Are we, the “per capita” class, so irrelevant as Mark Amorosi describes us?

By Gerry Barker

November 14, 2916

The man in charge of our administration finances has gone out of his way to pooh-pooh the documented proof that compared per capita costs with other Ontario cities is irrelevant when it comes to Guelph’s financial situation.

I give Mr. Amorosi the silver tongue award for twisting and manipulating the facts. Here’s an example:

Guelph citizen Pat Fung, CA, CPA presented to council in September referred the statement made by Mr. Amorosi during the 2016 budget talks last December.

“The DCAO (Amorosi) stated the staff budgets has been reduced in successive years.”

Well, what’s Mr. Amorosi’s definition of “budgets?”

Here’s his explanation: Mr. Fung used the city’s official audited statements to show that expenses have increased by 52 per cent since Mr. Amorosi joined the staff in 2008. The chief of city finances claimed that he was referring to “reduced budgets in successive years” as part of the budget preparation. He referenced using data from starting point to presentation to council as evidence to support this – Mr. Fung’s statement disregards this context.”

Welcome to Amorosi-Speak.

The DCAO, responsible for the most important portfolio in the City of Guelph’s Corporate portfolio, shoots down the legitimate analysis prepared by a financial expert, that clearly shows our public finances are not on a “solid financial foundation” as Mr. Amorosi keeps saying.

Is he now telling council that Pat Fung does not understand budgeting? Is he saying he doesn’t understand “context?” For the record, Mr. Fung has done more corporate budgets and analysis including, reducing overhead costs than Mark Amorosi has ever experienced as a Human Resources trained specialist.

So if Mark Amorosi believes that city expenses did not rise by 52 per cent in eight years, why have our citizen’s expenses living in Guelph payable to the city, its subsidiary corporations and cost sharing with outside institutions, have collectively increased by an estimated 80 per cent? It is particularly interesting when the Consumer Price Index (CPI) increased by only 16 per cent during the same period.

Let us count the ways of how our Guelph costs have risen during the same eight years. Property taxes have almost doubled; electricity charges have increased by 42 per cent in four years; water bills have increased by more than 83 per cent since 2007; transit subsidy of 15 million a year; bicycle lanes development annual subsidy of $300,000; waste management operational losses of $270,000 a year; now the city is charging residents wanting to deliver trash to the multi-million dollar Waste Management Innovation Resource Centre $5 to use the facility the citizens financed.

The liability nobody in charge wants to talk about

But the biggie current white elephant liability is the cost of the Community Energy Initiative (CEI), managed by Guelph Municipal Holding Inc (GMHI) that has worthless assets. GMHI is bound by legal contracts that must be unwound. Add a debt load estimated to be $90 million including an impaired asset of some $69 million, as stated in the city’s 2015 annual audited financial statement. It’s now sitting on the city books as an impaired asset that GMHI has no financial ability to pay back or even hold tangible underlying assets.

That was originally a loan from Guelph Hydro that GMHI controlled when the former Mayor and her GHMI board folded Guelph Hydro into GMHI. Now the city has moved Guelph Hydro to become a city-controlled department eliminating any former arms length relationship with the utility.

Why did council do this? Because it is paving the way to sell Guelph Hydro to pay off the GMHI debacle and get that impaired asset off the city books. It is possible that the sale could bring in some $150,000.

Do we really want to have Mr. Amorosi get his hands on $150 million after the dubious track record of the previous Farbridge administration and now the Guthrie administration? Is it oblivious of what has occurred to the city’s finances in the past two years?

Mr. Fung’s analysis is dead on. Guelph has serious spending problems that is not going away.

Here’s why. There are the political reasons and there is the cost of operations.

First, let’s consider finances. As Mr. Fung has accurately pointed out, the city has a very high cost of operational overhead. It’s 50 per cent higher than either Kitchener or Cambridge. In his analysis he pointed out that staff costs are eating a large piece of the operating budget. This area is manageable and does not affect services to the public.

Cutting the city administration overhead is not being considered

But Mr. Amorosi refuses to even consider reducing staff. In fact in his first two budgets as chief of finance, he persuaded council to add some 40 additional full-time staff.

