Ottawa Housing Service 2011 Draft Budget

Ottawa Housing Service 2011 Draft Budget

Jim Watson was the Minister of Housing for Ontario prior to resigning his seat and running for the position of Mayor of Ottawa.

So it is not surprising that the Ottawa Housing Department has been moved from Community and Social Affairs Committee to the Planning Committee. The move doesn’t make any sense and Jim Watson has to be questioned directly about it. There is something sinister going on here.

The 2011 budget calls for 61 FTE  (employees) at an average salary of $102,459.00, up from $76,582.00 in 2005. This is the typical 6 percent annual increase in employment expense experienced in almost every City of Ottawa department since amalgamation. FTE has declined from 67 in 2005 to the current 61 proposed for 2011 in the Ottawa Housing Service Department. So there is clearly something wrong here, but no one wants to talk about it.

The real story! It’s the revenue versus the expenses.

The revenue consists of $146,878,000, all from you, the taxpayer:

 $88 million from the municipal taxpayers of Ottawa

 $29 million from the taxpayers of Ontario

 $29 million from the taxpayers of Canada.

And this is where the money is spent:

2011 Expenses

Manager's Office $577,000 Housing Programs $103,898,000 Family and Emergency Shelter $18,432,000 Affordable Housing $408,000 Domiciliary Housing $9,257,000 Homeless support $7,124,000 National Homeless Initiative $7,352,000 Service Innovation -$170,000
What’s missing from the above numbers? We need to know the breakdown of expenses for each category. I think that is reasonable. If you want to spend  $104 million this year on the Housing Program category,  provide the details please. I am not sure why our municipal tax dollars are being  spent for a National Home Imitative. Councillors  will have to figure this out and report  back to the taxpayer. And that leads to questions about the operations of The  Ottawa Community Housing Corporation, wholly  owned by the City of Ottawa. As noted in my previous writings in 2010, the 2011  Budget for this Corporation must be incorporated into the overall city budget and preferably, within the  Housing Service budget. This our money. The Ottawa Community Housing released its 2011 draft  budget on January 13th, 2011. I wasn’t impressed.  The  Corporation is projecting average manageable costs per  unit at $2,923.00. Manageable costs include administrative and maintenance  salaries and benefits, maintenance overhead, maintenance  materials and services, insurance and bad debts. There are  1044 units. I find the cost per unit extremely high.  and will  research available information on other similar operations  across the Country and report on the results in the coming  weeks. In the meantime, Jim Watson or senior management have  to explain why the Housing Service Department has  moved to the Planning Committee. Bill O’Malley

Ottawa Public Works-Notes.

 

Sometimes, as I am reviewing the data from the operations of the City of Ottawa, my head involuntary moves from side to side. The numbers are that unreasonable.

Take for example numbers from the General Manager’s Office. In 2009, there were 19 authorized FTE (employees) and annual employment expense of $1,490,000 or an average per FTE of $74,421.

For 2011, FTE has decreased to 17 yet employee costs increased to $1,748,000 or $102,823 per FTE. My friends, that is an increase of 38 percent in just 2 years. What is going on?

If we skip over to Traffic, Management and Operational Support,

We find that there has been virtually no change in the number of FTE over the past two years, yet employee expense for 2011 has rocketed by 12.35 percent. Geez!

Bill O’Malley

Transportation Committee-Public Works

Transportation Committee

Public Works

There are 6 sub-departments in this group.

Roads and Traffic Maintenance

Traffic Management and Operational Support

Public Works General Manager’s Office

Transportation Planning

Fleet Services

Parking

We will commence this section with a short overview of the total department.

Overview:

Public Works wants to spend $234 million in 2011. Of this amount, revenue from fees and services and other recoveries will reduce the amount to a net expense of $136 million of your property tax dollars. It will take 1100 employees to run the operation, each employee costing an average of $81,026. Employment costs are projected to increase 10 percent for the years 2010 and 2011. There is no significant increase in employees since 2009. Please take note!

Roads and Traffic Maintenance

This sub-department is projecting Gross Expenses of $131 million, less recoveries and revenues, netting an expense of $116 million. They want to spend $55 million on employee costs, $43 million on material and services and $27 million on fleet services. There are 691 employees each costing the department $80,228 in 2011.

The requested average employee costs are 12 percent higher than 2 years ago (2009).

