Ottawa Community Housing

Ottawa Community Housing provides and manages affordable housing for low and moderate income households in Ottawa.

OCH is controlled by the City of Ottawa. The housing Group had revenue of $131 Million in 2009. Specifically, $62 Million was from tenant rents, $65 Million from the taxpayers of Ottawa and the balance was comprised of miscellaneous revenue.

To put it another way, Ottawa Community Housing spent $131 Million in 2009 and had earned revenue from rents of $67 Million. The annual shortfall of $65 Million was contributed by the property taxpayers of Ottawa.

Perhaps that is not so bad, considering the benefits from assisting those in need.

However, in this election year resident taxpayers should take issue with a few noteworthy items.

1) As of Sept 18, 2010, OCH has not published its 2010 budget on their web site. The year is almost over. Is there something wrong at OCH?

2) The 2011 OCH Budget must be consolidated with the overall City of Ottawa 2011 Budget. The financial results of OCH are included in the annual audited statements of the City, but are not included in the annual City Budget. This is just unacceptable.

3) The Mayor and Councillors that sit on the Board of OCH must explain to the electorate why OCH had $42 Million in marketable securities on its balance sheet in 2008 with an audited “Fair Market Value” of only $35 Million. That was a write-down of $7 Million dollars.

So let’s take a look at the investments. 1 and 2 can be resolved quickly by a Council directive.

Investments comprised the following:

Liquid assets, Government of Canada fixed income, provincial fixed income, municipal fixed income and corporate fixed income totaled $7,303,223 of the $42 Million in investments. For the most part, these are conservative investments.

The Auditors noted that OCH is subject to market risk, foreign currency risk, and interest rate risk. This should not be.

The remaining investments are in this category, namely:

Canadian common equities ($2,522,528- year end value of $2,584,920):

Foreign common equities ($16,455,320- year end value of $11,866,647)

Mutual Funds ($15,551,865- year end value of $12,778,978)

Why is OCH involved in these investments?  OCH had to buy these risky investments, so it is presumed that somebody made commission on the sale to OCH. Who made the commission? What was the idea of putting funds into these risky investments and ignoring necessary repair of rental units?

In 2009, $20 Million of these investments were sold. That is good, but at what cost?

Council has an obligation to put in place preventative measures that would restrict this type of investment in the future. Council must also let the electorate know the details behind the reason for these purchases rather than investments in rental housing repairs.

There is no good reason for OCH to do anything other than provide and keep rental units in good repair. They must keep their nose out of these irresponsible investments.

Bill O’Malley

Ontario Financial Information Municipal Report

Ontario municipal elections are slated for late October 2010 and other than the Toronto race, things have been quiet in Ontario.

I think that the battle is about to begin though.

However, there is a problem.

The majority of Ontario municipalities have issued their audited financial statements, but the “meat” of the information which is contained in the Provincial Financial Information Report (FIR), has not been posted to the Ontario Municipal Affairs and Housing website (except for a few smaller municipalities). The information is public under the Municipal Performance Measurement Program.

Jim Watson, the liberal candidate for mayor in Ottawa was the minister of this department until recently (he resigned his provincial cabinet post to run for mayor of Ottawa) and I cannot help being suspicious of the delay. What is going on? The voting public needs this information as do the candidates for council. You can refer to it as the “Stewards Council”.

McGuinty has delayed the release of critical information before and it appears that this is another example. The MMAH staff have communicated with me and they blame the delay on new data (City assets and depreciation) which is now included in the report. My research on 2009 FIR information released to date for some of the smaller Ontario municipalities reveals that no delays are warranted as the added information has been audited in the released financial statements of each Ontario municipality

This is unusual. I can only tell you that this is an infringement on democracy.

Municipalities in Ontario are in trouble and it is only for “one main reason”. Salaries, wages and benefit expenses are increasing at an unsustainable annual rate. Of course there are other problems, but there is no use tackling the other inefficiencies unless the employee expense is corrected. Some politicians and media are giving up and saying that you can’t fight the unions and left leaning Ontario arbitrators. You can’t fight a Premier that has shown his lack of stewardship in Ontario. I disagree.

It is only McGuinty, the Premier of Ontario that can resolve this problem. As you may know, the Premier has alluded to a public service wage freeze in Ontario for next year. This is a must and should happen “now” rather than later, but don’t hold your breath. McGuinty is only positioning himself for the next provincial election and nothing will come of this issue.  

Municipalities cannot freeze wages on their own. It requires provincial approval. Don’t let would-be councillors (Stewards of our money) tell you they will freeze wages! They can’t.

So what are we going to do in our voting pattern in the upcoming municipal elections?

