Tag Archives: Guelph property taxes

There are questions remaining about the three major 2020 city budgets

By Gerry Barker

November 18, 2019

Opinion

Tonight, city council will commence trimming the “tax supported operating budget.”

City staff has already reported a 3.88 per cent property tax increase subject to change, possibly increase.

This becomes a political matter as councillors jockey to promote their own must have agenda items.

Just wondering, does the University pay the same property tax increase as the rest of us? More on this later.

For some 14 years, citizens have been shorn of accountability and transparency of the public’s interest. Did I mention the administration’s conduct of the public’s business has deliberately thwarted the public interest?

Having just spent three years defending myself against the City of Guelph, the recent decision by a judge dismissing my 130-page statement of defence supporting my motion to dismiss the case. The judge ruling centred on the alleged harm done to the plaintiff and the public interest.

The judge ruled the harm done to the plaintiff “outweighed the public interest.”

That decision is being appealed to the Ontario Court of Appeal.`

What has this got to do with the city budgets?

Let me say from the start, that the financial management of the city has greatly improved. There is a refreshing openness about the flow of information from the finance department.

The number of closed-session meetings has diminished and the public interest is being better served.

Running a city of this size requires rocket-science attention in terms of planning, short and long term. The city has grown exponentially in many ways including population. However, questions remain.

Setting aside the performance of the previous administration, in the past five years, there have been some major league boo-boos. Much of it was commenced by the previous administration.

Then, following the 2015 first year of Mayor Cam Guthrie’s election there were changes among the senior city managers. By March, this year the three senior managers who shared the $98,202 salary increase in a closed-session of council in December 2015, are now gone.

Sifting through the budgeting sands

Here are some current questions that affect all citizens:

* Why does the city rely on communicating with the citizens Online or through its “City News” pages in the Mercury Tribune at the public’s expense?

* What are the details of the City’s long-term strategy plan and was there public participation when this strategy was discussed and presumably approved by council?

* What is the status of the main branch library that Mayor Guthrie promised to be part of the $350 million Baker Street redevelopment during his re-election campaign? Is it true that he said the library would be the anchor in the proposed plan?

* Why was it necessary to spend some $22 million on a parking garage next to the City Hall? How was that in the public interest when most of the parking spaces are monthly and convenient to the city staff?

* What is the proposed total number of public employees, including permanent, part-time and those on contract?

* What was the actual cost in 2018 of consultants, legal and other professional serves?

* There has been extensive work on Speedvale Avenue between Woolwich and Manhattan Court this past summer, What is the ultimate plan to relocate power lines underground. What is the rationale and source of funding for this project that three years ago, the staff estimated the cost to be $15 million?

* More importantly, is the plan to widen Speedvale to permit bike lanes and restrict traffic lanes from four lanes to two on the city’s major east west route?

* What is the financial impact of increased assessment for new construction and existing properties in the city?

* The staff is proposing a 3.88 property tax increase for 2020. Why is it being predicted to be more than 4.5 per cent before the trimming starts tonight, what ever that means?

* Why is the city administration plumping for five new buses but is the library, remember the promises made over the years, getting benched again?

* Why hasn’t the city pursued the University of Guelph’s sweetheart deal that in lieu of paying property taxes, it is based on charging each registered student $75 per year? Why was this rate locked-in by the province 33 years ago? Did your property taxes not increase every one of those 33 years and at a rate exceeding the rate of inflation?

* Shouldn’t the Guelph General Hospital’s $4.5 million requested grant be included in the capital budget, not tax supported operating budget?

* Is it time to approve annual subsidized operating grants to vital services such as public safety organizations, and critical care facilities?

* Why is the supply of water, potable, waste and storm, not included in the tax supported operating budget? It’s just another tax on top of the property tax annual increases.

* What is the definition of infrastructure? What are the parameters of renewal of our aging infrastructure, some of it 200 years old? Should there not be detailed explanation annually to show how the money is being spent?

* What is the latest information about the ratio of assessment between residential property and commercial/industrial? It has been locked into 84 per cent residential versus 16 per cent commercial/industrial. This is a massive burden on taxpayers.

* There is a mixed bag of special levies swirling around the budget soup.

Aside from the huge property tax deal subsidy granted annually to the University, what are their other subsidies paid to city operations?

Let’s review where your money is going:

Transit, pension benefits, boards remunerations, wellbeing donations, Hillside festival, staff travel, expense accounts, community city organizations, severance costs, employee bonuses, and gifts.

Add to the list, long-term suspended development including property tax grants and collection of unpaid taxes and offences fines.

The city’s chief source of revenue comes from property values and taxes.

In my opinion, successive provincial governments have failed to work with the 445 provincial municipalities to alleviate all the egregious downloading of costs.

Certainly there are some offsetting grants but this city needs a house cleaning to reduce costs and increase revenue without socking it every year to the property taxpayers.

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Part One – Farbridge’s legacy leaves Guelph with 50% higher per-person costs than Kitchener and Cambridge

By Gerry Barker

 Posted October 21, 2015

As the chart below clearly demonstrates it is time for the city to support the Mayor who was elected by the people on the platform of tax increases not higher than the Consumer Price Increase (CPI) that was 2.4 per cent in 2014. The analysis below suggests that this should be attainable.

For the past eight years of the Farbridge administration, the financial management was an ongoing disaster, new comparative analysis of Guelph’s costs to similar-sized cities makes the case.

Those cities included in the analysis are: Kitchener, Cambridge, Waterloo, Waterloo Region, Milton, Oakville and Burlington, among others.