We should stop here and think about the unreasonable escalation of these expenses. In general, City of Ottawa employee costs have been increasing at an average of 6 percent every year since amalgamation. The employee expense is some 53 percent of the total City of Ottawa budget. That’s translates into an annual increase of some $70 million year. A 2.5 percent property tax increase this year will not cover this expense. There are ways to make up the shortfall, but it won't be from other expense reduction in other categories. It will be from User Fees, fines and penalties, gas tax or other government grants from the provincial and federal governments. It is obvious to all but senior management and councillors that something has to be done to reverse this dangerous trend.

Material costs in this department are “flat”since 2009, but Fleet costs are projected to increase 9 percent for the years 2010 and 2011. How does a sub- department spend $27 million in one year on fleet costs?

Well the answer is that $23 million is attributed to “fleet maintenance costs”. The 2011 costs are 12 percent higher than the close of business of year 2009. Is the rolling stock falling apart or what? Management needs to examine fleet costs soon.

General operations expenses are 11 percent higher than 2009.

These three expenses make up the lion share of the total expenses.

You should not have any difficulty recognizing the problem. You might want to ask your councillor more about the operations in this department.

Bill O’Malley

Ottawa Public Health

 

Ottawa Public Health and Long Term Care

 

Important subjects, right?

Provincial legislation or not, these two departments have no business extracting funds from municipal taxpayers. Health care is a provincial responsibility under federal law.

The province refunds the municipality for the lion’s share of expenses, but the two departments will have a drain on Ottawa resident taxpayers to the tune of some $24 million this year as outlined in the 2011 draft budget.

Back in 2001, these two departments operated as one.

Ottawa Public Health

Responsibilities have expanded over the past 10 years. Still, those responsibilities should not be paid for from your property tax.

This separate department had a gross expenditure of $20,315,000 in 2001. The province paid for $8,334,000 of the expenses and there were recoveries of another $2,800,000 from other areas. It still required $7,975,000 from the Ottawa taxpayer to balance its books.

2001 salaries, wages and benefits for 239 employees consumed 71 percent of the gross expenditures. Average annual salary was $60,414.00.

In 2011, the Department wants to spend $52,828,000. That’s a 150 percent increase since 2001. Of the gross expenditure, The Ottawa property taxpayer is being asked to cover $13,094,000.

The department has grown from 239 employees in 2001 to a projected level of 505 employees in 2011 or a 111 percent increase.

Average annual salaries would be $86,035.00

Even though the province funds a large portion of the expense, it is our tax dollars in either case. Growth in this department is far beyond residential growth and is a symptom of the ills in our total health system.

Long Term Care

On the other hand, growth in this separate department over the same years has been neglected. It is a case of getting your priorities right. The people requiring long term care have been ill served.

In 2001, there were 537 employees in the Long Term Health Department. In 2011, 576 employees will be required.

Everyone knows that the demographics have indicated increasing demand for this type of care, but priorities have been misplaced. The municipality would rather spend more money on advocating non-life-threatening health issues through the Public Health Department than spending money on people that need care in order to survive.

You can see the difference when you compare salaries with the two departments. Long Term Health employees will have an average salary, including benefits, of $51,705.00 in 2011, while the public advocacy group will have an average salary, including benefits of $86,035.00. It really doesn’t make any sense when comparing the number of employees or employee costs.

The new Ottawa Council should really look at the priorities in these departments.

Bill O’Malley

By-Law and Regulatory Services

By-Law and Regulatory Services

Well, well, well!  Surprise, surprise, surprise!

This department is strictly about making money. It has no other mandate. The By-Law department has grown more than any other department at the City of Ottawa. Revenue has grown rapidly every year since amalgamation, and the number of employees in this department has too.

 The revenue is a tax grab against unsuspecting citizens and has nothing to do with maintaining good order in the City of Ottawa, nor protecting anyone.

If you wanted to downsize a City of Ottawa department, this is where you start.

Look at these numbers:

Annual revenue has grown from $3,506,000 in 2001 to a 2011 budget figure of $23,825,000. 

That’s 579 percent!

Ottawa is a city comprised of mostly intelligent and educated citizens with an average annual income above the majority of other Canadians.

Are the citizens of Ottawa so abusive in respecting by-laws issued by Ottawa City Council that would account for this growth in revenue? I don’t think so. What it is, is an aggressive application of by-laws in order to grow the number of employees in this department by continually contributing excess revenue to the general coffers of the City of Ottawa. It is the gravy train for senior management and Council and this department can pretty well do what ever it wants.

Excess revenue (that is money that many unfortunate citizens have to pay) will total some $18 million dollars just for the period 2009-2001.

The Budget for 2011 reflects total revenue at $23, 825,000 and expenses at $18,204,000. Excess revenue is $5,621,000.

So let’s look at some of the expenses.

