By Gerry Barker
Posted February 17, 2016
You can assume that finger pointing has already started.
Tuesday’s report in the Guelph Tribune has exposed how Guelph has wasted millions on a variety of projects including building an organic waste processing facility costing $34 million. This was six times the annual amount of wet waste generated by the city annually.
The Dunlop Drive waste management facility cost was never revealed to the public. Next was spending $15.5 million on using household bins and automated trucks to pick it up. Trouble was, some 6,400 households were not served by the system.
To keep the waste operation going, the city approached other municipalities to use its facilities to process waste. While Guelph citizens underwrote these waste management facilities, there has never been a real financial statement that outlines the status of this Farbridge-inspired plan to become a world-class manager of waste processing. The sick joke is that 45 per cent of the waste generated in Guelph, is still going to the landfill.
This is just some of the reasons that Guelph is under financial duress.
Precious capital was spending $10,000 renovating a derelict former convent building on Catholic Hill. This resulted in a civic museum. The problem remains that the money was spent on someone else’s property. This could create a problem for future councils. The truth of this abortive exercise is the foundation needed severe remediation to support the three-storey structure. Cost is unknown, Special cabinets were ordered from Europe only to find sprinkler heads were too close to the tops of the cabinets.
During the recent meeting, Coun, Christine Billings asked the staff to confirm that the Capital Renewal Reserve Fund was short $5.24 million because the money was used to settle the Urbacon Buildings Group Inc.’s, wrongful dismissal lawsuit. City General Manager and Treasurer Janice Sheehy conceded: “Yes, we did fund that particular issue from the reserve.”
In fairness, when that decision was made, Ms. Sheehy was not an employee of the city. Her admission however disputes the Chief Administrative Officer’s 2014 public statement that there was more than one reserve fund raided, to pay off the Urbacon settlement and legal fees. Ms. Pappert stated further that the impact of the lawsuit would not affect property taxes.
In July 2015, city council decided not to repay the $5.24 million taken from the Capital Renewal Reserve Fund. That decision was made knowing that it would cripple the potential participation in a federal-provincial infrastructure plan that would require the city to pay one-third of any accepted proposal.
At the time, the staff warned that future capital projects may “limit” the city’s ability to take part in any future large-scale infrastructure grant programs because there is no money to pay for the city’s share.
On December 9, the meeting of council determining the 2016 budget quickly buried a staff proposal to institute a ten-year, 2 per cent special property tax levies to pay for needed infrastructure repairs in the city.
Tuesday, the Tribune reported what remains of a $30-million Guelph Hydro note that used to make an annual contribution to city coffers. In July, 2009, council decided to cash in the longstanding Guelph Hydro note and use most of the proceeds, $22 million, to fund the city’s share of a flurry of infrastructure-related construction projects, done in Guelph under a federal-provincial stimulus program.
That leaves $3.7 million in the fund. The whole reserve situation is severely underfunded as stated in the BMA consultant’s report on city operations.
Well, we should be used to this by now. In 2009, the city participated in a federal-provincials infrastructure program. Today there is only $3.7 million left in the Capital Renewal Reserve Fund
In March 2013, the Capital Renewal Reserve Fund was created with the money remaining, $8 million, left from the $30 million Guelph Hydro note. But the city’s share of the federal-provincial infrastructure funding in 2009, grew to $27 million as such infrastructure items such as $2 million spent on Stone Road bike lanes, and a new $75,000 clock in the Sleeman Centre. It is apparent that the $4 million share overrun was paid through successive budgets, in which the real costs were buried.
How did this city get into such a mess?
It was accomplished by a city council dominated by Karen Farbridge and her supporters. For the past four years the council appointed chairperson of Finance, June Hofland, whose financial credentials do not extend beyond a teller’s cage. The former administration was aided and abetted by senior staff; today, four of them appointed by the former administration, are running the city. The present senior staff is devoid of responsibility in maintaining the net worth of the corporation, its ability to pay its bills or finance an aging infrastructure.
The agenda of the former mayor and her supporters on council is filled with projects and schemes to fit their plans with little public input. They have been supported by members of nine unions making up 80 per cent of the total city staff.
The present city staff has grown to such a point that the city can no longer support their numbers. Yet, the seven councillors continue to vote for more staff, as recommended by their cohorts in management, the city staff. This only perpetuates the growing costs and employment liabilities to the taxpayers and those citizens who must pay record-high user fees.
There are only two ways to fix the immediate cash problem: Add cash by going deeper in debt or sock it to the taxpayers with a special levy to raise cash. Sorry, I’ve seen this play before and you won’t like the ending.
The stakeholders in Guelph have been neutered by a minority group of individual, who have grasped power determined to change the city in any way they want.
And here’s an example of Councillor Mark MacKinnon’s solution to the city’s participation in a possible new federal-provincial infrastructure plan: “Take as much money as the federal government will give us.”
With respect, Mr. MacKinnon, that’s remark is a purely political sound bite that ignores the real financial situation this city faces.
City Council must engage in serious political decisions to extricate the stakeholders from this serious financial situation.
Not to take charge and assert financial principles, will be done at your political peril.