By Gerry Barker
Posted February 12, 2016
It’s the dirty secret that is driving up operating costs. So far, council refuses to tackle it or even listen to valid points describing the sorry state of financial management and the cost to the citizens.
It’s the untouchable cost of running a city after nine years of non-stop wages and benefits growing exponentially exceeding the Consumer Price index (CPI) by a country mile. Throw in the more than 500 new, full-time equivalent employees added in that time, and taxpayers are being forced to ante up every year to keep up.
The truth is that 80 per cent of the property tax levies goes to pay the city staff.
So when the staff submitted its estimate of the property tax increase for 2016 of 1.58 per cent to city council, it was a mythical, contrived figure that had little basis of reality. It’s the equivalent of the workers at Linamar telling the management how much they think it’s going to cost to produce car parts.
So they scare council’s majority, who support the nine civic unions, by saying the Guelph Transit fares are going up and weekend and holiday service will be reduced to save $1.5 million. Compared to the 2013 Guelph Transit overtime bill of more than $5 million, that’s chicken feed.
Oh, woe is me! Says Coun. Phil Allt who again, insists Guelph has to get cars off the road and only public transit is the answer. So the left-brain cramp of some members of council, is maintaining the “war on cars” that beats on.
It’s all part of the senior staff game to serve and protect … their interests, not those who must pay the bills. And there are a number of senior managers that don’t even live or pay taxes in Guelph.
In the past ten years, the growth of Guelph city staff exceeded the growth of our population by 85 per cent.
It’s not just occurring in Guelph
A report by the Canadian Federation of Independent Business (CFIB) says in part that: “We have been hearing about cities having a revenue problem, but it’s clear it’s a spending problem they are dealing with,” said Laura Jones, CFIB executive vice president.
The CFIB report states that a municipal employee in Canada is paid 22 per cent more than an employee in the private sector doing the same job.
“When you look closely, it’s easy to see employee compensation is the root of the municipal spending problem,” said Nina Gormanns, co-author of the report.
This report comes in concert with the Fair Pensions for All organization that has been warning municipalities, for many years of the risks of increasing the size of staff and the increasing benefits paid to those workers.
In fact, the organization presented a documented report to the former Farbridge council, indicating the growing pension liabilities the city was facing. It was ignored and a number of Farbridge followers ridiculed the findings.
The staff strategy to use Guelph Transit to reduce costs in 2016 instead of recommending staff reductions, backfired when the council majority of seven voted to reject Transit fare increases and service reductions.
City consultants warned of reserves depletion
The city recently commissioned a consultant report to review city operations.
The BMA municipal consultants are not unfamiliar with the way our city is being managed; having done a similar report in 2011 that cost $480,442 to complete.
This year’s report raised a “cautionary red flag” on the underfunded reserves. Those raided reserves have had little replenishment since the 2014 civic election as was promised by senior staff.
You cannot raid three reserve funds to pay a lawsuit liability of $8.96 million without a firm plan to pay the money back. In approving the 2015 budget last March 25, Coun. Karl Wettstein, the elder statesman of the Gang of Seven on council, made a motion to reduce the $900,000 scheduled repayment to the reserve funds to $500,000. That passed.
Councillors Wettstein, Leanne Piper and June Hofland were on the Farbridge council that witnessed the firing in September 2008 of Urbacon Buildings Group, Corp., the general contractor of the new City hall.
They have never accepted responsibility for that action that triggered a $23 million cost overrun of the project. For that matter, neither has the former mayor ever admitted any responsibility. The people understood and voted the mayor out of office.
The 2016 budget, approved December 10 included another 2.99 per cent increase of property taxes, plus user fees and more staff.
During budget talks, council buried a staff recommended 2 per cent, ten-year special property tax levy to pay for the city’s ailing infrastructure. It was kicked away to be discussed in the 2017 budget discussions next November.
The 2017 property tax increase prospect, next November, is that if the special levy is approved, plus the storm water levy, plus the 4.5 per cent water use increase, the annual property tax increase in Guelph for 2017 will be more than 9 per cent.
Transferring operational costs to debt can reduce tax increases. It is a glaring example of financial mismanagement that has been practised in this city for far too long. If we ran out lives the way this city is being run, we’d be bankrupt in short order. Swallowed by personal debt used to pay the bills.
Oh! Regardless, that’s what staff did this year.
And that folks, is just one of the reasons why Guelph’s operational and capital costs are 50 per cent higher than Kitchener and Cambridge. It’s why Guelph spends $28,000 per kilometer on road repair and rehab than the provincial average of $11,000. Bike lanes anyone?
These figures are extrapolated from the official annual Financial Information Reports filed annually by every municipality in Ontario to the province.
Figures don’t lie but liars figure…Go figure!
Maybe that’s why the city changed auditors this year.