Employee costs make up 74 percent of the total expense of the department.

Annual employment expense has grown from $3,370,000 in 2001 to $13,427,000 as reflected in the 2011 Budget. That’s a 298 percent increase during the 2001-2011 period. Think about it. Does it make any sense?

Fleet costs (automobiles) will cost this department $1,069,000 in 2011. That’s a lot of money! How many of the vehicles are owned by the city and how many of them are leased?  What a waste of money.

The only other expense of any consequence is that of “material and supplies”. This category has grown from approximately $800,000 in 2001 to an annual expense of $2,815,000 in 2011. Wow! I wonder what they buy annually for $2,815,000? Tickets! They need to print a lot of tickets to issue every day. And maybe a few computers and desks to add up the daily bounty.

It should come as no surprise that the number of department employees has grown since amalgamation. In 2001, 69 FTE was sufficient to effectively enforce the By-Laws of this city.

In 2011, it will take 180 FTE to do the same job. That’s a 161 percent increase in employees.

Now what kind of money do these people make? Well, for the year 2011, the average employee expense will be $74, 594.00. That’s a big cost just to hand out tickets. In 2001, the annual cost per employee was $48,840.That’s a 53 percent increase over the period. Nice if you can get it.

The By-Law and Regulatory Service Department must be downsized. There is just no need for the number of employees in this department. Expenses for material supplies and fleet services are simply too high. The Auditor General should be auditing this department with an aspect to making recommendations to make it more efficient.

Bill O’Malley

Paramedics 2011 Draft Budget

Paramedics 2011 Draft Budget

Transit, Fire, Police protection and Paramedic Services are very important elements in base City services, but at a reasonable cost.

A trend has developed whereby these services are expanding far in excess of the population of the city. Employee costs make up the lion’s share of the total expenditure and the increase in this cost is far in excess of those experienced in the private sector.

That’s the facts!

In 2002, under a different name, the budget for paramedics was $29,307,000. Employee expense was $23,186,000. The number of employees totaled 348.

In 2011, the draft budget for Paramedic Services reflects a gross expenditure of $69,760,000 with $57,303,000 of the amount expended for employee compensation. Total numbers of employees on hand or to be added in 2011 are 600.

So what we have again, and again, is in this situation, the gross expenditures increasing by 138 percent in 8 years and the employee expense increasing by 147 percent, while the number of employees increased by 72 percent.

In 2011, the gross expenses are offset by grants from The Ontario Government of $37,567,000 and various fees of $280,000. But folks, this is our tax money, municipal or provincial. The cost doesn’t change.

Average compensation cost in 2002 was $66,626.00 and in 2011, the draft budget employee cost is $95,505.00. Nice if you can get it.

Bill O’Malley

The Ottawa City Police 2011 draft budget

 

The Ottawa City Police 2011 draft budget

This is another story about “entitlement” to taxpayer’s cash for excessive levels of employee compensation. It applies to the City of Ottawa Police Service, Toronto Police Service and other service boards in Ontario, including the Ontario Provincial Police.

In Ottawa, it is apparent from the number of policeman with salaries, not including benefits, reaching well in excess of $100,000 annually. All of the individuals of various ranks are listed on the annual Ontario Government report for each city, of salaries over $100,000. It is troubling to say the least.

For the City of Ottawa, the police had a total budget of $128,818,000 in 2001. In that year, employee costs were $108,158,000 or 84 percent of the budget. The number of civilian and police officers in 2001 totaled 1,486. That’s $72,785.00 average cost per employee.

Fast forward to the 2011 draft budget and we find that Gross Expenditures are $258,013,000, revenue of $19,175,000. The revenue comes from the Federal and Provincial Governments (your tax dollar) and $8,837,000 in projected fines. So much for the rumour about quotas for fines!

Therefore, this means that the financial requirement for the operation of the City Police has increased 104 percent in the period 2001 to 2011. How can that be? Continue reading!

Projected employee costs in the 2011 draft budget totals $210,159,000 plus overtime expense of $5,375,000 or $215,534,000. That’s 83 percent of the Budget, approximately the same as in 2001. The number of civilian and police officers for 2011 total 1,946 or $110,757.00 per employee. This figure is actually low for the police officers. Civilian salaries are lower.

So let’s see what is happening. The growth in the number of employees from 2001 to 2011 is 31 percent. That’s much higher than the population growth. And even with a 31 percent growth in employees, the total compensation costs increased 67.3 percent. And the total budget requirement has more than doubled.

This is called “entitlement”.

