An open letter to Guelph’s Chief Administrative Officer, Derrick Thomson

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.

Thank you,

Gerry and Barbara Barker

Guelph residents and taxpayers

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13 Comments

Filed under Between the Lines

13 responses to “An open letter to Guelph’s Chief Administrative Officer, Derrick Thomson

  1. Joe Black

    Also how long does it take to finish Stone Rd between Gordon and Victoria.three years???

  2. Glen

    The approach required to bring financial reality to the Guelph budget process has been laid out in no uncertain terms. Will the CAO have the intestinal fortitude to step up to the plate? Time will be the judge.

  3. bostoncollie

    I wonder if certain councillors will pay adequate attention to the budget process while distracted by fighting multinational water companies. Maybe they could resign to take up the fight full time.

    • Barry

      I don’t often agree with the 7 including Gordon but for once I agree with his motion and his passion. Having worked in the Hydrology field for 35 years I also echo his concerns and fears for a sustainable future supply of water both surface and groundwater. The Budget is a separate issue for him to consider. As to how he will react we will have to wait but let’s focus on last night’s motion and other related issues that went nowhere in many cases i.e. Pat Fund’s efforts.

  4. Barry

    Guess Pat Fung’s presentation went nowhere and even his questions were never answered. And as Dan Gibson said what does Guelph’s credit rating really mean or matter?

  5. Guido

    Pat Fung’s budget recommendations if accepted would be an embrassement to the city. That someone from the outside might have the answers. That’s why it will not get a fair hearing.

  6. JS

    I really don’t understand why everyone is beating up on Nestle. What percentage of people in Guelph don’t use bottled water. I bet it’s pretty small. Picking on Nestle, who the city’s technical people have said does not impact Guelph’s water and ignoring Sleemans is confusing. Sleemans uses just as much water as Nestle and they are taking it directly out of the municipal water supply. But nobody talks about them.

  7. Barry

    And the reason why Sleeman’s isn’t touched is because it’s beer, a business that pays taxes to Guelph and employs how many Guelphites. I agree they are using our aquifer unlike Nestlé’s so it is more relevant to sustainable groundwater supplies for our City.

  8. JS

    Barry: I am quite confident the loud opposition to Nestle has nothing to do with taxation. However, I would point out that Sleemans uses Guelph water and pays Guelph property taxes. Nestle uses Puslinch’s ground water and pays Puslinch property taxes. I think those living in Guelph who oppose Nestle should first be opposing Sleemans.

    • Barry

      And as friends of Cam Guthrie I posed that to him on Sleeman’s and that’s why Guelph doesn’t rattle their chain i.e. tax revenue and jobs. I spent 35 years working in Hydrology with Environment Canada and to me I don’t care where we are. climate change knows no boundaries and with the drought we had this year I fear it will be the norm in the future. Business, car washes, timed commercial sprinklers or residential use, to me all should conserve water when they are told either by the Grand River Conservation Authority or our City code yellow or red.

  9. JS

    Barry: I agree that everyone should be treated equally. I guess I find it hypocritical that a group of Guelph councillors would target a non Guelph company when we have a local company taking as much water directly from our own water supply

  10. We are not that far apart on things except for one statement. You say “Remember, there is no harm in being frugal with the public treasure.” that’s not true. We had a council who were in need of therapy because they were so anal. They set the city on edge which affected many things. The death of a high school student from the collapse of the public sports washroom behind Bishop Mac High School is a direct result of the destructive attitude that the Council took and forced, blindly onto Guelph. Everyone, staff and contractors alike, cut back so much that someone actually died.

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