Judging from the reports coming out of city hall regarding the 2017 budget, we could be facing a total city tax and user fee increases of 5 per cent. First, there is the staff proposal of 1.96 per cent; then add the proposed .5 per cent, ten-year special levy for infrastructure maintenance; then add the annual assessment increase on property; the storm water levy of $4 a month added to your hydro bill; your water levy that will be increased by 4 per cent starting in January; your hydro bill over which the city now has control; Premier Wynne’s carbon tax will be billed starting in January on your hydro bill; the high cost of just moving around in Guelph, transit, parking, increased traffic congestion.

These are citizens’ pocketbook costs that Mr. Amorosi fails to calculate when the 2017 budget is being presented, not just to city council but to we “per capita citizens” who actually pay the greatest proportion of the approved budget.

According to the city Human Resources department there are some 1.440 city-staff only employees. of which 55.5 per cent do not live in Guelph including Mr. Amorosi and Mr. Thomson. Wonder why some 799 city employees don’t live where they work or don’t pay taxes? Is it possible that Guelph is too expensive in which to reside?

Council still doesn’t get it

It is interesting that council voted 11 to 1 to adopt the ten-year property tax special levy to pay for the infrastructure backlog that eight years of the Farbridge administration failed to address. Failed that is because of investing in other priorities such as bike lanes; vehicle lane reductions; Urbacon lawsuit; overbuilt Waste Management Innovation Resource Centre on Dunlop Drive; the Communality Energy Initiative and focusing on downtown redevelopment.

But the Farbridge administration had no capital to build a south-end recreational centre or a new downtown library. Unless the operational overhead costs are not substantially reduced, don’t expect either of these projects to be built in the next ten years. The Chief Administrative Officer has stated that the nine-year capital spending budget is already $170 million short of capital and it’s only a year old.

It’s more than establishing priorities; it’s about serving the needs of the people, the “per capita citizens” whose needs have been ignored and left behind. Not by just the dedicated Ms. Farbridge loyalists, but present control of the city by James Gordon and the rest of the Bloc of Seven on council.

With thousands of litres of water leaking from municipal pipes why is council talking about Nestle?

And what are they talking about? It’s about the underground aquifer from which Guelph and other communities draw their water. Instead they focus on Nestle drawing water at Aberfoyle urging the province to control bottled water operations.

Yet they say or do nothing about the tremendous leakage of water from the city’s aging pipes. The amount of water taken by Nestle is miniscule compared to the water wasted and leakage problem in Guelph. Their solution? Increase taxes to pay for repairs.

Do we really trust this administration to use our money to be spent on infrastructure repairs with its record of tapping into dedicated reserves over the last ten years to balance the city books?

Sorry that my trust in this administration to work for the people has long vanished.

I am reminded of a motion, I believe it was in the 2015 budget to spend $50,000 to solve the infestation of Canada geese in the city parks, particularly those located adjacent to water. Recently during my wife’s morning walk; sidestepping the goose pooh, she counted 127 geese in Riverside Park.

If council and staff can’t handle the goose problem, how can we expect it to solve the mismanagement of our “per capita” finances?

If you have not read the Fung analysis, it can be obtained from http://www.guelphspeaks

 

How a failing Guelph administration is protected by a Mayor defying criticism

By Gerry Barker

October 3, 2016

When Mayor Guthrie announced his intention to run for mayor in January 2014, he talked about “For a Better Guelph.” He also mentioned the “Guelph Factor” as part of the problems facing the city and his reason for running.

But then, he campaigned on holding property tax increases to two percent or the

Consumer Price Index (CPI) that in 2015 was 1.1 per cent. In 2015, his first year in office, the Guelph property tax increase was 3.96 per cent including the effect of the assessment increase on properties.

On December 10, the Mayor presided over a closed session of council that approved paying four senior staffers $137,894 in salary increases for 2015. As this was a closed session, the reasons for including the discussion and vote have yet to be made public.

The four senior managers, CAO Ann Pappert, DCAO’s Mark Amorosi, Derrick Thomson, and Al Horsman received excessive increases that became public with the publication of the Ontario Sunshine List last March. Mr. Horsman resigned in August 2015. Ms. Pappert resigned last May. Mr. Thomson also resigned in April to take another job but was brought back to take over the CAO position in June.

Is this the Mayor’s new interpretation of “A Better Guelph?”

