Municipalities Out Of Control

Ottawa Housing Service 2011 Draft Budget

2011-02-11T15:17:00.002-05:00

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 13^th, 2011. I wasn’t impressed. The
Corporation isprojecting 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

Next: Information Technology

Ottawa Public Works-Notes.

2011-02-02T11:42:00.000-05:00

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

2011-02-01T09:42:00.002-05:00

Part 7: 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!

Part 7 A: 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

Next: Public Works-Notes

Ottawa Public Health

2011-01-31T09:12:00.000-05:00

Part 6: 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

Next: Part 7 Public Works

By-Law and Regulatory Services

2011-01-30T17:21:00.001-05:00

Part 5: 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.

Listen to 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

Next: Part 6 Ottawa Public Health

Paramedics 2011 Draft Budget

2011-01-27T09:21:00.001-05:00

Part 4: 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

Next Part 5: By-Law Services

The Ottawa City Police 2011 draft budget

2011-01-26T07:54:00.000-05:00

Part 3: 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

Part 4: Paramedics 2011 Draft Budget

The Ottawa Fire Services 2011 Draft Budget

2011-01-25T08:27:00.000-05:00

Part 2: 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

Next: Part 3: The Ottawa City Police 2011 draft budget

City of Ottawa 2011 Transit Draft Budget

2011-01-24T11:54:00.002-05:00

Part One: 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

2011-01-20T11:23:00.002-05:00

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

Ottawa Community Housing

2010-09-19T10:11:00.000-04:00

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

2010-09-11T10:18:00.000-04:00

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

2010-08-09T10:06:00.002-04:00

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

2010-08-07T09:59:00.000-04:00

The Party is over at the City of Ottawa

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 31^st				%
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

2010-07-24T09:04:00.001-04:00

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

2010-04-16T21:03:00.002-04:00

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

City of Ottawa 2010 Budget

2010-01-23T10:13:00.005-05:00

January 21, 2010

City of Ottawa 2010 Draft Budget

“in a Nutshell”

City Council will be meeting next week (Jan 26th,2010) to discuss the 2010 Budget.

The following information will provide the resident taxpayers of Ottawa with "all they need to know" about the 2010 draft budget.

Revenue from all sources, including property taxes, is expected to increase by $96 million dollars for the 2009/2010 period. $64 million of that new revenue will be used for additional employee expense. Almost all of the remaining new revenue ($32 million) will only cover inflationary costs for the balance of “other City budget expenses”.

Nothing has changed at city hall over the years other than employee and inflationary costs. Councillors can easily adopt the budget next week in one day as they did last year.

The resident taxpayer will pay an additional 3.9 percent more property tax than last year ( not including the increase in your property value) while commercial/industrial and “in lieu of “ taxes remain flat. The weight of the tax increase is on your shoulders only.
_______________________________________________

Senior City staff presented the 2010 Operating and Capital Budget dated December 9th, 2009.

The detailed draft operating budget reflects 2010 projected revenue of $2,318,746,000 ($2 billion $318 million $745 thousand dollars) and total expenses of $2,318,745,000 ($2 billion $318 million $745 thousand dollars).
Of the total 2010 projected operating revenue, employee expense is $1,221,997,000 ($1 billion $221 million $997 thousand dollars)
.
Now, the 2010 budget is projecting $93 million dollars in new revenue over 2009 from all sources including grants etc.

Of the total 2010 projected new revenue of $93 million, $64 million will be utilized for employee salary, wages and benefits.

Employee Expense is devouring 69 percent of the new projected revenue.

The majority of the balance of new revenue ($29 million) will only cover annual inflationary expenses on the remaining city operating costs of $1,096,748,000 ($1 billion $96 million $748 thousand dollars). This is no different than prior years. The city is at an economic standstill and has been for the past decade while employees reap outrageous salaries and benefits gains and the property taxpayers are driven into the poor house because of the lack of participation in the democratic process by many resident taxpayers.

Of the projected 2010 new employee expense of $64 million, almost $23 million of that amount is designated for OC transport employee expense, or 36 percent of the total.

The last time I looked, OC transport has approximately 14 percent of total City employee FTE (full time equivalent) positions at the City.

The transport Committee should be happy with this, especially Alex Cullen. I projected last September at a city hall meeting that this would be the case in 2010. Alex Cullen was not happy with my projection. Well, now he has no choice, but to acknowledge it.

The other thing about "employee expense" that is mysterious:

In 2010, total employee costs are projected at $1,221,997,000 ($1 billion $221 million $997 thousand dollars). This represents 53 percent of the total budget. Employee expense as a percentage compared to revenue is the highest of any municipality in Ontario.

The 2008 City of Ottawa audited financial statements certify total employee expenses in that year of $1,176,349,000 ($1 billion $176 million $349 thousand).

Now, the difference between the 2010 employee expense projection and the 2008 figure is $45,997,000 ($45 million $997 thousand) for the two years. That is simply impossible.

2008 Audited Financial Statements: Employee Expense $1,176,349,000
2010 Draft Budget: Employee Expense $1,221,997,000
The Difference: $ 45,997,000

The increase in employee costs as per the 2010 budget between 2008 and 2009 is $65 million and the increase between 2009 and 2010 as stated above is $64 million. (rounded numbers)

The draft budget reflects the total increase in employee costs from 2008 to 2010 of $130 million.

One cannot have a difference of $45 million for employee expense between the most reliable source for financial data as the 2008 audited financial statement and the 2010 projected budget, when the 2010 budget itself totals the difference as $130 million for the same period.

Therefore my conclusion is that employee expense will be recorded in the future 2010 audited financial statements as $1,304,997,000. In other words, Senior Staff are knowingly underestimating 2010 employee expense by $83,000,000 ($83 million dollars). Can you imagine?

It is clear that something has to change at the City of Ottawa this municipal election year for the good of democracy and the pocketbooks of the taxpayer.

*This means a total change in councillors at election time

*a change in senior staff

*a reduction in employee salaries and benefits through employee layoffs

*or an employee cost freeze and/or salary and expense rollback

*and more residents of the City of Ottawa to embrace democracy by direct participation in the municipal process before it is lost for good.