The City of Toronto Police Department expenses 90 percent of its total budget on compensation, the City of Ottawa at 84 percent, the City of Ottawa Fire Services at 90 percent. You begin to see the problem. And this problem must be resolved soon.

What we haven’t tackled are the unfunded future pension costs for the Police Department. This is a disaster in waiting.

The Ontario Provincial Police “ Brother’s” Union appear to be the “lead” in manipulating municipal police compensation and it is past the time that the Ontario Government rectify this unsatisfactory situation now.

Do you know of any other organization or private business that can expense upwards of 90 percent of its earned revenue on employee compensation? I don’t think so.

Taxpayer’s dollars are there for the taking and the barrel is never empty. Or so you think.

Bill O’Malley

The Ottawa Fire Services 2011 Draft Budget

 

The Ottawa Fire Services 2011 Draft Budget

The Ottawa Fire Department expects revenue of about $688,000 in 2011 from various service levies. Not much, but it all helps. The balance of required income is extracted from the taxpayer.

The operating expense for 2011 is projected at $132,645,000. Employee expense represents $119,190,000 of that expense, or 90 percent.

The Ottawa Fire Department is a “special” case because it reflects the issue of “public employee expense”.

In the year 2001, the fire department expensed $68,250,823 in salary, wages and benefits to 949 employees. That would make the average annual employee cost $71,919.00.

In 2009, there were only 983 employees and a total of $104,192,000 in employee expense. That would make the average cost per employee at $105,994.00

In 2011, employee costs are projected at $119,190,000 with the number of employees increasing to 1,048. That would make the average cost per employee at $113,731.00.

There are a few points to make here.

From the year 2001 to 2010, the number of employees in the Fire Department increased from 949 to 1,003. That is a percentage increase of 5.7. I like this number because it reflects the real, more conservative growth numbers in population during the same period. My figure for growth in population in the City of Ottawa during the 2001-2010 period is liberal 10%.

If you look at it in a different way, one could wonder if the Fire Department isn’t a “closed shop”. 

Let’s look at the employee expense as really, with employee costs at 90 percent of total expense, that is all you need to analyze in this department.

Because the number of employees has remained relatively stable during the period 2001-2011, it is easier to more accurately assess the real increase in cost per employee. This happens to represent a 67 percent increase in individual employee costs from 2001-2011. You would never have your salary and benefits increase like this in the private sector.

The 67% takes into account the additional 99 employees hired or to be hired throughout 2001 to the end of 2011. So the 67 percent increase in individual employee expense is probably low. The figure for senior staff (and they are mostly senior staff) is in the range of 75 percent.

Inflation over the same period was approximately 27 percent. I guess you know where I am going with this. You can say it this time rather than me..

The reality: SALARIES ARE TOO HIGH, BENEFITS AND PENSIONS ARE TOO GENEROUS AND THE WORKING CONDITIONS ARE PRETTY GOOD, ALL IN A CLOSED SHOP.

The Fire Departments around Ontario use union negotiating in one city to increase salaries and benefits in another city. It is a game we can no longer afford to play. Just wait until you hear about the next demand regarding shift work.

Do you know what the average individual annual salary is in Ontario? Find out. You will be shocked!

Bill O’Malley

City of Ottawa 2011 Transit Draft Budget

City of Ottawa 2011 Transit Draft Budget

I know that the population of Ottawa has grown approximately 10 percent since Amalgamation in 2000.  You will see the real numbers in the next census. However, Transit expenses have doubled since 2002 alone.

There are reasons for incremental increases in annual transit expenses, but you would have to come from another planet to accept a doubling in expenses in 9 years.

The Ottawa Councillors that operate their own incorporated businesses would be bankrupt if expenses were allowed to increase in this fashion without a similar increase in real income. Thank goodness that some of the left leaning councillors were defeated or retired prior to the recent election.

Transit income from ridership and other services rose from $98,303,000 in 2002 to $150,290,000 in 2008. The Transit revenue forecast for 2011 is $168,890,000. This 2011 projected revenue figure is somewhat optimistic given the historical trend of real annual revenue increases. The revenue numbers are up due mostly to individual bus fare increases, not from the slow growth in actual ridership.

Taxpayers have to make up the difference between the gross expense and ridership income. Wow!

The total cost of the Transit operation in 2002 was $196,187,000. The 2011 Transit draft budget expense is projected at $402,848,000.

The majority of the increased expense is attributed to Salaries, Wages and Benefits.  In 2002, this expense was $92,927,000 and proposed at $238,878,000 in the 2011 budget. That’s a 157 percent increase in employment costs if the 2011 budget is accepted by councillors.