Then along comes a Guelph resident, Pat Fung, CPA CA who examines the audited Financial Information Reports published by the city for the previous four years. He also examined the 2014 BMA consultant’s report of city operations.

This culminated in a detailed analysis of the city’s operational costs, compared with similar sized cities. It broke out the costs of the various departments and institutions of the city and compared them to the Ontario averages.

Mr. Fung, acting as a concerned citizen, sent each member of council a copy of his analysis August 18. Last Monday night, he made a five-minute presentation summarizing his findings. The council response was zero, although the large crowd in attendance applauded the presentation.. In fact, the Mayor shut him down when he directed a question to DCAO Amorosi.

The Mayor followed it up commenting: “I find it a bit disturbing that people would come in here and challenge our staff in this way.”

What does Mayor Guthrie mean when he adds, “in this way?” Are the people he represents not supposed to complain when accurate facts of financial mismanagement are exposed? Which “way” should the people react and respond?

Our Mayor seems to have drifted away from the people, who supported him, to go out of his way to protect the hired help. Does he seriously believe that there aren’t people in the city who clearly understand the gross mismanagement of the city that he promised to correct?

How does a credit rating reduce operational costs?

If the Mayor doesn’t understand the financial state of the city, how does he fulfill his promise of a “Better Guelph?” Does he believe that an AA+ credit rating by Standard and Poors (S&P) makes it all better?

You remember the S&P rating company. Between 2006 and 2008, it gave inflated credit ratings to mortgage-backed securities sold by most major U.S. and global banks. The S&P ratings nearly collapsed the global economy when millions of so-called investments were found to be worthless, except for the people who sold them using S&P credit ratings to support their validity.

Some Questions: The staff reported that S&P gave the city the AA+ credit rating in 2013 same as it is today. Did the city pay for this S&P report and how much did it cost? Why is there a three-year gap between the reports? How does this pat on the back credit rating affect operational costs of the City of Guelph? Answer: It has nothing to do with operational costs. Finally, when the city borrows money, it backs the debt with the assets of a $500 million corporation as collateral. This applies to most Ontario municipalities who borrow money. But then, Guelph already exceeds its debt ceiling as set by city councils.

Aren’t the city staff and some members of council applying the same tactic to misinform the citizens and lull them into not complaining? It appears that the Mayor has joined in that chorus of dumbing us all down.

Which brings us to the public financing of the Guelph Mercury Tribune

When Pat Fung took his report to the Tribune for publication, he was told they couldn’t run it because it was “too long and too political.” At no time did Editor Doug Coxson offer to have a reporter review Pat’s analysis to develop a news story.

By any interpretation, it is a news story and worthy of coverage.

I spoke with Pat and suggested we take out an advertisement in the paper to print the details of his report. I also agreed to raise the money for the ad.

I delivered the copy to the paper last Tuesday that the ad representative accepted and downloaded from UBS drive. I also presented a cheque for $2,083 to pay for the ad. On Wednesday morning, I checked to see a finished proof of the ad and was told there were “red flags” about the copy. And there had to be changes.

I asked if the ad was to run Thursday and was told no, not until the paper approves the copy. I requested the objections in writing and was told they would not comply but the ad rep would give a brief summary of the objections. These included lack of documentation, inflammatory content and details of who was placing the ad and contact numbers.

It was obvious, Metroland Publishing, the owners of the paper, had made a decision not to support the Fung analysis, either in the editorial section or a paid ad.

Now this deliberate blocking of free expression is going to be forwarded to the National Press Council for adjudication. The complaint will name the owners, TorStar Corporation, its subsidiary Metroland Publishing and The Guelph Mercury Tribune.

It’s astonishing, that in this day and age that a newspaper, enjoying a monopoly as the only paper in the City of Guelph, refuses to print a legitimate and accurate analysis without even attempting to review it or write a news story.

Instead, the paper published a news story with the heading: “Persistent city finance critic rebuffed at Guelph Council meeting.” Had the reporter read the Fung analysis? Did the editor even consider doing a news story about a citizen, trained and experienced in his profession, regarding the financial status of our city?