Bill O'Malley

Comments are welcome at wmomalley@gmail.com

Bilingualism at Ottawa City Hall

2009-09-18T20:47:00.004-04:00

If you aren't upset with the manner in which City Hall is controlled, then you should be upset with the following:

On September 15, 2009 the Ottawa Taxpayer Advocacy Group reserved the Champlain room at City Hall for a discussion with Councillor Marianne Wilkinson and Councillor Alex Cullen.

The public was invited.

One of invitees carried with him a sign opposing City Hall and its methods of governing, The physical sign complied with City Hall policy, except for the fact that the sign was "not bilingual", and only written in "English"..

A security guard quickly advised the guest to get rid of it or the guest would be expelled from City Hall.

There was much discussion and disbielf by those who were heard the confrontation.

Now, I don't know about you, but this is Canada. I can speak or write in any language that I want.

In this case, I do believe that Ottawa City Hall procedures have restricted the right of its citizens.

City Councillors again let the citizens down for allowing such a thing to happen.

Bill O'Malley

Ottawa City Hall Sept 15 2009

2009-09-17T17:53:00.006-04:00

Text of my 5 minute introduction speech at the meeting with

Ottawa Taxpayer Advocacy Group Chairman Ade Olumide

Discussions with Councillor Alex Cullen and Councillor Marianne Wilkinson

Ottawa City Hall

September 15,2009

Opening Statement

Bill O’Malley

Prior to my statement, I thanked Councillor Marianne Wilkinson, as she was the only Ottawa City Councillor to challenge the financial figures I presented to every City Councillor.

She and other Councillors were "shocked" with the figures I presented from my September 2008 blog.

She then requested the City Manager and City Treasurer to check the numbers. It took City Staff the best part of one month to do so. Marianne Wilkinson forwarded to me, in writing, confirmation from those mentioned above, that indeed my presentation was correct.

This is a 100% accurate picture of the state of Ottawa financial results for the period 2000-2008

Now the following is my statement in front of Councillors, 60 or so concerned residents, CTV, the Ottawa Citizen, and CFRA.

This is my statement

Ottawa is a good city and the residents are great, but as more and more residents are realizing, this City is not living up to its potential.

Amalgamation, recommended by a previous City administration, was to make the City more efficient in its operation and save the resident taxpayer money.

As you know, that didn’t happen.

The taxpayer has and is being taken for granted. Property taxes have increased and additional User Fees have added a heavy burden to many resident families.

In order to appease the taxpayer, glowing reports have been produced by City Hall describing the progress in the City. The reports didn’t reflect the true picture.

The intrusion of City Hall into areas that are not in the sphere of basic city services is rampant.

And over time, since Amalgamation, the taxpayer is catching onto the methodology of Councillors and Senior Management. The average taxpayer wants more of a say in the way their money is spent.

As a result, you now have the formation of the Ottawa Taxpayer Advocacy Group.

The Party is over at City Hall and the Legal Extortion has to stop.

There are many areas of City operations that can be improved on, but for this session, we will focus mainly on the largest expense of the City of Ottawa and that is the compensation level of its workers.

Perhaps, it is better stated as the number of employees deemed necessary to run this City, receiving a level of compensation that far exceeds the private sector. (about 40% more)

The combination of the number of employees and the compensation level is a formula for disaster to the financial soundness of the City.

The taxpayer has heard too often that

compensation is comparable to other cities, the Unknown ARBITRATORS were responsible, there may be a strike if union demands are not met, the Ontario Government forced a level of service in certain city services that required more staff etc.

Well, we are not Toronto, Vancouver or Hamilton, or Windsor or Thunder Bay. Each city has its own economy and in Ottawa we have to operate this City within the confines of that which the taxpayer can afford.

This City and individual departments within it, frequently compare themselves to other Canadian cities when the end result suits there cause.

However, the “buck” stops at the Ottawa City Councillors. You authorized the wage levels and you authorized the hiring of employees.

On Amalgamation day, the city of Ottawa expensed 38.1 percent of its total revenue on employee salary, wages and benefits.

As of December 31, 2008, the level of compensation had increased to 52 percent of total revenue or $1.2 billion dollars or so.

How and why this was allowed is beyond the comprehension of the majority of taxpayers. Many responsible citizens have warned Council that they were going down a path to financial disaster.

This has turned out to be Legal Extortion.

The Ontario Municipal Act bestows the power of ruling individual municipalities to the elected Councillors. It also provides an obligation and duty on the Councillors to utilize the resident taxpayer’s money in a manner the benefits the taxpayer. This is not happening.

The Municipal Act also dictates responsibility and duties on City Council. The elected Mayor and Council have, as a body, the duty to exercise all the powers of the municipality provided to it under The Act.

And it is all about “money”.

In this regard, I want to talk about “New Revenue”. Revenue is money received by the City from property taxes, government grants, user fees and any and all other sources of revenue. The “New” refers to money received over and above revenue generated for the year 2000.

The same applies for the term “New Employee Expense”.

Of the eight jurisdictions in Ontario with “New Revenue” over 1 billion dollars during the period 2001-2007, the City of Ottawa had the highest usage of that New Revenue for New Employee Expense.

A whopping 72.24 percent!

This is according to the financial statements, but differs from the Financial Information Report where the New Employee Expense is a staggering 81 percent of all “New Revenue”.

This is Legal Extortion.

That means that the City of Ottawa is basically “stuck” in the year 2000 as the remaining balance of New Revenue generated since amalgamation has, for the most part, only covered the additional inflationary cost of purchasing necessary materials used in maintaining the city infrastructure and other services.

The average usage of New Revenue for New Employee Expense for the other eight jurisdictions was 43.59 percent. Now Stop and Think About That Number.

Ottawa had 72.24 percent usage and the other Ontario jurisdictions had only 43.50 percent. Does this make any sense?

