How Guelph can go broke not controlling public employee compensation
By T. J. Fletcher
August 15, 2012
Every year the provincial government publishes its Sunshine List naming all those municipal public servants in the province being paid more than $100,000.
The most recent figure for Guelph was 47 city employees earning more than $100,000.
Along comes the announcement that in 2009 there were 64,078 public workers in Ontario earning more than $100,000 a year. Fast forward to 2011, and the number has surged to 78,910, an increase of 23 percent.
This statistic includes all municipal employees in Ontario. This is where the great divide occurs. The taxpayers pay municipal employee’s salaries, wages and benefits, including a portion of pension costs. They pay it through property taxes and user fees with a small portion in grants from senior governments.
The greatest bulk of municipal revenues come from property taxes. Under provincial law, all municipalities must balance their budget every year. The same does not apply to the provincial or federal governments who run deficits. In the case of Ontario the current deficit is $16 billion.
In the case of Guelph, there has been an exponential growth in the number of fulltime city employees, since the Karen Farbridge administration took over in 2007. This was accompanied by a growing number of senior staff that breached the Sunshine List of earning more than $100,000 a year.
Here is what’s happening:
This growth in numbers of staff and generous pay packages has thrust tremendous pressure on the city budget process. Remember it must balance every year.
Today (2012), 89 per cent of the annual Guelph budget is dedicated to staff compensation, retired, present and future.
The growth of staff in 2006 of 1,148 fulltime equivalent (FTE) staffers earning an average of $ 82,563 in salaries and benefits to today’s estimated 1,508 earning an average of $103,054. That’s a 31.2 per cent increase in five years.
How does that match up with the growth of population of the city? The population in 2006 was 118,000. Today it is estimated to be 122,000, a 4,000 household increase or 3.38 per cent increase.
How then can the Farbridge administration justify increasing the staff by almost ten times the natural growth of the city?
Skewing all this is the influx of 22,000 University of Guelph undergraduates in the fall. The arrival brings pressure on city services including transit, water and waste facilities, traffic control, police, and fire, EMS personnel, engineering and building inspection services.
For this, in lieu of property taxes owed by the University, the city receives $75 per student or $1,650,000 a year. That’s about what it would cost to hire 15 additional police officers and firemen. And all these additional attributable costs fall on the taxpayers’ shoulders.
It’s unfair and unreasonable, yet the Farbridge majority on Council continues to ignore the growing problems of financing a bloated staff. Plus the University smugly sits back protected by a provincial government property tax directive dated back to 1983.
Only the people can change this.