The answer my friends, is simple. The Mercury Tribune receives an estimated $350,000 to $500,000 a year from the city for publishing the “City News” pages in every edition of the twice-weekly newspaper. Those ads are paid by public funds so we have forcibly become partners with a newspaper. A newspaper that is biased favouring its city ads client and refuses to recognize its responsibilities to its readers who have legitimate causes and deserve space in the paper.

Citizens are victims in this unholy alliance between the city administration and this newspaper.

So much for democracy and free speech.

*            *            *            *

An important message from the editor

Dear Donor:

In the last three weeks, I solicited funds to pay for a full-page advertisement in the Guelph Tribune to reproduce the excellent analysis of the City of Guelph’s financial condition, compiled by Guelph resident, Pat Fung, CPA, CA.

I regret to inform you that the Guelph Tribune refused to publish Mr. Fung’s report as editorial comment using the excuse it was too long and too political. But then, the paper refused to allow citizen’s to purchase ad space to expose Mr. Fung’s details of the state of city finances.

I am personally embarrassed over these developments that I believe is nothing but planned suppression of the news that affects our community. I made a commitment to all donors to ensure that more residents would receive the Fung analysis. I can say now that it won’t happen, using the Tribune.

But, there is active planning to pressure the Tribune and extend the reach of www.guelphspeaks.ca, the only consistent critic of the city administration and supporter of the Fung Report.

We are appealing to the National Press Council to adjudicate a complaint that the newspaper, restricted fair comment by denying accommodating coverage of the Fung report on the news pages, but denied our attempt to publish the details in a paid advertisement. This is a clear violation of journalistic ethics and responsibility to the readership by suppressing information of vital public concern and interest.

We are not going to let up spreading details of Pat Fung’s analysis of the financial condition of our city. Doing this will require accumulating funds to inform residents of the details. Without access to the newspaper, we must seek other means of communication to express our points of view, both in print and social media using the Internet.

Accordingly, I will refund any donation made for this cause, if requested.

Please email gerrybarker76@gmail.com if you want your donation refunded. Please include your full address and email ID.

Remember why we are here. There will be an election in 2018. If we fail to plan and fund our point of view now, the outcome will not be attractive.

Next time we have to be sure. This is only the beginning of a long march to create real change.

Thanks again for your support and I hope we can count on you in the future.

Sincerely,

Gerry Barker

Editor, http://www.guelphspeaks.ca

Why Guelph’s bureaucratic costs are crippling our city, because staff won’t listen

By Gerry Barker

September 12, 2016

On August 22, My wife and I sent an open letter to the Hon. Bill Mauro, Minister of Municipal Affairs. In the letter, the details of mismanagement of our city were outlined and we asked a reply to our request for an investigation of city operations.

That was three weeks ago and we are still waiting.

Premier Kathleen Wynne appointed Mr. Mauro in her recent cabinet shake-up. He has experience on this file as he served in the job before. Our MPP Liz Sandals was moved in that shake-up from Minister of Education to President of the Provincial Treasury Board, a less onerous cabinet job with little or no public exposure or consequence. That’s the equivalent of a “D” in politics.

Meanwhile Deputy Chief Administrative Officer (DCAO) Mark Amorosi disagreed with his new boss, Chief Administrative Officer (CAO), Derrick Thomson, about the state of city finances. His statement claiming the city was in “sound financial condition” contrasted with the CAO’s statement that the nine-year capital expense plan was underfunded by $170 million after just one year in operation.

Believing today that this city can afford a new Downtown Library, South End recreation Centre, the Wilson Street parking garage and redevelopment of the Baker Street parking lot, is pixie dust and impossible.

It is now open and transparent about how public money has been wasted by a staff in concert with council in the past nine years.

It is not Mayor Cam Guthrie’s fault. He, unknowingly in taking office December 1, 2014, inherited a financial cesspool of millions spent and wasted on self-serving policies of the previous Farbridge administration. You remember them and all their self-promoted awards. To read a recent column written by one of her supporters, the writer painted her as Saint Karen, the revered leader of Guelph. Yikes! Is there no limit to their arrogance?

The problem today is the rigid control of council. They regularly support the senior staff that has seen a CAO and DCAO leave the city because of the revelations of mismanagement.

In his fine analysis of the bloated city operational costs, Pat Fung, CPA, CA, outlined why the city’s operating costs were growing at an unsustainable rate that lasted seven years.