As mentioned earlier, Ottawa entered amalgamation with a percentage of 38.19 percent of Total Employee Expense to Total Revenue, .but increased to 47.10 percent in fiscal 2007. At the end of 2008, the percentage rose to 52 percent. Something has to “give”.

If Ottawa had maintained the percentage of the other larger Ontario municipalities, there would have been over $500,000,000 Million Dollars to look after our roads and sewers and beautify the city etc.

Or heavens forbid, Property Tax or User Fees could have been reduced. Instead, Council gave it to the employees. The taxpayer received nothing more than higher tax bills and higher User Fees.

This is Legal Extortion.

Now let’s look at the number of employees employed by the City.

According to a list provided by Kent Kirkpatrick to Stittsville-Kanata West Councillor Shad Qadri in 2008, the City had 19,000 employees or “jobs” as Kirkpatrick described it.

The 2008 Budget, according to Qadri, authorized 12,000 full-time equivalent employees. This information was reported in the Ottawa Citizen September 17, 2008. But again, Qadri’s Full Time Equivalent number of 12,000 was not correct.

If you want the real figures, Councillors should refer to the approved Budget and the Financial Information Report. If you don’t want to do that, The Ottawa Taxpayer Advocacy Group will provide the numbers for you.

Better still, Senior Management should provide a detailed list monthly to the taxpayers. Then, no one can run and hide.

Again, Kent Kirkpatrick indicated a level of 19,000 employees in September 2008. Kent Kirkpatrick informed resident taxpayers in the 2006 Ottawa Annual Report that there were “nearly 17,000 City Staff”.

Even the Auditor General uses this figure in 2007 reports. Does this mean that the city added 2,000 staff in the 2007/2008 period?

The taxpayers have a right to know the authorized equivalent number of employees and normally this information is provided in the annual approved budget. However, we need to know more.

We need to know the number of full-time employees. Full Time Employees are 100 percent FTE.

We need to know the number of part-time and seasonal employees, like in the number of human bodies, and this number as related to the make up of full time equivalent or FTE.

And finally, we have to know how many full-time equivalent positions are vacant. These figures should total the authorized full time equivalent as outlined in the Approved Budget.

The majority of city employees are deemed to be conscientious in performing the duties of the job, but amalgamation and the slow growth of the City population over the past eight years does not account for the current number of employees working at the City.

A real effort must be made by Council to reduce the number employees. Senior Management can no longer stack the numbers and hide the employee numbers to the taxpayer.

And Council has the opportunity tomorrow to start to show its regard for the taxpayer dollars.

There are a number of City Departments that recently announced that they may be over Budget. The Ottawa Taxpayer Advocacy Group would like Council to send a directive to these departments informing them that in the last three months of this fiscal year, each department must find a way to balance the authorized Budget through a combination of Layoffs and reduction in spending in other expense items.

This would be the first step to ending Legal Extortion.

Let’s see if Council is mature enough to take the necessary action and send the signal to all departments that the Party is Over.

2010 Council Information and Classes

2009-09-17T16:20:00.002-04:00

Ottawa Municipal Election 2010

There are 23 wards and a mayor to be elected in 2010.

Any serious candidate (only one for each ward) willing to join a slate of candidates to take back “City Hall” for the benefit of the Taxpayer, will be provided with detailed financial information as follows:

A Complete and detailed breakdown of the approved “Budgets” of the departmental figures for the period 2001 to 2010

A Complete and detailed spread sheet of the Audited Financial Statements from 2001 to 2008

A Complete and detailed breakdown of all of the pertinent departmental financial information as provided for in the Financial Information Report for the period 2001 to 2008.

Reports on specific departments that are underperforming

Reports on the Employee Expense which has devoured 81% of every $1 of property tax increase since 2001 and Every Other Source of Total Revenue, including Government Grants.

Council has very little control over Senior Management at the present moment. You will be provided with the information in the Act that will allow you to direct and control City Management without interferance from other levels of government.

You will receive a copy of the Municipal Act and we will review the detail in a classroom atmosphere.

I will also offer several other “classes” for new candidates to bring them up to date on the operation of Council, the Duties and Responsibilities and the inner workings of City Hall. This is crucial in order that you can take your seat at Council, be effective and rule the City for the Taxpayer.

All of this is My Contribution if you are willing to democratically enhance the operations of the City.

This offer will be open to Candidates that declare their intentions before December 31, 2009.

Bill O’Malley

Contact me at wmomalley@gmail.com

Or 613 296 4229

Ottawa Municipal Revenue and Employee Expense

2009-07-04T18:41:00.001-04:00

Republished on Request

July 2008

Please Note: Employee expense (2001-2007) at the City of Ottawa has devoured 81 percent of all new revenue generated since amalgamation.

Senior Staff and Councillors at the City of Ottawa must urgently explain.

(There are 11 detailed Tables available on request. To obtain the tables, request same at the address reflected at the end of this article.)

Information for the Resident Property Taxpayers of the City of Ottawa 2008

“What Each of You Should Know”about the financial position of your city

On January 1, 2001, residents in the 12 surrounding communities of Ottawa were incorporated into the new City of Ottawa.

Whether you receive a property tax bill directly or through your landlord or commercial enterprise, you are a taxpayer of this city and you owe it to good governance to keep abreast of the spending habits of the city managers and city councillors.

The amalgamation plan of these 12 legal entities was to provide efficiencies which would be translated into tax savings for all resident taxpayers. Well, this didn’t happen as you know. Let’s find out what went wrong.

This financial review of the City of Ottawa analyzes the largest expense, that being employee compensation. For reference purposes, the employee expense is compared with “Total” revenue.

Total revenue includes direct property tax, in-lieu-of property tax levies, user fees, grants from provincial and federal governments, license and permits, gas tax receipts, fines and penalties, cash return on city investments, sale of city owned assets, gaming and casino revenues and transfers from revenue of prior years accumulated in the capital account and/or other reserve funds. It does not include funds received (and spent) from any increase in borrowing authorized by city council. The borrowings just add to the debt of the City for you and future generations to repay.

