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