By Gerry Barker
Posted December 2, 2015
It’s easy to understand the dilemma the city staff and council face each budget year. There is a multitude of special interests ranging from the sublime to the ridiculous.
Witnessing a fiery and forceful lecture from the president of the Guelph and District Labour Council, demanding more services, more jobs paying union rates and higher taxes and user fees, became a throwback to the days of the dirty 30’s. Janice Folk-Dawson told a questioning councillor that she doesn’t mind a 5 per cent property tax increase for 2016 so long as council approved her organization’s demand to continue Labour’s vision of entitlements.
In contrast, Pat Fung, a Chartered Accountant and Chartered Public Accountant, presented a thorough and documented presentation that showed that Guelph’s capital and operating costs were 50 per cent higher than either Cambridge or Kitchener. Mr. Fung analyzed the city’s own BMA consultant’s report on operations along with the Financial Information Reports filed annually as mandated by the province.
This basis formed his detailed presentation that the city was paying too much for services and capital expenditures compared to its two neighbour municipalities. His findings are indisputable evidence that the city is facing a major financial crisis unless it reduces spending.
Here are some excerpts from his report:
Quote from the city website:
“The 2016 budget challenged the City to find additional efficiencies in an already lean organization. By critically reviewing each line item, departments were able to reduce their individual asks (requests) to support the overall 1.58 per cent increase,” says Janice Sheehy, city treasurer. “The recommended budget meets the community’s and City’s needs for 2016 while remaining affordable; however, with such a low tax increase we were not able to account for all increased demands placed on the organization from growth.”
* Mr. Fung’s reply: I do not understand how the city can say the organization is already lean when the BMA Report clearly shows our servicing costs per capita are higher than average. Indeed the 2015 operating and capital budgets on a per person basis are 50% greater than our neighbours Kitchener and Cambridge.
Pat Fung responds: I find it unacceptable that the Office of the CAO would submit a budget that shows a 1.58% tax increase by using cuts in transit service to arrive at that number when the Office of the CAO knows full well that transit services are a lightning rod and reductions here will likely not happen. Then the real increase in taxes will be somewhere more than 2.3% when expansion costs and final adjustments are added into the final property tax rate. That resulting figure will be adjusted when the revised assessment figures are added on.
* 2015 budget capital and operating per person based:
|City||2015 Operating and Capital budget combined||% different than Guelph|
Difference from average: $1,300 X population 120,000 = $156 million.
* There are staff recommended expansions for roads including 6 fulltime equivalent employees (FTE) and a contract costing a total of $902,000.
* Roads Cost per kilometre per BMA report:
Road Cost per person per BMA report
* There is a recommended expansion for parks including adding two Trails Technicians for $216,400 and other items costing a total of $521,000:
Parks cost per person per the BMA report:
Difference from average: $18 X 120,000 = $2,160,000
- Waste management costs:
* With reference to the recent internal audit report on waste collection, there appears to be some difference between the internal audit report and the BMA report. The audit report says collection is “being conducted effectively and efficiently”. Per the BMA report the costs per tonne and per capita are outlined below:
|Cost per tonne||Cost per capita|
Difference from average per capita: $19 X 120,000 = $2,280,000
* Fire cost per person per the BMA report:
Difference from average: $20 X 120,000 = $2,400,000
Fire costs are yet another example of our City spending more than others. The Office of the CAO must drive spending down, not tax the citizens of Guelph for its excessive spending. When it comes to negotiating wages, people are always comparing wages to other fire departments. How about comparing fire costs to other cities to determine the budget.
- The Open government Action Plan:
There is a recommended expansion for the Open Government Action Plan costing $264,200 and 1 FTE. The governance costs per person are outlined below per the BMA Report:
Difference from average: $125 X 120,000 = $15,000,000 or $24,000,000 compared with Cambridge. All proposed expansions could be funded from this area alone if it were at the Ontario average. Why is there a need for this position? What are the benefits?
Curiously, the Fung presentation was never mentioned in the Mercury report of the meeting.
The facts are there, so why doesn’t the staff do something about it?
These examples are factual and clearly demonstrate the need for restraint on the part of the administration. This does not seem forthcoming.
Just taking the cost of Guelph’s Operating and Capital costs for 2015, why does it amount to $156,000,000 more compared to either Cambridge or Kitchener? That’s the key question council and staff must consider before they tack on another inflated increase to property taxes and user fees.
When the staff budgeted is 1.58 per cent and then the recommended expansion of another 1.25 per cent we are at 2.83 per cent. This is before public and council reviews and adjusts the final figure. The gorilla in the process is the staff recommendation to increase transit fares and decrease weekend service. The betting is council will shy away from that proposal that will boost the final figure to more than 3.5 per cent.
Guelph Transit appears to be in dysfunctional distress, functioning under a system that is geared to routes with high traffic, i.e. the Gordon Street university corridor and a central hub system for all routes. When the low weekend ridership figures are considered, it makes it difficult for management to justify the cost. Chiefly because it’s bound by the labour contract with the American Transit Union including premium overtime. It’s no wonder the Transit spokespersons at the public meeting were so adamant about extending weekend service.
The large transit delegation indicated that the city staff used the threat of lowering weekend service, and increasing fares, to set up higher taxes when the transit cutback proposals will be dropped by a sympathetic majority of council.
To me, it seems that city taxpayers are already subsidizing the service by some $15 million a year, most of whom have never ridden the bus.
Perhaps renegotiating the University transit pass cost and offering incentives to the disabled and seniors may result in making the service less contentious and more accessible. Increasing the city subsidy, as an investment in better service, would indicate there is commitment to transporting those folks without vehicles, enduring poverty, who have disabilities and seniors.
When you think about it, Guelph has a seasonal transit system geared to serving the 20,000 students eight months of the year who pay a mandatory $150 for two semesters and receive an open-ended transit pass. That contributes $3 million to Guelph Transit.
Guelph’s BMA cost of roads is shocking. The only conclusion is part of the cost has to be attributed to the aggressive former council’s creation of additional bike lanes. Also, contributing is re-striping and reducing major road vehicle lanes to accommodate bike lane expansion. The program has caused increasing traffic congestion because of lane reductions on many major roads.
Driving around Kitchener and Cambridge there are few dedicated lanes for cyclists. Now the Guelph city staff is recommending that we spend $670,800 to clear bike lanes in winter. It’s time to put the brakes on the entire bicycle lane program until costs are brought into line.
Many Guelph roads and streets are in dreadful condition. Why the decision was made to widen and install bike lanes, curbs, sewers and sidewalks on Stone Road east of the entrance to the Arboretum remains a costly planning and engineering decision. The fact that the University owns the lands on either side of the new four-lane road and there is zero development of any kind makes one wonder where the priorities were.
It’s apparent that the eight years of the Farbridge administration has severely impacted on the city budgets as the Fung report details.
The numbers don’t lie so all members of council must realize the seriousness of the city’s financial structure. They, and staff senior management, must recognize why the high costs of operations and capital spending are much greater, per capita, than Cambridge or Kitchener.
When you make an omelet, you have to break a few eggs. That time has arrived.
Will you have cheese with that?