Property taxes per se may not increase in any given year, but revenue from the many other resources of the city continue to increase. You pay the increase in one way or another.

Here is the summary position of Total Revenue and Employee Expensee from January 1, 2001 through to December 31, 2007.(Table 1)

2001 Total Revenue $1,697,836,210

2007 Total Revenue $2,297,280,941

35.31 percent increase during the period or an average of 5.9 percent per year.

2001 Total Employee Salary and Wages $610,700,643

2007 Total Employee Salary and Wages $884,415,199

44.82 percent increase during the period or an annual average of 7.47 percent

2001 Total Employee Benefit Expense $105,568,994

2007 Total Employee Benefit Expense $162,665,030

66.13 percent increase during the period or an annual average of 11.05 percent per year

2001 Total Employee Compensation $716,359,637

2007 Total Employee Compensation $1,059,949,916

47.96 per cent increase during the period or an average of 8.0
percent per year.

2001 is the base year so the above “change” occurred in the past 6 years

Now, calculate your personal salary and benefit increases over the past 6 years. If it fits into the above numbers, good for you. However, most of you will be substantially below the percentages expressed above. You will then begin to understand the problem at Ottawa City Hall.

Another glaring fact: (Table 2)

Since amalgamation on January 1, 2001, New Revenue has been generated and New Employee Expense has been incurred.

What percentage of the new revenue was expensed for employee compensation?

In order to find the answer, I used the “Base Year” of December 31st, 2000 for the financial analysis as this was the last day before amalgamation.

Note: The year 2000 financial data is taken from Audited Financial Statements. All other Data is from the Financial Information Report (FIR).

December 31, 2000 Total Revenue $1,743,269,000

December 31st, 2000 Total Employee Expense (Salary/Wages and Benefits) $665,004,000

Now, I froze these numbers in time and then calculated and new Revenue in 2001 through 2007 over and above the 2000 Revenue figure. I did the same for New Employee Expense.

As at December 31st, 2007, the Revenue in that year climbed to $2,297,280,941 and the 2007 Total Employee Expense in year 2007 was $1,059,949,016.

Now, here is the kicker!

From January 1st, 2001, through to December 31st, 2007 a total of $1,938,107,596 in New Revenue was generated by the City of Ottawa, while your Councillors and Senior City staff spent $1,578,834,671 of the New Revenue on Employee salaries, wages and benefits.

Other major Ontario cities have accomplished much better results in the same method of analysis as compared to Ottawa. This will be the subject of a detailed analysis next week.

Now, just to be sure that I wasn't dreaming in color, I used the Audited Financial Statements of the City of Ottawa for the years 2000 to 2007 to verify the percentages developed from the Financial Information Report.

Well, the numbers weren't exactly the same, but just as devastating. The same exercise with the audited financial statements reveal 72.24 percent of the new revenue generated was devoured by Employee Expense. It also reflects my concern that the format on the three major reports must be coordinated. No wonder taxpayers are confused.

Total New Employee Expense as a percentage of New Revenue generated since 2001 (Table 3)

New Revenue $2,385,610,000

New Employee Expense $1,723,462,000

The audited Financial statements reveal that 72.24 percent of New Revenue was spent on New Employee Compensation

Table 4 shows you the detail of the above calculation

If it wasn't discouraging enough to look at the increase in Employee Expenses as shown above, take a look at the accelleration of employee costs versus total revenue year by year. (Table 5)

In the year 2000, Employee Expense was 38.15 percent of Total Revenue and as at December 31st, 2007 it grew to 47.09 percent. (Based on Audited Financial Statements)

Another Concern:

Future Taxpayer Debt:

The charge to Unfunded Liabilities (Table 6) for future employee benefits for 2007 was some $50 million dollars, equivalent to a current 5% property tax increase. The amount, as extraordinary as it is, needs to be specifically explained to the taxpayer by senior management. You may not like the explanation. City Councillors must inform the resident taxpayers annually on the total “accumulated” unfunded liability charge at the end of each financial year. What is the total accumulated Unfunded Liability for the City of Ottawa as at December 31st, 2007? The City Manager should answer this question.

How Many Employees does the City Have?

Full time employees (Table 7) remained below the 2001 level except for a jump in 2007, the year that the general public raised concerns about the number of employees. Part-time employees declined and the number of seasonal employees is not a major factor in the number of “full time equivalent” employees.

In 2007, there were 13,461 full time employees, 1,634 part time employees and 50 seasonal employees.

Over the 2001-2007 period full time employees grew by 1.01 percent, part time employees declined by 62.13 percent and seasonal employee change was negligible.

Note: The increase in the number of employees does not account for the unreasonable increase in employee compensation as show in the first section of this report.

Employee “hours worked” including Boards (Table8)

In 2001, 22,950,219 hours were worked by City employees and this grew to 26,963,079 hours in 2007, a 17.49 percent increase. So, there still is an overtime problem at the City.

I have gone further into detail on the employee hours worked and reflect the data by Department for 2001 through to 2007. (Table 9)

Some of the more glaring changes are listed following:

Administration hours increased 277.57 percent

Public Works decreased 26.35 percent

Fireman hours increased 26.42 percent with no additional staff during the period.

Home for the Aged hours declined 41.78 percent

LLibrairies hours increased 225.96 percent

Now we will look at the Employee Compensation by Department:

Table 10 reflects the increase in Salaries, wages and benefits by Department.

Again, notables are as follows:

Program Support compensation increased 79.46 percent

Fireman compensation increased 44.22 percent

Police compensation increased 59.80 percent

Protective Inspections increased 414.70 percent

Winter Control increased 178.06 percent

Public Health Services increased 142.23 percent

Child Care increased 89.04 percent

Libraries increased 65.00 percent

For all Departments, salaries, wages and benefits increased ON AVERAGE by 47.96 percent

Now let's look at how Budget Data is compiled (Table 11) This information is included in this report as there is a difference in the presentation of the financial numbers compared to the Financial Statements and Financial Information Report. It is my opinion that this only confuses the resident taxpayers.

