a new downtown library or south end recreation centre in the foreseeable future. There just isn’t the money or method to finance each of those long-promised projects estimated to cost $105 million at today’s prices.
Ms. Farbridge and her elected progressive supporters have made sure of that.
No amount of new development can possibly repair this egregious abuse of the public purse. Likewise, property taxes already among the highest in the province, cannot meet the demands of needed capital prjects that serve the people. Too much has already been wasted on esoteric environmental projects such as road dieting, bicycle lanes and waste collection. Oh! I almost forgot, climate change. The dominating progressives have pursued their own personal agendas for nine years and have turned our city into one of the most expensive municipalities in Ontario in which to live.
On a personal note, our two-month hydro and water charges topped out in August 2014 at around $620 for two months. Today, hydro is billing monthly along with water charges. Comparing the equivalent period of two drought-affected months in 2016, the billing is $752 or an increase of $132. Same house, same two occupants and we are paying a 21.29 per cent increase.
Blame the Wynne government for our soaring Hydro rates
This is a trend that began five years ago in which the cost of electricity has risen 42.5 per cent. Starting in January, the Wynne government will be adding a carbon tax to hydro customer’s bills. Adding insult to injury, we will also be charged HST on the new tax.
So when the Ontario Minister of Energy claims that Ontario has one of the lowest electricity costs of any province in the country, has he checked them all? Does he explain that under the Liberal government’s energy sustainability program, Hydro is paying U.S. Border States to take our surplus power. That means Ontarians are now subsidizing the electricity needs of foreign states.
Ms. Wynne says relief of high hydro bills is on the way. Here’s a top Premier: Stop expanding our capacity to produce power such at the planned expansion of 1,300 megawatts this year. Also stop paying for private wind and solar producers to generate power that is not needed.
Wonder when that deal trickles down to Ontario consumers?
Toss in the cost of annual subsidies spent on Guelph Transit – $15 million; the Sleeman Center – $249,361; the RiverRun Theatre – $531,440; a city staff numbering more than 2,100 full time equivalent employees (FTE’s) who are paid by tax-funded revenue, representing 80 per cent of the total property taxes collected from some 55,000 households and businesses in the city.
For details on how the city staff has among the highest managerial costs in Ontario, go the guelphspeaks.ca archives and check out Pat Fung’s excellent analysis of Guelph costs compared to other cities.
The math indicates that future staff pension liability, directs the municipality to guarantee each employee upon retirement. The exponential growth of the Guelph civic staff and remuneration has steadily increased that liability and the costs of carrying it. Think about this: We are living longer and city employees, on average, are retiring at 55. Can you imagine that 20 years from now the City will be guaranteeing the indexed pensions of hundreds of former employees. It is possible that we could be guaranteeing the pensions of three former employees at the same time, who retired at 55, lived until 85 and held the same job.
Now add the city’s non-tax funded service increases including city water, Guelph Hydro, parking, storm water usage, $5 dumping fee, use of city-owned facilities including the civic museum, libraries, the Farmer’s Market, donations to 10 Carden Street ($110,000), the politicized Wellbeing give-away operation ($150,000) and a multitude of user fees.
Next comes the annual $300,000 support to build bicycle lanes on major roads that is funded by property taxes.
That’s what we do know. The problem is that there is a lot that we don’t know because of the closed-door meetings of council and its side corporation, Guelph Municipal Holdings Inc (GMHI). For breaking the Code of Conduct, council members can be investigated by the Integrity Commissioner. Councillors are forbidden to reveal the discussions, details, decisions and opinions to the public under a bylaw passed by the previous council covering closed session meetings.
Since 2007, everything has been done to deny information to the stakeholders. City communications are nothing but propaganda pieces instead of explaining the issues concisely, warts and all. Instead, the closed session meetings held by elected officials and selected staff, on and off the premises, hides the truth, thwarts public access and has placed our city in a dire financial situation.
As a sidebar, There are 11 employees in the city communications department. In contrast, the lone print media outlet, the twice a week Guelph Mercury Tribune, has four editorial staffers including the editor, two general reporters and a sports reporter.
If the Tribune can produce news reports with basically two reporters, why does the city need 11?
What a terrible miscarriage of responsibility inflicted by an ideologically dominated group on the people of this city.
Late breaking news.
Former Guelph councillor Maggie Laidlaw writing in the Mercury-Tribune Thursday, September 8, said the Money Sense magazine dropped its rating for Guelph from 15 out of more than 200 cities to 32. Maggie blamed it all on Mayor Cam Guthrie. She crowed about all the awards the former mayor had won and how she was well known nationally and internationally. But Maggie, she was defeated by more than 5,000 votes and you also lost your bid for re-election. Which only proves the adage by the late Tip O’Neill, Speaker of the U.S. House of Representatives, that all politics is local.