Tag Archives: property taxes

She promised to put Guelph back on track instead we got a financial train wreck

by Gerry Barker

July 24, 2016

Most people thought the 2006 Karen Farbridge election slogan of “Let’s put Guelph back on track,” was catchy and promised great expectations.

It is apparent that the critical mass of over-spending by the Farbridge eight years of financial mismanagement, is rapidly reaching a disastrous climax starting right after Labour Day.

Financial Climax? What climax?

Let’s check it out. First, the reserves have been tapped out, in order to balance the books for every year since 2010. Why? It’s because the budgets were consistently overspent and the books had to be balanced. If the administration cannot stick to its own budget, it reflects financial mismanagement.

Then the new nine-year capital budget, starting this budget year has already been overspent, according to staff, by $170 million. Throw in the Urbacon city hall breach-of-contract lawsuit and unplanned overages totaling $23 million, and the $37.1 million spent on the Community Energy Initiative, and it’s no wonder the city is in financial trouble.

Toss in the annual subsidies spent on Guelph Transit – $15 million; the Sleeman Center – $249,361; the RiverRun Theatre – $531,440; a city staff numbering more than 2,100 full time equivalent employees (FTE’s) being funded by tax-funded revenue, representing 80 per cent of the total property taxes paid in the city.

What most people don’t understand is the long-term public liability to which taxpayers are responsible forever. Along with a matching contribution, most unionized workers contribute to a defined pension plan that guarantees a pension based on salary, wages, benefits and length of service. Most city workers belong to the Ontario Municipal Employees Retirement System (OMERS). The organization represents more than 270,000 Ontario public employees. The average retirement age for these folks is 55.

The math would indicate this liability, that the municipality must guarantee each employee’s pension. The exponential growth of the Guelph civic staff and remuneration has steadily increased that liability and the costs of carrying it.

The spending doesn’t stop with property taxes

Now add the city’s non-tax funded service increases including city water, Guelph Hydro, parking, use of city-owned facilities including the civic museum, libraries, the Farmer’s Market, donations to 10 Carden Street ($110,000), the Wellbeing operation ($150,000) and a multitude of user fees.

Next comes the annual $300,000 support to build bicycle lanes on major roads. Typical of the Farbridge-inspired financial management, in 2015, Coun. Mike Salisbury moved to spend $600,000 because the bike lane allotment wasn’t spent in the 2014 budget. Thanks to the Bloc of Seven (BOS), it passed.

In August 2014, then mayor Farbridge, persuaded council to finance a $34.1 million renovation of police headquarters. Here’s how it was financed: Tax funded debt – $16.3 million; tax funded police capital reserve – $3 million; Future development fees – $14.8 million. So, let’s get this straight, the police project was approved betting on that future development fees collected from OTHER projects would cough up $14.8 million!

Think about that. As a future developer you pay development fees that you believe will pay for infrastructure-connection to city services, parks, recreation, equipment and, oh yes, a library. Sorry that money has been pledged by a former council to finance a police building. Citizens are now saddled with some Farbridge fancy financial footwork to pay for this public safety Taj Mahal.

This has created a capital financial shortfall that cancels out the downtown library and South End recreation centre. Forget redevelopment of the Baker Street parking lot, mixing private funding with public money. What private developer would want to engage with the city with its track record of bungled civic projects? The former Building Inspector was fired by the city that is currently being sued because it failed to issue building permits for more than 50 city-operated projects. Bruce Poole, a veteran of 30 years working for the city, is seeking $1 million for wrongful dismissal.

That’s what we do know. The problem is there is a lot that we don’t know because of the closed-door meetings of council in which the members face discipline by the Integrity Commissioner for breaking the code of conduct. Councillors are forbidden to reveal the discussions, accusations, and opinions to the public.

As an aside, why wasn’t Coun. Mike Salisbury not investigated by the Integrity Commissioner when he blabbed that he tipped off friendly blogger Adam Donaldson. It was about the decision by five members of the BOS to walk out of a closed session meeting.

Do we have a council of 13 members or only the BOS who support the policies of the previous administration? That’s the situation why city council is dysfunctional, dominated by obstructionism that makes council unproductive.

The city administration takes an August siesta

With August looming, this administration has turned the city operation into a version of what happens every August in France. In that case, the country shuts down. There are no council meetings scheduled and activity slows to a crawl. Even the staff is give a half hour less per day, during August, to perform their jobs. That’s two and a half fewer hours per week.