The analysis broke down two units of each budget: Capital (in millions) and Operating (in millions). The per-person costs comparison was based on the 2011 census population of each city. Comparing Guelph’s finances to other municipalities is summarized in the Variance. Parenthesis ( ) indicates lower costs for those municipalities as opposed to Guelph.

 

City Capital Operating Total $ Variance % Variance
M= Million          
Guelph – pop 121,628 $88M $382M $470M    
Cost per person $723 $3,136 $3,859    
           
Kitchener – pop 219,153 $105M $129M $234M    
Cost per person $479 $589 $1,068    
Region of Waterloo – pop 504,096 cost per person $171M $1,349M $1,520M    
Total cost

 

    $2,588 ($1,271) (49%)
Cambridge pop 123,748 $13M $112M $124M    
Cost per person $102 $903 $1,005    
Region of Waterloo – pop 504,096 cost per person $171 $1,349 $1,520    
Total cost per person in Cambridge including Region allocation $273 $2,253 $2,525 ($1,334) (53%)
           

Please note that some of the numbers in the chart may not add through due to rounding.

You have to ask yourself, why are Guelph’s per-person costs compared to Kitchener and Cambridge so much higher? The plain answer is Guelph’s costs are too high. Can it be that the value of providing services in Guelph is greater than the two cities nearby? Because Kitchener and Cambridge are part of the Region of Waterloo, we have added those costs together so that the comparison is fair and equal. It is an accurate analysis as prepared by a professional accountant from official published financial reports showing per-person costs are 50% higher in Guelph.

These are only three municipalities out of the 18 analyzed whose 2015 budget costs were lower than Guelph’s with three exceptions, Milton 4%,  Oakville 11%, and the City of Waterloo 3% costs were higher than Guelph on a per-person basis.

It is now critically apparent that Guelph’s budget is far out of line with 15 other municipalities ranging from Vancouver to Peterborough.

Just comparing Guelph’s per person costs with Vancouver, the B.C. city of 603,500 population and one of the highest costs of living in the country, had a 52% lower per person capital and operating cost for 2015.

In fact, regardless of the population, Guelph’s 2016 budget must be drastically reduced or the city will become too expensive in which to live. One of the root causes lies in the Farbridge-induced services that affect a minority of citizens such as the cost of building bicycle lanes on arterial roads.

The responsibility for this financial mismanagement rests squarely with the former Farbridge administration. And these figures fail to include the loss of millions in failed policies and projects in the past eight years.

The Farbridge gang of seven obstructs change in city management

Guelph Mayor Cam Guthrie inherited this financial mess and is fighting a majority of Farbridge councillors in order to make the city more responsible in its management. Years of excessive spending, nepotism in hiring staff, has resulted in the huge operational costs of the city, more than surrounding peer municipalities.

The mayor and his supporters recognize the need to bring about the changes that people voted for last October. But they need the help of those people who overwhelmingly voted for change.

Even in defeat, the former mayor said her policies continue due to the majority of her supports elected to Council. This group includes councillors James Gordon, Phil Allt, Cathy Downer, Mike Salisbury, Leanne Piper, Karl Wettstein and June Hofland.

Ms. Hofland was elected by a margin of only five votes, and was appointed Chairman of Finance by her Farbridge cohorts. It is unknown if Ms. Hofland has any professional designation to qualify her for such an important committee chairmanship. She is a perfect fit for the Farbridge gang of seven because she does what she’s told.

Most of the property tax revenue goes to pay city staffs

Some 85% of property tax revenue is spent on the city staff; there are more than 2,000 Full-Time Equivalent, (FTE) employees. The figure includes full-time and part-time employees whose numbers and wages are adjusted to make up full-time status. The Human Resources report for 2014 is published in the spring of each year. In 2014, there were 268 earning more than $100,000. Another 21 employees were approved in the 2015 budget including some senior personnel.

The long term effect of lifetime benefits guaranteed to the municipal employees, past, present and future, has been recognized by many jurisdictions that have taken action to contain staff costs.

Compounding the problem is the growth of salaries, wages and benefits in Guelph.

The growth of the city staff plus the generous settlements with an estimated 80% of its unionized employees, has put city finances in a rising precarious financial trajectory to failure. Council can no longer close a blind eye to this growing problem by throwing more tax money to meet the costs of Farbridge policies in the hope it will go away.

The problem lies in the lack of financial training and management skills of theFarbridge gang of seven dominating council. And the ward three electors, by a margin of five votes, chose Coun. June Hofland who returned as chair the Finance Committee of a $500 million corporation.

This year, property taxes went up 3.96%, highest among peer municipalities in the area. If the 2016 budget includes another three or four per cent increase, property values will start going down and there will be an exodus, as people can no longer afford to live here.

It will occur slowly but it will happen if costs are not contained. Council’s course of action is to suspend all capital spending in 2016 with the exception of repairing the aging infrastructure. It needs a staff reduction. Also institute a wage freeze for the next two years. This one is complicated because of the unionized staff contracts.

This is a legacy of financial mismanagement that will take years to unwind and set the stage for hardship among many citizens unless costs are reduced.

It is now time for some serious discussion and political will on the part of all members of council.

The city property taxes ATM machine is now empty.

Editor’s note: I would like to thank Pat Fung, CPA, for researching and assisting in preparing this post. As usual your questions and comments are most welcome. Gerry Barker.

 Tomorrow, Part Two – Why it’s time to put Guelph on a financial diet

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