2007 City of Ottawa Budget Data on Compensation and Full Time Equivalent (FTE) Employees. The information format does not match the above Financial Information Return

The Table information provides authorized Department compensation dollars and authorized FTE in detail

The average FTE Employee Cost is $76,573, but this does not mean than the City Staff actually utilized the full authorized FTE. It is assumed that many positions have not been filled. The authorized dollars however, have been fully used, leading to the assumption that the average cost per employee is higher than the reflected $76,573.

eg: Average cost per FTE in the City Manager's Department is $111,800

The Housing Department has an average cost per FTE of $80,933

Fire Services has an average cost of $97,158

The Police Services has an average cost of $93,080

Information Technolgy Department has an average cost of $81,972

Employee Services has an avaerage cost of $84,295

The average cost per Department FTE ranges from a low of $55,984 to a high of $113,125.

Note: The 2007 compensation budget was exceeded. See FIR results.
Complete annual data Tables (2001-2007) are available upon request by email.

wmomalley@gmail.com

Next publications

1) New Revenue versus New Employee Expense for Major Ontario Cities
2) Ottawa Revenue Detail by Type and Department 2001-2007
3) Ottawa Individual Department Operating Expenses 2001-2007
4) Ottawa Complete Budget Information covering detail from base year 2001 versus 2006, 2007, 2008 and the proposed 2009 Budget

Look for them on this Blog. Sponsors are welcome.

Important:

The source of this data is from a report submitted annually to the provincial government called the Financial Information Report or FIR. The annual report is signed “as accurate” by the treasurer of the City of Ottawa. Every effort has been made in my analysis to reflect accurate recordings of the information contained in annual reports from 2001 to 2007. The year 2000 (prior to amalgamation) is based on the consolidated position of the 12 communities as reflected in the audited financial statements.

Some months ago a recommendation was made to Jim Watson, the Ontario Minister of Housing and Municipal Affairs, that all Ontario Municipal Budgets follow the format of the FIR. He did not reply.
In Ontario municipal accounting, there must be a clear, comparable relationship between the annual Budget, the annual Financial Statements and the annual Financial Information Report (FIR). Currently, the method of municipal reporting deprives resident property taxpayers of vital financial information and the spending habits of City Management and Councillors. It is labour intensive to compare financial data in a given department because senior management change (at whim) the sub groups within the department and the information available from three different sources are in different formats.. It is not cynical to question the motives of Senior Management.

If financial information was revealed in an easy to understand, and accurate, manner, you would have a much greater participation in the municipal electoral process than has been evident over the past twenty years or so.

Bill O'Malley
Ottawa

2009-06-26T20:16:00.004-04:00

June 26, 2009

By Bill O’Malley
Ottawa, Ontario

Ottawa Financial numbers for the period ending December 31, 2008

2008 Employee Numbers:
Full-time Funded Positions #13,915
Part-time Funded Positions #1,656
Seasonal Funded Positions #51
The important word here is “FUNDED”

2008 Total Salaries and Wages $940,728,291
Employee Benefits $193,836,577
Unfunded Liabilities pertaining to Post-employment benefits $22,611,960

2008 Total Salaries/Wages and Benefits--$1,157,176,828

2008 Revenues

Revenues from all sources $2,360,708,374
Plus transfer from reserve funds $77,380,691
Total Revenue receipts $2,438,089,065

2007 Employee numbers
Full-time Funded Positions #13,461
Part-time Funded Positions #1,634
Seasonal Funded Positions #50

Despite public statements by the City Manager that positions have been eliminated and employees have been let go, the real numbers reveal that an additional 454 full-time funded position have been added.

2007 Revenues including Reserve Transfer
$2,297,280,941

2007-08 Salaries/Wages and benefits

2007 Salaries/Wages $884,415,199
2007 Employee Benefits $175,534,717
2007 Unfunded Liabilities pertaining to Post-employment benefits $50,559,157
2007 Total Salaries/Wages and Benefits--$1,110,509,073

2008 Salaries and wages increased $56,313,092
2008 Employee Benefits increased $18,301,860

The rise of salaries, wages and benefits from December 31, 2007 to December 31, 2008 is $74,614,952, equivalent to a 7% increase in property tax.

2008 Increase in revenue and fund transfers compared to 2007 is $140,808,124

If you remove the fund transfers from the equation, 2007 total revenue was $2,245,310,236 compared to 2008 revenue of $2,360,708,374. The 2008 increase is $115,398,138 of which $74,614,952 was expensed for employee salaries, wages and benefit increases.

I have previously provided financial ratios in chart form for the City of Ottawa for the period years 2000 and 2007. The 2008 financial numbers confirm little or no progress in controlling spending. In other words, the financial situation has not improved.

It is time to turn up the heat on councillors and city management because this pace of increases in employee expense cannot be maintained any longer.

This is a preliminary look at the 2008 City of Ottawa financial numbers and every effort has been made to reflect the numbers accurately.

Detail information will be published in the coming days.

Bill O’MALLEY
Municipalities Out of Control
The Ontario Tax Reporter

Ontario Tax Grab

2009-04-07T15:25:00.009-04:00

The largest single tax grab in the history of Ontario

Harmonization of the GST and PST will be called the “HST”. It is due to be implemented in July 2010 at a combined rate of 13% TAX on literally everything that you purchase or service that you use, including hydro, heating, automobile gasoline, mutual funds, insurance ( with a few minor exceptions). You don't need a list of what will be taxed. All you have to do is see the very short list (on a very small piece of paper) of the items that are exempt.

In general, all goods and services currently subject to 5% GST, but not PST, will be hamonized (the PST will now apply) for a combined rate of 13%.

The Ontario Tax Reporter

&
Municipalities Out of Control
By Bill O’Malley
April 6, 2009

This will be the largest tax grab in Ontario by the liar’s Liar, Premier Dalton McGuinty, in the history of the province. In the first full year of operation (2011-12), the Liberal Ontario Government will reap $5.3 BILLION more in sales tax than it would have otherwise with the current PST. Every single Ontario resident will pay dearly.

