September 26, 2016
Dear Mr. Thomson:
In the next five weeks, your office will be responsible for creating and guiding a new city budget for the fiscal year 2017, for council’s approval.
Let’s face it. Last year’s budget process was a disaster, culminating in council conducting a nine-hour, free-for-all marathon. Over two days, the performance by the elected officials, can best be described as a bidding war to preserve the remnants of the former regime’s failures and mismanagement.
In fairness, you were not in charge when that 2016, $385 million budget was finally approved December 10.
Little did the public know about the ultimate fall-out. The former CAO resigned. The former Chief Financial Officer left for greener pastures; a newcomer, Scott Stewart, taking over waste management and environmental services, ultimately replaced him. You turned in your resignation in May and accepted a new job with the Town of Caledon. In the wake of the departure of Ann Pappert, you were persuaded to be Guelph’s new CAO.
You have inherited a staff that is demoralized, bloated and distrusted by the people who pay the bills.
But let’s hear from columnist Robin Sears, former national director of the New Democratic party who wrote in the Toronto Star:
“Professional progressives ruefully admit that voters’ lack confidence in the ability to spend prudently and effectively.
“On ensuring that public expenditure is well monitored and that outcomes are fairly measured, there is a widening credibility gap between political promises, performance and public perception.
“Too many progressive activists sneer at this challenge as merely the product of right-wing attacks on the role of government.”
Those comments describe the schizophrenic contradictory political world in our city, between its citizens, administration and lifestyle.
It’s no secret now that an independent management consultant BMA has stated that Guelph’s operational costs are much higher that similar-sized cities in the province. They have also questioned how reserves have been used to balance the city books every year for the past five years. In fact they raised a red flag about the diminished financial condition of the reserves.
Two things, bad forecasting and failure to control its own budget by consistently overspending has caused this situation.
Six years ago, there was $77 million held in 92 reserve funds. Today there are 26 reserve funds with less than $10 million and dropping. Your predecessor failed to balance the city books for five years making up the shortfall using funds from the reserves.
So, you have inherited a mess. The public feels that trust in the operation of the city is at a dangerously low level. While responsibility to restore public confidence rests with the elected members of council, the professional staff must share the public protest and distrust.
To be positive, you now have the opportunity to restore the city operations by rationalizing the staff functions to reduce operational costs. The city staff, over which you have control, according to independent analysis, can be reduced without impairing essential services.
According to the Sunshine List, more than 90 Guelph staff with the title “manager” earned more than $100,000 in 2015. It is apparent, based on comparative costs with other cities, there is redundancy and duplication of staff responsibilities that can reduce operational costs without service cuts. Reduction of administration costs is not a cut to services but overhead.
This is an area where you can show leadership.
For openers, tell your staff that the city budget must be reduced by 5 per cent by across-the-board layoffs, attrition, elimination of contract workers, and realignment of responsibilities. This will be a daunting task as 80 per cent of city staff is unionized, covered with collective agreement contracts. The staff reduction should not just fall on the shoulders of the lower-level employees.
The number of staff employed in the communications department total 15 full time employees including a general manager, three supervisors and a special communication specialist assigned to your office, plus nine communications specialists.
It appears the city has four times the communications employees than the local twice-weekly newspaper that has four covering the city, not just the administration. Perhaps indirectly, the publicly paid city staff may be feeding material to the newspaper owned by Metroland Publishing, a division of TorStar.
Also why are public funds being used to publish City News pages in each issue of the newspaper? What is that costing taxpayers when the majority obtain their news from electronic sources and the Internet?
The 2016 budget of $385 million is the baseline and should not be exceeded for three years until the next council is elected in October 2018. This will offer an opportunity to restore public trust in the administration to bring costs under control and invest in infrastructure, plus replenishing the reserves.
Most importantly, such action will make any proposed special property tax levy to taxpayers unnecessary. The Consumer Price Index for 2015 was 1.1 per cent. In 2016, council approved a 2.96 per cent property tax increase, a 4.11 per cent increase in water use; a non-tax base added cost to consumers. Add in the increase in property assessment by the provincial Municipal Property Assessment Corporation (MPAC) now engaged in mandatory increases until 2020. Regardless of the property size or use, the MPAC automatic increases of property assessments in Guelph will add millions in property taxes.
Mr. Thomson, this presents an opportunity to reduce expenses, coupled with the tools that you possess to invoke financial recovery.
Other touchy areas include dismantling the Community Energy Initiative that has no future without massive investment of capital. Then there are the costs associated with subsidies to operate Guelph Transit (est. $16 million), the RiverRun Theatres ($531,000 annually), the Sleeman Centre ($250,000 annually), bicycle lanes ($300,000 annually), the wellness handouts ($155,000 annually). These total $17,236,000. We both know that’s only the tip of the iceberg. All these areas should be audited, and directed by you using inside audit staff to reduce costs.
Remember, there is no harm in being frugal with the public treasure.
The subject of capital spending is another tough issue to get under control.
We both know there will be political protest if any operating costs are reduced. It will not be easy, but you have been given power to flatten out the organization and treat the public money like it is your own.
By freezing the city budget, reducing city staff numbers over the next three years thereby reducing operational costs, will lead to savings that can be applied to infrastructure repairs and maintenance, replenishing reserves without cutting essential services.
As I understand it, your mandate as CAO is three years. You can accomplish a lot to improve staff efficiency and performance, public pride and trust. When the time comes to leave office, enjoy the feeling that your leadership and action changed the course of the city to being a model of civic pride and responsible administrative management.
Gerry and Barbara Barker
Guelph residents and taxpayers