First of all, population growth in the Province has been meager for other than a few municipalities and the city of Toronto, which is affected by immigration growth. Employee costs however, are going up like a rocket.

Action is needed everywhere!

1) Municipalities with normal growth can “freeze” hiring. They can remove all authorized positions that are currently unfilled, off the table.

2) Next, municipalities can identify employees that are working in positions that are “nice to-be positions”, but not necessary for the basic operations of the municipality and lay-off these individuals on the basis of a “scale rating” of the importance of the job.  Municipalities are providing services that are not necessary in the operation of the city.

3) Most municipalities hire outside consultants to prepare studies and reports that are not essential to the operation of the city. In most cases, these consultants are hired only to protect the rears of senior management. If senior management cannot perform their function, replace them quickly.

4) The City of Ottawa and other municipalities must terminate the policy on “fair wages”. In reality, this policy favours the unions and not the taxpayer. This is contrary to the Ontario Municipal Act. The fair wage policy imposes levels of compensation on companies doing business with the City. The policy preempts competition, paving the way for a more socialist society than what we have today. We must get back to the basics of democracy.

5) Pension and other benefits are too rich for the taxpayers and are far better that anything available in the private employee market. And it adds insult to injury where a pension shortfall (due to risky investing in the stock market), is automatically covered by the taxpayer in the manner of increased taxes. Municipal politicians must change this. There must be more competition when purchasing benefits from the banking and insurance industry. If you check your local municipality you will find that competition is a non event.

And in the City of Ottawa you cannot access any financial information for the past several days. Why? There has been an updating of the site presentation format recently, but why is it that only the financial information is not accessible?  I don’t believe in coincidences so who is doing what? Someone better ask senior management.

Bill O’Malley

City Hall Budget Numbers Do Not Balance

I voiced my concern in January and April 2010 that the 2010 Ottawa Budget numbers for salaries, wages and benefits did not balance with the relative numbers in the 2008 audited financial statements.

This revelation raised much concern at City Hall. After denials and insults from the City, Staff finally explained that the 2010 salaries, wages and benefits budget did not include employee expense associated with the Rate Supported water and sewer operations, our local boards and agencies, such as Ottawa Community Housing Corporation, and adjustments for post retirement and post employment expenses.

This is all well and good, but the annual city budget must include “all” consolidated revenue and expenses. Otherwise, what is the use of having a partial budget?

I told you so.

My prediction was that the 2009 audited financial statements would reflect employee expense  at $1.3 Billion Dollars or so. Well, the recently released 2009 audited financial statements reflect this expense at $1,258,000,000. So my projection was off slightly, but certainly not off the point that the 2010 Budget and 2009 audited financial statements for employee expense did not add up.

In the adopted 2010 Ottawa Budget, the “Actual” figure for 2009 employee expense, including overtime, was $1,185,650,000. The audited 2009 audited financial statements reflect $1,258,000,000 in employee expense.

Now, that really makes my point!

There is a difference of $72 Million dollars between the 2009 budget figure and the 2009 audited financial statements, and Ottawa residents want the difference identified.

Ottawa Council must present an annual budget that includes all operations of the City and operations owned by the city, including all boards. This is a democracy for heavens sake and it is an absolute insult that this critical information must be dragged out of Council.

Or, were Council Members aware of this?


Bill O’Malley

The Party at City Hall is Over

 

                                  What a Party It Has Been!

Anyone running in the Ottawa municipal election this fall should be aware of the preliminary financial results for 2009 and the comparative financial figures from the year of amalgamation. If elected, you will be a “Steward” of the taxpayer’s money. You will have a major job to perform in cleaning up the financial mess created by those councillors that have more than 8 years on council. Every one of them is to blame because they have not spoken out on the subject.

Also to Blame:

-Not the current Mayor. He spoke out about union wages and benefits and paid the price.

-Senior Management for incompetence and inefficiency

-Greedy Greedy Public Sector Unions

-And, the McGuinty government for allowing outrageous wage and benefit settlements in the Ontario public sector that filtered down to Ontario municipalities by unelected and irresponsible, so called, arbitrators.

Ottawa is the worst performing municipality in Ontario considering financial results in two categories of expenses: (1) Salary, wages and employee benefits and (2) Contracted Services. This takes into consideration the official growth in population in the City of Ottawa between 2001 and 2006 by Stats Canada of 4% and estimated (liberally) at 4% since the census to the end of 2009. The population growth of 8% during the 2000-2009 period is miniscule compared to the growth in city revenue and expenses.

The following financial figures do not include the extremely generous “unfunded future employee benefits” which will keep the taxpayers in the poor house for years to come.