You have to know that this new tax will be added to everything you buy or sell and there are only a few exemptions for baby things and women’s hygiene products. McGuinty wants his share of 13% on everything that you never dreamed would be taxed.

Harmonization is a good thing, but Ontario would have to reduce the combined tax from the proposed 13% to 11%. This would comprise 5% Federal and 6 % Provincial. At this rate, the beneficial effects of the HST would help business and Ontario families.

Every other Province entering into the harmonization of the GST and PST lowered the rate of its PST to take into consideration the extention of the HST to most goods and services. McGuinty and the Ontario Liberals will be the only province not to reduce the PST rate. This is one more severe step to the disintegration of the middle class and the downloading of more hardship on the poor of the Province.

The HST as proposed by the Ontario Liberals for a family of two adults in their own home will see tax expense increase by between $166.00 and $200.00 monthly, depending on individual circumstances. That’s $2,000.00 to $2,400.00 per year with nothing to show for it.

What will happen to people on fixed incomes and pensioners? It is a real shame.

In addition to the Socialist Liberal Republic of Ontario taking all this extra money out of your pocket, just wait until January 2010 when new Hydro rates go into effect on the so-called “meter system”. If you don’t change your style of living, your monthly hydro rates will nearly double. Then add the 13% HST on top of your bill.

Now don’t forget the “McGuinty Health tax grab” back in 2004 when he said no more taxes under his administration and actually signed an agreement to this effect. He was sued for going back on his word, but a Liberal provincial judge said that it was OK for politicians to LIE during elections. Have you noticed any improvement in the health system since the health tax was instituted? I know that you haven’t!

The health tax started at $2 BILLION in annual revenue for the LIAR’S GOVERNMENT and in 2009-10, the annual revenue from this source has increased to $2.9 BILLION.

On top of all of this, the printed media is being silent. The media has an obligation to inform its readers of important changes in government policy, but in this case they are closing their eyes. The media is being irresponsible and I would suggest that you withdraw your support for any media that does not provide detailed information to all Ontario residents by the end of April 2009. This subject is that important. Don’t buy their newspaper.

What should you do? This should be the start of a tax revolt.

Seek more information on both the HST and Hydro plans.

Complain to your local media if an analysis is not published soon.

Write or email your local Ontario political representative, the Ontario treasurer and the Premier of Ontario.

Send me your comments. wmomalley@gmail.com

Pass this on to anyone that you know that wants more information on the tax grab. My detailed information will be published on my blog site in the coming weeks in a format that can be easily understood by all.

In the meantime, the McGuinty Government is counting on the APATHY of Ontario residents
and I think that this time he struck out. To you the average Ontario resident, if you have never complained before, please do so now and show McGuinty that his low opinion of Ontario residents is very wrong. You deserve to be heard.

The following is a "link" to a central HST petition site and I encourage you to present your thoughs on the site and also contact your MPP.

http://www.ipetitions.com/petition/Stop_HST_Ontario

(Under "Government and Politics" on ipetition site)

Have a nice day,

Bill O’Malley

City of Ottawa Finances

2008-10-18T09:48:00.004-04:00

October 17, 2008

In recent weeks, Canadian citizens have witnessed the bursting of the financial bubble in New York and London. Stock markets, banks and insurance companies etc. have been affected the world over. It happened because “heads were buried in the sand”. The bubble would not burst they insisted, but it did. The blame game is now underway.

Well, Ontario municipalities are living under a similar financial bubble and even though I and others have been warning of this for several years now, the powers to be have had their “heads in the sand”. The media has paid lip service to the unfolding events by simplistically pointing out the need for more municipal revenue. What we really need is more direct control of municipal wages and benefit costs and productivity enhancements.

Total Ontario municipal revenues have been increasing at a healthy annual average of near 6 percent while the Ontario population growth for the majority of municipalities (there are some notable exceptions like Barrie and Guelph) was in the 4 percent range over the period 2001-2006. That’s less than 1 percent a year. So if the population was growing at a snails pace, where did all the revenue go! Basically, unwarranted compensation increases used up the majority of the revenue.

The Ontario Municipal Act bestows the power of ruling individual municipalities to the elected councillors. It also provides an obligation and duty on the councillors to utilize the resident taxpayer’s money in a manner that benefits the taxpayer. This has not been happening.

In the case of Ottawa, municipal councillors have disregarded their responsibility to the taxpayer and allowed others to control the spending of taxpayer’s money.

The current structure of control at the City Of Ottawa is as follows:

Unions
Senior Managers
City Councillors

The Ontario Municipal Act dictates the following structure:

City Councillors
Senior Managers
Unions

You will be hard pressed to ever hear the word “union” coming out of the mouths of our councillors or senior staff. You may hear that employee compensation is comparable to other Ontario jurisdictions, the arbitrators in Toronto settled outlandish wages for Ottawa union workers and the like.

You will not hear that 81 percent of all new revenue generated since amalgamation has been expensed for wage and benefits to City of Ottawa Union employees. The City of Ottawa is basically “stuck” in the year 2000 as the remaining balance of new revenue generated since amalgamation has, for the most part, only covered the additional inflationary cost of purchasing necessary materials used in maintaining the city infrastructure and other services.

The City of Ottawa's annual employee compensation expense is currently at the 1.1 billion dollar level. Property taxes account for approximately one billion of the total annual revenue of the City. A five percent resident property tax increase will not even cover employee compensation increases at the City of Ottawa in 2009. This is the problem the has to be resolved.

Most other Ontario municipalities have had a similar spike in compensation levels without comparative population growth. However, Ottawa’s compensation increase since 2001 to 2007 is by far the worst of similar sized jurisdictions in Ontario compared to revenue.

The problem does not belong only to Ottawa. It starts with the Ontario Government Public Sector salary policy. For example, you can recognize it in the illogical compensation increases for the Ontario Provincial Police.

Public sector workers have the greatest of job security and substantial wages and benefits above the private sector. Why? Because our elected politicians do not carry out their responsibility of controlling compensation levels in relationship to the majority of private sector workers. Period.