Here is a telling chart of Pat Fung’s analysis

Guelph’s Operating Costs 2008 to 2015 (source: Audited financial statements)

($ thousands)	2015	2014	2008		$ ’08 to ’15	per cent
General government	27,070	25,136	18,891		8,179	+43.3%
Protection services	79,550	75,506	51,855		27,695	+53.4%
Transportation services	60,381	57,405	43,380		17,001	+39.2%
Environmental services	76,238	72,697	35,035		41,203	+117.6%
Health services	29,180	27,522	18,524		10,656	+57.5%
Social and family services	43,601	52,280	51,183		-7,582	-14.8%
Social housing	21,372	20,444	n/a		21,372
Recreation and cultural services	40,906	39,481	23,947		16,959	+70.8%
Planning and development	7,313	6,155	3,986		3,327	+83.5%
Total Expenses	385,611	376,626	246,801		138,810	+56.2%
Consumer Price Index	126.6	125.2	114.1		12.5	+11.0%

Guelph should reduce its operating expenses by $20 million and freeze taxes and fees at current levels to fund the capital/infrastructure gap. We cannot continue to increase spending on operating costs on top of increasing our spending on capital and infrastructure.

The Fung Solution: It can be done by freezing revenues at 2016 levels and reducing expenses by $20 million annually. It can be accompkised by freezing expenses at $365 million for 20 years, allowing for increases for index of inflation and assessment growth. City reserves would be built up to $200 million in 10 years. This would be reduced by whatever is spent in the interim on capital and infrastructure. This has the same financial effect as increasing taxes but is funded totally from within the current taxation, user fees and spending.

Will Guelph do the right thing and reduce staff and operating costs?

Guelph’s current financial situation is close to what the City of Brampton faced last week when it terminated 25 senior managers. Mr. Fung pulls no punches in his analysis saying in order to reduce operational expenses, the city will have to lay off staff, reduce salaries and reduce management personnel. According to the provincial Sunshine List there are 92 city staff positions with the title “ manager.” That’s one for every 22 full-time equivalent employees

Regardless, the new CAO is quoted as saying that: “One option the staff will not present to council this fall as a solution to its capital funding woes is drastic cutting of services.”

That’s the usual claptrap excuse that has enveloped thinking of both city staff and leftist members of council.

Mercy me. We can’t cut services as the runaway train of financial mismanagement plunges off the cliff? Thomson disregards the Mayor’s request to investigate funding alternatives other than another property tax increase.

With that thinking by the CAO, who heads the 2,100 member of staff, get ready for a recommendation by staff to approve a 2 per cent special levy of property taxes for more than five years. Or, perhaps a longer period. It remains a sloppy and quick fix to the deep financial problems existent today and are not hoing away. It’s just another way to extract more money from the property taxpayer.

Do these deep thinkers on staff not understand why Guelph’s operating costs on a per person basis in six active operational areas, far exceed the average of the rest of the municipalities in Ontario?

According to the independent BMA consultant report, every person in the city pays $836 for the operational costs of six defined areas. The average in Ontario is $586 per person. That’s a 42.66 per cent difference, or total excess spending by Guelph of $30 million per year.

Now let’s take the General Government’s cost comparison. Guelph spends $229 per person in this category. The Ontario average cost per person is $104. The difference is a whopping 120 per cent additional cost to every resident of the city. Further, General Government expense is not a service but overhead. It can be reduced to meet needed cost cutting measures to bring the city government costs in line with what most Ontario municipalities are currently paying, based on a per capita population.

Now current acting CFO, DCAO, Mark Amorosi, doesn’t like to talk about this per captia cost. He says it’s irrelevant. What doe he care? He lives in Hamilton.

The present senior staff management and the Bloc of Seven on council, show no signs of acknowledging the growing financial problems being foisted on the taxpayers year after year. Plainly the staff is bloated with too many managers, high salaries and benefits, plus in some cases, two high priced managers doing one job.

Mark Amorosi’s crowning triumph was getting council, in closed session, to approve a 17.11 per cent increase for his then boss Ann Pappert and his three DCAO colleagues between 14 and nine per cent increases for 2015.

The public found out about it in March this year when the provincial Sunshine List of every public employee in Ontario earning more than $100,000 is named with taxable benefits five months after the fact.

