Municipal of Ontario Surprise

Municipal Surprise

The City of Ottawa was the second largest amalgamation (2001) of jurisdictions in the history of Canada and the NUMBER ONE screw up.

Even Toronto, for all intents and purposes, a financially bankrupt city, managed to better control employee expense during its reorganization term (between 2001 and 2007) than Ottawa, by a long shot.

Well, they say, “If the shoe fits, wear it.” Ottawa has the shoe horn now.

The big question is this. What Ontario municipality utilized the largest percentage of its New Revenue generated since 2001 to 2007 for Employee Expense?

Well, that was the City of Mississauga. Employee Expense devoured 104.56 percent of all new revenue generated since 2001-2007. That leaves the question as to the source of funding for the amount that exceeded 100 percent of revenue. Was it borrowed or was the savings account raided?

What Ontario Municipality utilized the largest percentage of Total Revenue in 2007 for Employee Expenses?

Well, that was the City of Mississauga. Employee Expense was 57.70 percent of 2007 Total Revenue. The City Council better shake its head.

Hazel McCallion has been Mayor of Mississauga since 1978. It looks like she and Council have been asleep at the switch. Despite the general impression that Mississauga is a well managed municipality, the above facts would question that reputation.

The average utilization of Total Revenue in 2007 for Employee Expense in the 19 largest Ontario jurisdictions was 38.80 percent. Now keep this percentage in mind.

Of the eight jurisdictions in Ontario with New Revenue over 1 billion dollars for the period 2001 to 2007, the City of Ottawa had the highest percentage of usage of that revenue for New Employee Expense. A whopping 72.24%! This is according to the audited financial statements, but differs from the Financial Information Report (FIR) where the results tabulate 81%.

The average usage of New Revenue for New Employee Expense during the same period for these eight jurisdictions was 43.59 percent.

Do you get the picture here? We are talking about hundreds of millions of dollars more for the City of Ottawa Employee Expense than other similar sized jurisdictions.

Ottawa entered amalgamation in 2001 with a percentage of 38.15 of Total Employee Expense to Total Revenue. In the year 2007, this percentage had climbed to 47.10 percent. There would have been over $500,000,000 (1/2 a billion dollars) to look after our roads and sewers and beautify the city etc.if the City of Ottawa had maintained that percentage throughout the period 2001-2007. Or heavens forbid, property tax or user fees increases could have been reduced. You get the picture. Employment Expense is the largest expense, but other spending remains to be scrutinized.

This $500,000,000 represents 50 percent of the current 2007 Property Taxes levied in the City of Ottawa. You can easily calculate the annual decreases in property tax that the city could have implemented if employee expenses had been maintained at amalgamation level. Don’t forget about all the other sources of revenue that the city has at its control. Refer to my July 22nd, 2008 report.

Toronto entered amalgamation in 2001 with a 46.55 percent of Employee Expense to Total Revenue and this percentage has remained relatively firm throughout the period 2001-2007. But wasn’t there to be a leaner, more efficient government? It didn’t happen in Toronto, or Ottawa or Peel or Halton, or Durham or Waterloo or Niagara Regions. York Region appears to be more disciplined.

Financial Data is reviewed for the following Ontario jurisdictions:

Toronto, Peel R, York R, Ottawa, Hamilton, London, Niagara R, Windsor Brampton, Thunder Bay, Halton R, Kingston, Mississauga, Barrie, Sudbury, Chatham-Kent, Durham R, Waterloo R, and Guelph

Financial information will be released on the individual jurisdictions in the future months.

When one looks at all of the financial numbers of these municipalities, you just want to shake your head, like perhaps the Mississauga City Council should have done. But a picture does come clear. Financial reporting in all Ontario communities must be standardized for the good of democracy and proper governance. I also wonder if councillors and mayors should be required to be certified by an educational institute prior to running for office. Incompetency is active.

Direct questions or comments to wmomalley@gmail.com


Bill O’Malley

Ottawa