In Ottawa’s case, city councillors must take back the responsibility for controlling union employee compensation and make certain that it is on the basis of affordability of the resident taxpayers of Ottawa, not on compensation settlements in other Ontario communities.

Arbitrators in Toronto need to be re-educated. They have caused financial hardship on many municipalities in Ontario and have irresponsibly created the compensation “bubble” in Ontario municipalities. City councillors like the fact that they can blame the arbitrators, but it doesn't get the councillors off the hook. They are ultimately responsible for this mess.

The Unions will always take the best that they can get. In the present structure of wage negotiations, I don’t blame them. However, some sanity has to come into the equation.

The councillors have the choice now of reducing the workforce to save taxpayer money; restricting or roll-back wage and benefit increases; negotiate productivity improvements; closing "nice to have" departments and services and/or obtain additional revenue from the Provincial Government. The councillors must keep in mind that there is only one taxpayer.

Comments would be appreciated to:

wmomalley@gmail.com

Bill O’Malley
Ottawa

How Many Employees Work At The City Of Ottawa?

2008-09-28T11:00:00.004-04:00

Good question!

The question should be: How many authorized Full-time Equivalent employees (FTE) at the City of Ottawa?

According to the list provided by Kent Kirkpatrick to Stittsville-Kanata West Councillor Shad Qadri, the City of Ottawa has a total of 19,000 jobs. The 2008 budget according to Qadri authorized 12,100 full-time equivalent (FTE). This information was published in the Ottawa Citizen September 17, 2008.

Kent Kirkpatrick informed resident taxpayers in the 2006 City of Ottawa Annual Report that there were “nearly 17,000 City Staff”. Even the Auditor General uses this figure in 2007 reports. Does this mean the city added 2,000 staff in 2007 and to-date in 2008? Somebody better get their act together soon.

What are the real numbers as confirmed by the Ottawa City Treasurer?

As of December 31, 2007 the City of Ottawa Treasurer confirmed to the Provincial Minister of Municipal Affairs and Housing, Jim Watson, the following breakdown of employees:

Full-Time Funded Positions: 13,461 (including Boards)
Part-Time Funded Positions: 1,634 (including Boards)
Seasonal Employees: 50 (including Boards)

The 2008 Adopted City Budget authorizes 13,839.68 FTE, not the 12,100 as referred to by Councillor Shad Qadri in the Ottawa Citizen article. This may be due to excluding the Police Budget which has a total of 1,836 authorized FTE for 2008. Even so, accepting these figures would still result in 97 FTE positions over the 2008 authorization. Councillor Quadi’s FTE figure should be 12,003.

81 percent of all new revenue generated by the City of Ottawa since Amalgamation in 2001 has gone to employee expense. Shouldn’t this be a reason for management to know at any given time, the number of employees working at the City and how this number converts to FTE? The fact that Kent Kirkpatrick provided figures to Councillor Shad Qadri that Quadri indicated were “useless” should be enough to get the attention of every single Councillor.

Kent Kirkpatrick acknowledged the discrepancies, but indicated that the City of Ottawa Council is provided with the “best information” of any municipality on Canada. This statement, to say the least, is inaccurate and Kirkpatrick should know better. The employee figures provided to Ottawa City Council simply would have a failing grade compared to other municipalities in Canada.

First of all let it be said that it is the “duty” of the City Manager and other senior staff to provide accurate and timely information to City Council and to furnish reasonable information requests from the Mayor and any Councillor at any time. Providing the employee information in December 2008 is not timely.

Kent Kirkpatrick dictated that the new and complete employee information requested by Shad Qadri would be disclosed during the December 2008 budget discussions for 2009. This is completely unacceptable. The Auditor General states that the compensation budget process is flawed. It is time to get it fixed now.

The cost of employee overtime is still a problem at the City of Ottawa and this overtime expense must be contained within the authorized FTE.

The Auditor General has pointed out many, many problems within the Employee Services Department in 2007 and also on the employee compensation budgeting process within Ottawa City Hall. It is troubling to see such inept management.

The Municipality of Ottawa “TEA Party” is looming on the horizon

Bill O’Malley
Ottawa
September 28, 2008

Municipality of Ottawa is out of control

2008-08-24T11:47:00.001-04:00

Municipality of Ottawa is out of control.

August 24, 2008

In my research data published on July 22, 2008 reference was made to City senior staff interfering in the political decisions of Council. (The Mayor and all Councillors were directed to my website). By the third week of August several councillors challenged staff on previous directions that were not carried out. The relative Staff Managers have since apologized and those directions are now being implemented.

Further, the City Manager, Kent Kirkpatrick, issued a direction to all senior staff to report on all outstanding Council directions. The resultant report will be provided to Council in the coming weeks. This subject was covered extensively in the Ottawa Citizen and the Ottawa Sun in the past several days.

We are now seven and a half years into amalgamation and it is only this past Friday that the City Manager publicly took ownership of what should be the most important function of the job. That is, administering the operations of the City of Ottawa as directed by Council. The fact that he has not had control of this aspect of operations is totally unacceptable by any professional standards.

The lack of control at City Hall is also evident as it has taken Committee Chair Councillors and Councillors at-large, especially in one case, several years to realize that directions to Staff were not carried out. There is a responsibility of the Committee Chair to track the implementation of directions and report on same to Council in general. It isn’t only the responsibility of City Staff.

The Ontario Municipal Act clearly dictates the responsibility and duties of city council. The elected Mayor and Council have, as a body, the duty to exercise all of the powers of the municipality provided to it. This doesn’t seem to be the case as I will explain.

Who is running the City of Ottawa? Is it the Mayor and councillors or the City Senior Staff? Or is it the unions and arbitrators in Toronto? We as resident taxpayers better find the answer soon.

The City of Ottawa is a good city and its residents are the best. However, the operations of the city are letting its residents down by not living up to its great potential.

There are several important changes that will have to be made by the City of Ottawa elected politicians.