Mark Amortosi was in charge of the city finances and Human Resources when council approved those increases December 9, 2015. Why is this man still working for the City of Guelph?

We urge folks to read the complete Fung Report. It can be found in the guelphspeaks.ca archives – Part One was posted August 29, 2016 and Part Two was posted September 1, 2016. If unable to locate the report, please contact Pat at pat.fung@sympatico.ca or guelphspeaks.ca

 

Part Two of Pat Fung’s analysis of the high costs of city operations and how to fix it

Posted August 31, 2016

By Pat Fung CPA, Ca

Pat Fung is a resident of Guelph who has analyzed data produced by the city and its management consultants, BMA of Hamilton. Part One offered detailed charts that compared costs in certain areas and certain management positions paid to Guelph staffers to those in the same or similar jobs in other cities. The information not only reveals the discrepancies of employment, but Mr. Fung provides solutions to reduce operational costs.

Part One may be found in the guelphspeaks.ca archives for those who missed it.

Sent to all members of City Council August 18, 2016

Fire (Chart B, line 2)

1. According to the 2015 Sunshine List, Guelph’s Fire department has 8 Platoon Chiefs in Training all making around $125,000 per year. No other municipality in Ontario has this position.
2. Guelph also has an “Assistant Chief Fire Prevention Officer” at the same pay grade, but few other cities have this position.

Eliminating these positions will save $1,125,000. Cutting administrative staff should have no impact on fire services. Are there other positions in the fire department that perform administrative tasks that if not done do not affect service? If so, the tasks and the personnel should be eliminated.

Waste Collection (Chart B, line 3) and Chart C 2^nd from last line

How many personnel in this department do administrative tasks rather than direct waste collection work? Administrative tasks not directly providing service should be drastically eliminated, thus eliminating the need for some administrative personnel and reduce costs. I have spoken to the Waste Collection management on two separate occasions about changing the waste pick up schedule to follow the Vancouver model wherein no overtime is paid on the weeks where a public holiday occurs. This is simply done by postponing pickups permanently for 1 day until the next public holiday. (e.g. if your regular day is Monday and there is a holiday that Monday you permanently move to Tuesday until the next holiday then you move to Wednesday etc.) I was told the City spends over $60,000 in overtime because of the way it currently picks up waste when there is a public holiday. There are no publically available numbers to determine why costs in Guelph are higher on a per tonne or per person basis. You will have to question this department yourselves and dig into the numbers and flush out the reasons and act accordingly.

Roads (Chart B, line 4) and Chart C last line

Given what we spend ($27,617 per km vs Ontario average of $11,847 per km), why are Guelph’s roads not in better shape/condition? As a Council you will have to delve into the numbers and flush out the reasons why our road costs are so high compared to other Ontario municipalities and act accordingly.  Is road work done by outside contractors? If so, are rates paid in line with other cities? How many personnel do administrative tasks versus direct road work? Elimination of administrative tasks and personnel will reduce the costs for roads.

Parks (Chart B, line 5)

The 2016 budget request included a request for a trail technician and other new personnel totaling over $500,000. We are already higher than the Ontario average for parks spending, so any new additions made in 2015 and 2016 should be eliminated.  Also, how many personnel in this department do administrative tasks versus direct parks related work? Elimination of administrative tasks and personnel will reduce the costs for parks.

Library (Chart B, line 6)

For a city our size, why do we have two high priced administrative positions that are paid over $100,000 per year? What other administrative positions are in the library spending that do not directly provide library services? Elimination of administrative tasks and personnel will reduce costs for library.

FINAL COMMENTS

Clearly, Guelph has financial challenges and it’s time for the Mayor and City Council to deal with them. Bob Moore made this point well in his July 28, 2016 Mercury-Tribune editorial http://www.guelphmercury.com/opinion-story/6787414-when-will-we-hear-the-outrage-from-city-council-/

I have demonstrated in this letter that there are numerous opportunities to address our financial challenges through reductions in operating expenses, especially through personnel reductions. The CAO has expressed concerns that we would be “robbing Peter to pay Paul”. (See first link below). In my opinion, we have too many Peters, so having fewer of them is a great way to help fund Paul.