Complicating this up-coming snore-fest is the realignment of senior management. Derrick Thomson was appointed Chief Administrative Officer (CAO recently) and Colleen Clack, Deputy Administrative Officer (DCAO) in charge of city operations and Guelph Transit. Mr. Thomson previously performed this job.

There is a learning curve to be taken and the political pressure is relentless being exercised by the Bloc of Seven (BOS) even when the city shifts into hiatus for more than a month, the BOS continues to dominate the administration.

But the rubber will hit the road, starting September 6, as the process of creating a 2017 budget begins. Already the staff is signaling that there are special levies in the planning stage. During a recent capital-spending workshop, DCAO Mark Amorosi, the man in charge of city finances for the past 19 months, denounced such measures as increased assessment-producing revenue and diverting the Guelph Hydro dividend of $1.5 million as “robbing Peter to pay Paul.”

Instead, Mr. Amorosi said, the way to go was some form of a special levy that other municipalities are using. Fasten your seat belts folks; the BOS is ready to support a two per cent, ten-year property tax levy starting next year. It will raise more than $230 million.

This is a serious situation but will the administration do something about it?

Their selling point to us will be that it will create funding for needed infrastructure renovation. Even the Associated Municipalities of Ontario (AMO) have labeled Guelph’s infrastructure shortfall at more than $220 million.

Not so fast, Tonto. This requires a reality check. The city is faced with excessive operating costs, high debt, and mismanagement of operations, terrible budget forecasting, and a political atmosphere that is bringing the finances of the city to its knees.

Most voters are starting to realize how self-serving members of council, plus senior members of the staff, have abused them and their personal finances. This group’s political agenda has to be halted and replaced by a plan of common sense recovery.

There is no easy fix but a resolute and responsible administration will start the process of repair to a shattered financial and political agenda.

One thing is certain; there will be a tax revolt if council approves a tax levy of two-per cent over ten years on top of another three -plus per cent increases of normal costs of owning property.

The road of recovery lies only with cutting operational costs. The fact that two neighbouring cities, Kitchener and Cambridge whise operating and capital costs are 50 per cent lower that Guelph’s, points to the need for reduction of those costs

That includes, reduction of staff and realignment of responsibilities; chopping funding of special interest projects and lobbyists; capping salary and wages and benefits for two years; kill the CEI and District Energy project; reduce operating subsidies to Guelph Transit, the Sleeman Centre and RiverRun theatre; cease the bicycle lane expansion allocation; resolve to change the unfair University of Guelph’s property tax deal that pays $75 per student per year. It even fails to reflect the effect of inflation since inauguration in 1987.

It is time to take our city government out of the shadows and return competent financial management to city operations.

This includes hiring an independent Chief Financial Officer to put the train back on track.

It’s time.

If you feel the way that I do, drop me a line at gerrybarker76@gmao.com. Collectively, we can bring about refortm and change.


Filed under Between the Lines

The world according to Coun. Leanne Piper

By Gerry Barker

Posted February 16, 2016

The nine-year record of city Councillor Leanne Piper, reveals that when it comes to credibility, her record is wanting.

The following contains part her response to a letter sent by Glen Tolhurst that questioned the city’s financial administration.

But let’s review her nine-year performance as an elected member of Guelph city council. This includes her undying support of former Mayor Karen Farbridge who was defeated in the 2014 civic election. Recently, Ms. Piper denied the charge that there is division among councillor stating that most votes are not 7/6, but carry with a much greater majority.

She goes on to complain that those councillors and their supporters who complain about this situation are merely perpetuating division on council. That sounds like the pot calling the kettle black.

The real problem is she and her six colleagues are attempting to perpetuate the Farbridge agenda despite its repudiation by the city electorate.

We begin with her assertion that a 3 per cent tax increase does not affect those who pay taxes. Her explanation comes right from the professional staff playbook.

To quote her: “A 3 per cent increase in the ‘net tax levy’ does not mean that your taxes, or anyone else’s, are going up 3 per cent.” She proceeds to explain that 3 per cent is the increase from the previous year’s budget. Okay so far. Then she says that new and revised assessment adds to revenue. The combination of tax increase and new assessment results in the net tax levy. Both are used to determine the mill rate.

She neglects to explain how that ‘net 3 per cent’ does not affect the amount of taxes a taxpayer must pay.