On the other hand, total Full Time Employees (FTE) in 2002 numbered 1,742. In 2008, the official number was 2,142. In the 2009 budget, the 2008 number was restated at 2,748 and now in the 2011 draft budget the number jumps to 3,055. No matter what numbers you believe, you can readily calculate that the increase in the number of employees has not come anywhere near the ridiculous employee expense increase.

I am not quite sure why the employee numbers changed, but it may have something to do with the operations related to a new 2009 category of expense referred to as Transit Equipment. I am looking for the answer to this now.  The “Gross Expense” of the department has jumped from $330,293,000 in 2008 to a proposed $402,848,000 in 2011. That’s a lot of money.

The Transit Department’s 2010 overtime expense is estimated to be $17 million. The 2011 overtime budget for transit is projected at $12 million. Only time will tell if the department is dreaming in colour. Expenses only seem to go up in this department, not down.

If you want an example of “out of control” spending, you are looking at it. Weak management, leftist councillors and a very serious militant union have allowed this situation to come to a boiling point. Inadequate provincial restraints in policy and unelected arbitrators are also all collectively responsible for this fiscal mess.

The provincial government must make transit an “essential” service in all major Ontario cities and implement a three year wage freeze in order to bring salaries more in line with the private sector. In addition benefits including pensions, must be reassessed and reduced.  All benefit costs must be subject to competitive bids.

Part 2 of the 2011 City of Ottawa draft budget will provide you comments on Fire Services.

Bill O’Malley

2011 Draft Budget Disappointment

My preliminary glance at the 2011 Budget is one of disappointment.  It is a timid start to fulfilling Mayor Jim Watson’s responsibilities. Senior Staff are still running the show along with the unions. Tax and spending continue on the road to financial chaos.

The residents recently voted in a new Council and indicated that “change” in the direction of the fiscal operations of the City was necessary. The new members of Council had better take a hard look at the 2011 Budget and set the “change” in motion. If Jim Watson can’t do it, you sure can.

The majority of proposed new taxes only support increased salaries and benefit expenses. You might want to read some of my previous blogs on this subject. And to add insult to injury, Senior Management want to hire more employees in 2011 to add to a level of employment expense that is the worst in Ontario, even when compared with Toronto.

We should be reducing the number of employees in addition to closing down services that are not essential and, in fact, intrude on our democratic rights.

One glaring example of stupidity in the 2011 Draft Budget is the declaration of thriftiness by reducing expenses of $1 million dollars on outside legal help and external consultants. In this category, $1 million dollars is nothing but a drop in the bucket. Try $50 million or more. This is just ridiculous.

And it goes on. “$9 million in budget pressure in annual debt servicing costs associated with the replacement of transit vehicles. This pressure is entirely offset by efficiency savings in transit’s operational costs.” I mean really, does this statement make any sense?

Speaking of Transit. The department is budgeting for $12 million in Overtime Expenses. 2010 actual overtime expense is estimated at $17 million I think someone is trying to fool the taxpayer.

Do you recall a few years ago when there was an uproar from the Auditor General about overtime costs. The figure at that time for all departments was approximately $26 million. Well, the 2011 draft budget from all departments is seeking $30 million in overtime compared to a 2010 estimated expense of $36 million. This is the mentality of senior management and I guess, this one slipped by Jim Watson. I can only hope that the new Council will not let this one ride.

From my preliminary look at the numbers for all departments, the expenses remain generally “constant” as a percentage of the total pie. Senior Staff are not changing direction in any manner whatsoever.

I will have more to say on this in the coming days.

I did wonder where the 2011 budget figures were for the Library. For the Police budget numbers, I had to go to their web site. This is not appropriate.

In reality, this 2011 Draft Budget is only a partial picture of the operations of the City. It does not include the Rate Supported Budgets, Ottawa Housing, Ottawa Hydro and other operations and expenses that I have commented on previously.

We need all of the draft budgets released on the same day and approved by Council as a package. You can have your 2.45 percent property tax increase, but can you handle the 10% Rate Supported increases or Hydro Ottawa’s greedy increase.

We will be paying a lot more than 2.45% this year.

As a note of caution, residents should make themselves aware of what is going on in some of the US cities. Police and fireman layoffs, no money to pay salaries and other expenses, reduction in union wages and benefits to prevent layoffs, pension defaults and in a few cases, city bankruptcy. I mention this only to make a point that we cannot roll along like nothing has happened over the past two years and continue on our merry way. In the case of Ottawa, it is over the past 10 years. We must be prudent.

And what I see so far in the 2011 Draft Budget is not prudent.

Bill O’Malley