That said, how does the City justify not having a CFO until next year? The recently appointed CFO will be on maternity leave until 2017. This is not wise under the current circumstances surrounding the 2017 budget and should be reconsidered.

Similarly, why aren’t the CAO and the DCAO of Corporate Services on the same page when it comes to the City’s finances? In the July 15, 2016 Mercury-Tribune article, CAO Thomson said:

“City Hall currently doesn’t have enough money to build all of the projects in the city’s nine year capital forecast, let alone to begin to address our infrastructure backlog.” http://m.guelphmercury.com/news-story/6769276-special-tax-levy-on-council-s-radar

However, on the city website announcing the new CFO, DCAO Amorosi said:

“I have great confidence that she will provide strong leadership and continue to strengthen the City’s solid financial foundation.”

http://guelph.ca/2016/07/guelph-hires-chief-financial-officer/

Why does the CAO say we don’t have enough money, yet the DCAO says the City has a solid financial foundation? They both can’t be correct.

Finally, why shouldn’t we look at reductions in services in addition to reductions in administrative operating expenses? In the July 15, 2016 Mercury-Tribune article, CAO Thomson said that reductions in services are not being considered:

“One option that staff won’t present to council this fall as a solution to its capital funding woes is…drastic cutting of services because staff don’t believe this would provide enough money for capital needs.”

This statement by the CAO shows a clear disregard for what the Mayor asked for earlier in the year at a Corporate Services Committee meeting. The Mayor specifically asked for funding alternatives other than a tax increase. The DCAO agreed to provide a list by the summer. Why is the Office of the CAO being insubordinate? Isn’t it the job of the Office of the CAO to carry out Council’s wishes? It seems in this City that the Office of the CAO dictates to Council, not the other way around.

Does staff believe that reductions in services won’t provide enough money for capital needs or are they just protecting their jobs? After all, it’s much easier for staff and management to recommend tax increases rather than to face their colleagues and subordinates and tell them they are being terminated or their salaries are being reduced. Why is it every time Guelph is looking for funds, its first response is to add fees or increase taxes?   There is always this veiled threat that services will be reduced if expenses are cut. In the business world, expense reductions happen all the time. Why is Guelph the exception?

As I said in a letter published in the Mercury-Tribune in response to Councillor Salisbury’s Feb 23, 2016 letter to the editor stating that “the City is not at fault for the infrastructure gap”, we should get a new management group if we can’t achieve a 6% reduction in expenditures in this City.

As I stated earlier, it is time for Guelph to reduce its operating expenses by $20 million and freeze taxes and fees at current levels to fund the capital/infrastructure gap. We cannot afford to continue to increase spending on operating costs on top of spending for capital and infrastructure.

If you would like to have a discussion on anything in this letter, I am open to it. Thank you for your time and I look forward to hearing from you.

Regards,

Pat Fung, B. Comm., CPA, CA

Ward 6

This analysis report was sent to members of city council, August 18, 2016

Part Two concludes Mr. Fung’s analysis. While there has been some verbal discussions between Mr. Fung and some members of council, there has only been one response from a member of the majority Bloc of Seven. That response was framed in the form of questions. Time will tell if this council will seriously consider the data and work together to lower operating costs and eliminate wasteful spending.

Part One may be found in the GuelphSpeaks archives for those who missed it.

Your comments, as always, are welcome. The public response to this data has been outstanding and totally in support of Mr. Fung’s efforts. GuelphSpeaks suggests that citizens who want to see operating costs reduced, should email or write their their responses to their council representatives.

In future posts, GuelphSpeaks will follow up on this study and will comment appropriately.

 

How the 2016 budget public input meeting became a night at the opera

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
Guelph	$3,859
Kitchener	$2,588	49%
Cambridge	$2,525	53%

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:

Guelph	$27,617
Average	$11,847
Median	$12,151

Road Cost per person per BMA report

Guelph	$244
Average	$99
Median	$67

* 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:

Guelph	$77
Average	$59
Median	$55

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
Guelph	$137	$29
Average	$114	$10
Median	$90	$9

Difference from average per capita: $19 X 120,000 = $2,280,000

* Fire cost per person per the BMA report:

Guelph	$185
Average	$165
Median	$162

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:

Guelph	$229
Average	$104
Median	$86
Cambridge	$29
Kitchener	$21

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?