Well councillor, you didn’t mention that for four years the Municipal Property Assessment Corporation (MPAC) did not increase assessments on orders from then Premier Dalton McGuinty. Despote the loss in revenue that did not stop your administration from increasing property taxes annually during that period. In fact, since the 2008 global financial collapse, you were party to approving excessive property tax rates and user fees that far exceeded the Consumer Price Index (CPI) of less than 2 percent per year. Did your associates and street sources not understand the impact on ratepayers?

Is it possible they are not taxpayers and don’t care?

Whatever happened to pay off the Urbacon $23 million cost overruns?

A stunning example of this disregard for reality is the statement of Chief Administrative Officer, Ann Pappert, that “the $8.96 million settlement with the fired Urbacon contractor of the new city hall, would not affect property taxes.” Most citizens are still waiting for answers to that statement cause their taxes continue to increase.

Coupled with the lowest rate of wage increases in 10 years, it resulted in excessive municipal taxation by your administration. Your lust for revenue translated in forcing many homeowners to struggle to pay their taxes and municipally controlled service fees such as power and water.

You closed your mind when data on city operations as reported by your administration and that of two adjacent municipalities, shows that Guelph’s operating and capital spending is 50 per cent higher than either Kitchener or Cambridge.

You obviously don’t understand the principle of exponential growth of self-serving, uncontrolled spending and its affect on taxation.

This analysis is the unvarnished truth as determined by Guelph resident Mr. Pat Fung, CA, and CPA., who presented his findings to council. At the rate the current council increases property taxes and spending, that gap of serious financial disparity, will widen in the next few years. Apparently, Ms. Piper doesn’t believe it or doesn’t want to. The data produced by Mr. Fung was taken from the official Financial Information Reports filed by the three cities to the province.

The result of this misguided municipal tax strategy has placed Guelph as one of the most expensive cities in Ontario in which to live.

Summing up, the main beneficiaries of the city corporation are its employees. With seven unions representing 2,100 city employees, all of whom enjoy wages, salaries and benefits that far exceed private enterprise.

In fact, the Guelph and District Labour Council is a major supporter of the previous administration’s elected officials.

Despite this self-serving body of workers’ control, the people rejected the policies of the previous administration by defeating the former mayor and four of her council who either quit or lost the election.

That vote sent a strong and clear message that the citizens wanted a change in direction of council and the administration.

You and your colleagues, including the remnants of the previous administration, are still in technical control of council. As a bloc, you steadfastly refuse to engage or agree with reforms that the public voted for. Excessive taxation tops the list of public concern.

It’s the epitome of arrogance, disdain and dishonesty in which you and your colleagues have shunned your fiduciary responsibility by glossing over serious financial problems. Not the least of which is the $23 million loss associated with the Urbacon lawsuit and its fall out.

Yet, you and your colleagues refused to attend a January 25 regular council meeting claiming that your actions were to “protect the integrity of the corporation and staff.” The five of you walked away from your responsibility refusing to represent the people who elected you.

And the real reason was, during a closed session, you and your colleagues realized you did not have the majority to get your way and you walked away.

What were you thinking? Did you believe that you were a trade union with some kind of collective agreement that allowed you to walk out? Come the next civic election be prepared to defend your service to the electorate.

And that’s the world according to Coun. Leanne Piper.



Filed under Between the Lines

A serious look inside our city budget and where your tax dollars are going

By Gerry Barker

Posted November 21, 2015

As part of its new budget building program, the city released proposals for expansions of staff in the 2016 budget.

Prior to this the city staff presented to council an operating budget proposing a 2016 property tax increase of 1.58 per cent. Let’s call that stage one, or the window dressing portion of the build a budget program.

The staff recommends several budget expansions, over and above the operations budget of 1.58 per cent. The most costly expansion is adding 16 fulltime equivalent employees across various departments. The cost is $2,629,600. This adds another 1.25 per cent to the property tax increase.

Stage Two: Kaching! Now we’re up to 2.83 per cent

The 50 per cent growth of city staff by 700 employees in eight years is compared to a 5.7 per cent increase in population. That’s an increase of 6,897 newcomers in the same period. Wonder if they get their waste picked up by the city?

Let’s look at it this way. Assuming the city population is 121,000 and there are 2,100 fulltime employees, that means there is one city employee per 57.6129 citizens.

Taking it a step further, for the 6,897 new residents arriving since 2007, the 700 new city staff hired during the same period, means that one city employee serves just 9.852 citizens.

This indicates that Guelph hired more new staffers than were needed to cope with the increase in population, a paltry 5.7 per cent in eight years.