The financial figures represent a summary of the position of the City of Ottawa. The “drilled down” numbers for the comparative period will be available for resident taxpayers and individuals running for council, no matter what your political thinking may be, in the very near future.  Simply put, Ottawa cannot continue to increase taxes and user fees and hand over this money to employees and consultants and contractors.

Take a hard look at the numbers and ask yourself the questions: Think about low interest rates, low inflation and the efficiencies that were promised by Bob Chiarelli.

The Highlights:

Annual Revenue in 2009 is $953 million higher that in the year 2000

The Category: Salary, wages and benefits is $593 million higher than in the year 2000

The Category: Contracted Services is $116 million higher than in the year 2000 (2000 is estimated at $60 million)

These two expense categories accounted for 75% of the expenditure of the additional revenue generated.

Please note:

Financial figures are compared from the day of Amalgamation (Dec 31 2000) to December 31 2009 unless otherwise indicated by *.  Some classes of revenue and expenses have been reclassified as demanded by the Province of Ontario. See Note 18 in the 2009 audited financial statements.

Comments to wmomalley@gmail.com

Municipalities Out Of Control

Source: Audited Financial Statements
City of Ottawa
As at Dec 31st							%
000’S	Amalgamation						Increase
	Date
Revenues	2000		2004		2009
Net taxes available for municipal purposes	$934,243		$1,059,355		$1,286,044		37.66
Fees and User Charges	$375,232		$467,690		$623,350		66.12
Government Grants	$276,127		$363,975		$471,419		70.73
Investment Income	$45,158		$40,448		$26,071		-42.27
Contributed Tangible Capital Assets	N/A		N/A		$145,296		N/A
Interest from Ottawa Holding Inc.	N/A		$16,455		N/A		N/A
Equity in earnings of government  business enterprises	N/A		$19,659		$29,414 *		49.62
Fines and Penalties	N/A		$18,767		$23,567 *		25.58
Development Charges	$11,144		$47,052		$81,392		630.37
Other Revenue	$101,365		$30,321		$10,369		-89.77
Total Operating Revenue	$1,743,269		$2,044,063		$2,696,922		54.70
Operating expenditures by object							%
	2000		2004		2009		Increase
Salaries, wages and employee benefits	$665,004		$922,292		$1,258,156		89.20
Contracted and general services	$0		$86,219		$176,315 *		104.50
Materials, equipment and supplies	$329,343		$296,878		$500,698		52.03
Interest charges	$55,164		$61,462		$64,594		17.09
Rents and financial expenses	N/A		$35,537		$51,634 *		45.30
Third-party social, cultural and recreation programs	N/A		$313,153		N/A		N/A
Capital Expenditures	$311,963		N/A		N/A		N/A
Other	$356,047		N/A		N/A		N/A
External Transfers	N/A		N/A		$335,185 *		N/A
Amortization	N/A		N/A		$208,205 *		N/A
Expenditures recovered from capital	N/A		-$28,855		N/A		N/A
Total Operating Expenses	$1,717,521		$1,686,686		$2,594,787		51.08

The Great Canadian Census Debate

Canadian Census Blog

Munir Sheikh, the chief statistician of Statistics Canada abruptly quit, resigned, retired or was fired from his government job this past week. It appears that he actually quit in protest to the government’s position in abolishing the mandatory long-form census questionnaire. Sheikh issued a statement on leaving his position indicating that a mandatory long form census questionnaire was necessary to obtain accurate census data.

Number one is that Mr. Sheikh politicized his government job by issuing that statement. Government employees cannot play partisan politics with their government position. They must follow the wishes of the government of the day or pay the penalty. Mr. Sheikh deserves to be penalized for his very public opposition to the change in government policy over the long-form census questionnaire.

Number two is that Mr. Sheikh played willfully into the hands of the partisan media like the Globe and Mail, CBC and other elitist groups in Canada that consider themselves Royalty. Dam the people.

While other countries are moving to abolish any kind of a census, the media and elitist groups, unrepresentative of the people of Canada, are bulldozing their way to manipulating census opinion by half truths and outright lies.

All of the citizens of Canada should be educated as to the questions asked in the long-form census questionnaire. A good start for the media is to publish the questions asked in the last long-form census and then let the people decide if the questions deserved to be answered.

The last long-form basically asks you to reveal every financial detail about your household and your employment history and even goes further by asking your permission to access your income tax return. The media is purposely leaving this aspect of the long-form from their discussion of the pros and cons of the value of the information.

Rather, the media is misleading the public by referring to unimportant questions on the long-form that ask for information about how many rooms you have in your house and what time do you leave for work in the morning.

The elitist groups in Canada and the media have to level with the public. The provincial and municipal governments already have more than sufficient information in their hands to make informed and enlightened decisions on various aspects of local development without financial information from the long-form census.