Number one is the election of ward councillors by all resident taxpayers of Ottawa while maintaining the ward system. Currently, only residents within a ward elect their representative. Council has the power to make city-wide voting for councillors a reality now, just as the City of Oshawa has done. This would ensure that councillors would put the issues of the city at-large first and foremost before their ward. As it is now, the ward comes first and the City of Ottawa second. This will be the subject of my next blog.

The second most important issue is to repatriate the power of Council to maintain control over all union contracts rather than shun the responsibility and give the power to some unknown arbitrator in Toronto. It is a fact that the City of Ottawa has spent 81 percent of the new money generated since amalgamation on compensation to its employees. The audited statements of the city reflect this percentage as 72. Now, it may be that the union contracts negotiated by the Toronto arbitrators are ok, but the decision must be taken back into the hands of councillors in order that councillors are collectively held responsible. Councillors make pretty good money, but I would challenge the remuneration they receive if they continue to allow almost 50 percent of the annual revenue of this city to be controlled by outsiders.

The third issue deals with staff. The majority of staff is deemed to be conscientious in performing the duties of the job, but amalgamation and the slow growth of the city over the past seven years does not account for the current number of employees working for the city. A real effort must be made by council to make efficiencies if senior staff continues to stack the numbers and information provided to Ottawa residents.

The fourth directive would require the Auditor General to do away with an annual report on audits of various departments. Whether an individual audit result is good or bad, it should be reported to council and the public immediately on completion of the audit. This would provide council with the necessary tools to maintain better control and provide the public with factual information. As the auditor general has access to all city departments and information thereof, it would be beneficial to the operational control of the city by our councillors.

The fifth issue relates to public disclosure of external contracts to consultants, other individuals and companies. Ottawa is one of the few cities that do not disclose this information in a clear format on its website. This should include the publication of the request for bids for materials or services and the winner of same. It is always said that the more information publicized the less chance for problems to arise. The residents of this city need to know the names, purpose and amount of contracts over $10,000 similar as to what is disclosed by departments of the federal government and other provincial and municipal governments.

The sixth issue relates to grants to various organizations and individuals in the City. The amount of taxes spent in this area has increased beyond logic over the past seven years and councillors must take a look at the situation. The resident taxpayers should be able to access on the city website the names of the individuals and organizations that receive the grants and the amount and purpose of the grants.

The last priority, but not by any means unimportant, is for city councillors to continue to pressure the provincial government to repatriate social and health costs, as these expenses have no business being part of the resident property tax system. We already pay provincial taxes to cover these costs.

And to put everything into perspective, where there is a will, there is a way.

Bill O’Malley

Ottawa

Municipal of Ontario Surprise

2008-08-04T17:09:00.000-04:00

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

Ottawa Municipal Transition Board

2008-07-30T08:46:00.000-04:00

The Ottawa Transition Board
2000-2001

What did Amalgamation of the 12 jurisdictions do for Ottawa? Well, you can’t do much if you spend 81% of the new money on Employee Expense. No amalgamated jurisdiction won and resident taxpayers lost big-time.

There are a majority of residents that would like to see the rational for amalgamation revisited. However, amalgamation is not going to go away, so certain critical changes will be required in order to address the Employment Expense fiasco and other spending habits of Senior Management and Council.

Your thoughts would be appreciated.

It is priceless and golden to read the final report of the 2001 Ottawa Transition Board in the year 2008.

In retrospect, the report was encouraging for resident taxpayers as a leaner and more efficient city was about to emerge, saving money for all of us.

The then Minister of Municipal Affairs and Housing, Tony Clement, appointed Claude Bennett as the Chair of the Transition Board along with a number of very qualified individuals. That was in the year 2000.

The mandate of the Board was:
-Determine the organizational framework and hire key senior staff
-Resolve transitional Human Resource Issues
-Implement new City Budget
-Restructure Municipal Electric Utilities and Public Works
-Oversee the November 2000 Election process
-Establish the City’s new governance model
-Exercise control over the then current municipal spending
-Include citizens in decision making process
-Ensure transparency of the process with open communications

Claude Bennett issued the Final Report of the Transition Board on January 25, 2001. He declared the implementation of a leaner more efficient municipality was underway. There was a reduction of 1,100 employees to prove it. The Board had also identified annual savings of $86.5 million. The resident taxpayer would see these savings after the third year of amalgamation and annually thereafter.

This was something resident taxpayers could appreciate. It didn’t last long, if it even began. Currently the city structure is a mess, one region against the other. Then we had Staff with their own agenda tending to get into the political nature of the amalgamation beast. Rather, Council should have been flexing its muscles and giving detailed direction to Staff. It seems Council did not want that responsibility. Between Council and Staff, in many cases spending habits were simply not logical.

If you look at my July 22, 2008 report on City of Ottawa revenue and employee expense, you will find that none of Claude Bennett’s declarations come to fruition. Most are not his or the Board’s fault, but I do question his declaration that 1,100 employee positions had been eliminated.

One would not be able to recognize the current structure of the City versus the organizational structure implemented in the transition period. There was no reduction in Full Time Equivalent staff as the Board pronounced and while the number of FTE has not increased dramatically since amalgamation, Employee Expense has skyrocketed.

Residents of Ottawa really have to wonder why the amalgamation process was allowed. This city has a highly educated population, but it appears that participation in the political process is not something that the educated do.

It is too late to go back to the jurisdictional structure prior to amalgamation, but it is not too late to downsize the city operation as it was meant to be. It is better late than never.

The former Mayor and the current Councillors (elected since Nov 2000) are responsible for the financial mess that the City is in. Senior City Staff aren’t receiving any bouquets either. Staff has been reluctant to be transparent in the financial aspect of the City Operations and I presume that they have been able to confuse some of those long term Councillors without difficulty. However, the buck stops at the former Mayor and Councillors.

Keep tuned for disclosure of areas of excess that require the attention of the resident taxpayers now.

Note: If you want to read the final report of the Transition Board (2001), log onto the Ottawa City site and search for “Ottawa Transition Board Final Report.”

Bill O’Malley

Ottawa

Comments to: wmomalley@gmail.com