But the city staff increased by 50 per cent in those same eight years.

So why does the city staff keep adding staff, on average, of 20 individuals in each budget cycle?

In the space of just six months, completing two budget cycles, 2015 and 2016, some 37 new employees are authorized. While the 2016 budget has not been finalized, it’s a safe bet the staff recommended 16 additional staffers will be approved.

Stage Three: Citizens get their chance to ask for money

But wait! Yet to come are the citizens requesting public funding at the November 30 public meeting. This is when the vociferous bike lane lobby swings into high gear to extend the network of bike lanes in the downtown core and major arterial roads. This is one of those Farbridge legacy hangovers that will be ardently supported by the Farbridge Gang of Seven on council. This group is trapped in an eight-year time warp that has witnessed millions spent to accommodate a tiny minority of bicycle riders.

Their pitch is to demand that council live up to the Farbridge sponsored ten-year plan to spend $1.3 million on bike lanes Reminder, the 2015 budget contains a $600,000 item for bike lanes on Woodlawn Ave.

It’s difficult to understand why driving through Kitchener and Waterloo, there is not the numbers of bike lanes on the major roads in comparison to Guelph.

There will be other organzations and individuals pitching council for money for a variety of causes and interests. Council will be polite with each petitioner, ask some questions but rarely commit, except if you ride a bicycle.

The final stage will be council’s final review of the 2016 budget and approve it December 9.

It’s a good bet that the 2016 budget will exceed a property tax increase of 3.5 per cent not including the increase in citywide property assessments that contribute to the bottom line.

Let’s take a look as these staff recommended expansions.

One that stands out is hiring a manager of city assets for $157,000. A second is hiring an asset analyst for $120,100. Total for the two jobs is $277,500. It is not clear where these two hires fit in and are they necessary? Is not the Guelph Municipal Holdings Inc (GMHI), responsible for managing city assests? That’s what the charter says and already has a general manager.

The Corporate Services department requires the following staff additions and programs:

An internal auditor – $133,800; Asset manager mobility specialist, $79,300; Information technician GIS program, $483,500; Clerk’s office, Access coordinator $86,800; Ward boundary review, (an election will not be held until 2018), $190,000; Contingency reserve $500,000; Stabilization reserve, $500,000.

It’s interesting to note that some programs all have the same $50,000 cost. Two are not recommended: Graffiti removal cotrol and the Goose mitigation strategy. City hall maintenance of $50,000 is recommended. Does that include the living wall?

The Parks department is a beneficiary of the staff recommendations. There is a parks planner, $56,050; an Arborist, $107,400; an Inspector Arborist, $130,700; Seasonal Horticultural crew, $69,600; parks infrastructure maintenance, $35,800; turf maintenance, $69,800; trails maintenance, $35,000; Adding two trails technicians costing $216,400. This adds up to $720,750.

The Farbridge-initiated Open Government Action Plan gets an additional $264,200 on top of the $92,000 approved in the 2015 budget. This money has boosted what was first a one-year contract job for Farbridge loyalist Andy Best. Apparently, the position has morphed into a three-year commitment.

So much for the integrity of the public service.

We have a Cadillac staff powered by a four cylinder engine

While the staff has taken steps to reduce spending, it still fails to address the real spending issue: The growing cost of the city staff is too much for the supporting tax base to afford.

It is not something that started this year. Under the Farbridge administration, staff numbers soared from 1,400 to more than 2,100. Some 37 new employees will have been hired in the 2015, and proposed 2016, budgets. The staff employment costs currently consumes more than 80 per cent of the tax levy.

Glancing over the proposed new staff group for 2016, many are specialists and management people, with compensation packages that are ahead of similar positions in private industry.

The comment made by Derrick Thomson, DCAO, in charge of operations is ludicrous. He says the increase of staff is required to serve more residents. In eight years, the population increased by 5.7 per cent. But in the past ten years, the city staff has increased by 85 per cent.

Just looking at this position, there is a whole crop of candidates for the provinces’s annual Sunshine list of those public servants making more than $100,000 a year.

This continuation of the staff setting the terms of employment is with little input from some members of council, or a responsible Chief Financial Officer (CFO). That job has not been filled since former CFO Al Horsman was moved to Waste Management, Planning and Engineering a year ago, and two budgets since. He left Guelph this past summer.

For additional information about this budget process, here is the link:

http://guelph.ca/wp-content/uploads/council consolidated-agenda budget 111815.pdf



Filed under Between the Lines