Further, we are equal under the laws of this country and if 20 % of the population was required to answer questions in the previous long-form census, than in the up and coming census, 100% of the population must answer the long-form. Otherwise, this becomes a Charter Issue.

And Statistics Canada have stated that your in-depth revelation of financial data is secure in the hands of 6000 Stats Can Employees and to the elitists that buy the information from Stats Can.

Bull:


Bill O’Malley

Ottawa Annual Budget Contents

 

Declaration of annual budget content is necessary!

City of Ottawa

April 16^th, 2010

The controversy over the recently adopted City of Ottawa 2010 Budget (Jan 2010) is still unresolved.

The “partial” budget increased property taxes by 3.9 percent.

A few days ago (April 2010) Council adopted the 2010 Water and Wastewater Budget with a rate increase of 9 percent.

Have you had a chance to comment on the Water Budget before it was adopted? Where are the detailed comparative annual numbers for the Water Budget? I haven't seen a production of the information yet. The 9 percent increase is despite the fact that water consumption has decreased due to family taxpayer's great conservation attitude. The result for you. You conserved too much water so the city is going to go for a minimum charge and then soak you for anything above that. You pay more because you used less water.

The combined Property and Water TAX increase is somewhere around 6%, and totally ridiculous. Councillors just didn't want you to know the real percentage increase in taxes that you were facing.

Now, I don't know about you, but if you are preparing a budget all relevant categories must be addressed in that budget. A budget is not a budget if the budget is only part of a budget.

Councillor Peter Hume seems to think that having one budget, but really having two budgets, without informing the taxpayer, is just fine. Too bad he will not be running for Mayor in the upcoming 2010 municipal election. If he did, he would finally have to look for a real job.

Without notifying the resident taxpayers, Council and Senior City Staff separated the budgets into what is called (1) a “Taxpayer Support” Budget and (2) a “Rate Supported” Budget. Isn't a taxpayer and a ratepayer in the City of Ottawa the same person? The cost of city operations come from the same pocket. Your pocket!

If you are a resident taxpayer, renting rather than owning your property, you pay 1.7 times the tax rate of property owners. And you don't think you have a voice! You use less space, use fewer costly city services and you are privileged to pay a premium for your conservation. This is becoming a trend. You can add water and electricity to this trend. Then you can add property taxes. The more you conserve, the more you pay.

Two or even three separate budgets would be appropriate only if all of the separate budgets are consolidated into ONE OVERALL BUDGET, to be voted on at the same council meeting once each year. This would reflect some respect for the taxpayer.

The budget questions arose in Jan 2010 when I indicated in my Blog that the 2010 Budget for salaries, wages and benefits (employee expense) was reflected at $1,221,997,000 while the 2008 audited financial statements stated employee expense at $1,176,349,000 in that year. As employee expense is rising at approximately $60 TO $70 million a year (can you imagine) at the City of Ottawa, the 2010 budget figure did not make any sense. Do the math. The 2010 Budget should have reflected total employee expense at approximately $1.3 Billion dollars or approximately $78 million dollars higher than budgeted. That's a lot of money!

During the controversy, OTAG (Ottawa Taxpayer Advocacy Group) and our local CFRA radio asked city staff and/or councillors to clarify the matter and this is what was offered. Again, it was Councillor Wilkinson that took the “bull” by the horns and dragged the answer from City Staff. She has the right attitude which is important, but I am continually surprised by what City Councillors do not know. She has my vote.

City Staff responded as follows to the difference in numbers between the audited financial statements and the annual Budget:

1.      The Tax Supported Budget does not include the employee expenses associated with the Rate Supportedwater and sewer Budget which are  included in the financial statement number
2.      The audited financial statements include the expenses of our local boards and agencies, such as Ottawa Community Housing Corporation
3.      The audited financial statements include numerous accounting adjustments for post retirement and post employment expenses which are required under the Public Sector Accounting Board reporting requirements.

It is unfortunate that Council did not inform the taxpayers of Ottawa of these facts prior to discussions of the 2010 Budget.

Therefore, be it resolved that, the 2011 Budget must include the following and be so declared by Council prior to 2011 Budget discussions:

Tax Supported Budget projections

Rate Supported Budget Projections

All Local Boards and Agencies budget projections

Projections for retirement and post employee expenses.

This means that all departments, agencies, boards and rate supported programs submit and incorporate their individual budget projections in the annual BUDGET DISCUSSIONS. Further, that requires a directive to these groups by Council. As a result, the information will be there for all to see, question, agree with or dispute. This is democracy.

Council must also require all other organizations, held by investment or otherwise that changes in fiscal year ending and Budget submission dates must compliment that of the City of Ottawa. Those Organizations or Investments must also make their financial data available to the taxpayer.

Bill O'Malley