Bill Hulet Editor


Here's the thing. A lot of important Guelph issues are really complex. And to understand them we need more than "sound bites" and knee-jerk ideology. The Guelph Back-Grounder is a place where people can read the background information that explains why things are the way they are, and, the complex issues that people have to negotiate if they want to make Guelph a better city. No anger, just the facts.
Showing posts with label Guelph Budget. Show all posts
Showing posts with label Guelph Budget. Show all posts

Sunday, January 21, 2018

Recycling is REALLY Difficult, or, the Curious Case of the Coffee K-Cup



Years and years ago, when I was in university, I lived in a shared house with a bunch of other guys. One day I came home from school and I noticed that our recycling "blue box" was on the curb, un-emptied. On top of the newspapers, yogurt containers, and so on, one of my housemates had dumped a bunch of rotten apples, which (of course) meant that the recycling pickup dude had passed it by. I removed the apples and brought the blue bin back into the house. I then asked the person responsible (who's nickname was "Bizarre"---you can imagine why) about the apples that had ended up on the blue bin. His answer was that "the apples should be recyclable".

Well, yeah. Of course they should have. They are now. But what Mr. Bizarre had missed is that recycling isn't just an individual choice, it's a complex social activity that requires a huge logistical network that integrates just about every aspect of our home, government, and, economy into a well-integrated web. In the process of attempting to get all these elements together, an enormous number of people are asked to significantly change their behaviour in ways that have a profound impact on their personal lives, how they do business, and, how they view the role of government. And this ain't an easy thing to do!

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I'm an environment hawk. I've never owned a car, I insulated the heck out of my house, I refuse to fly in an airplane unless absolutely necessary, etc---and even I get tripped up about what should and should not get recycled. The reason why is because what does and doesn't depends on the type of technology each municipality employs plus whether or not it makes economic sense for the city to recycle it.  It is impossible to predict whether something is supposed to be recycled or not unless you have a pretty good understanding of the local recycling infrastructure. To illustrate some of the complexities involved, consider the Keurig coffee system.

In case you've just returned from Mars,
this is a Keurig coffee machine.
image c/o Wiki Commons

I use the word "system" advisedly, because when you buy one of the coffee makers, you are making a personal commitment to purchasing the specific disposable, one-use pods that go into the machines too.

The thing on the left is a coffee cup, the item on the right isn't
a creamer, it's a coffee pod---which is the villain in this drama.
image c/o Wiki Commons
This creates a huge problem for municipalities because the pods are an order of magnitude increase in complexity for recycling as compared to loose coffee grounds. The problem is that the Keurig pod is a composite created from several different feed stocks---all of which have to go through a different process in order to be recycled.

Coffee grounds from a traditional coffee maker---
you just put them straight into the compost. 
Image from "My Earth Gardenused under "fair use" rule.


The K-Cup, on the other hand, consists of a plastic shell,
inner liner basket, and, coffee---all of which need to be
separated and sorted into different recycling streams.
(Image used under "fair use" rule, from Smithsonian Magazine,
Originally from Green Mountain Coffee.) 


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Krups Espresso machine.
Just as easy.
Image c/o Amazon
under fair use rule. 
Reusable k-cups.
What's the point? "Brew-Oro" 
re-use k-cups. Image
c/o Amazon under
fair use rule.
It is true that there are reusable "k-cups" that you can purchase for a Keurig machine, but the whole point of buying one is the "convenience" of the disposable pods. If you decide to buy a reusable pod, you would be much further ahead to purchase something like an espresso maker.  I have a simple "Krups" machine and all I have to do to load it is pour in water, spoon some coffee in the metal "pod", and run it. The cup that holds the coffee cleans by tapping it with a spoon, which knocks out a neat little "puck" into the compost bucket. No fuss, no muss, and just as convenient. My Krups cost---if anything---a little less than a Keurig to buy, and certainly the coffee is a lot cheaper than if I bought it in disposable k-cups. (If you don't like espresso, toss a shot or two in a mug and fill it the rest of the way up with boiling water, and you have an "Americano".)

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The question that the naive citizen is confronted with when they contemplate a disposable K-cup is "what to do with it?"

The first option is to recycle it. Unfortunately, as I pointed out above, it is a manufactured composite that consists of several different parts, all of which have to be separated out and sent into different streams.

It turns out that this is "a thing". Here's a YouTube video of a woman who took on the job of recycling the Keurig cups from her workplace.


And here's a handy, dandy, tool that you can buy (of course) and use to recycle those dastardly k-cups.



Once you've actually separated the k-cup into the three (or four) components of: plastic shell, foil top, coffee filter, and, coffee---then the citizen can separate them out for recycling. Looking at the Guelph wet dry guide to sorting your trash, it would appear that the coffee and filter paper can go into the composting stream, however, the foil lid needs to go in the garbage. And also, if you don't wash the cup assembly, it should go into the garbage too.

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But wait! There's an added complexity. K-cups are small, which is a problem because it is difficult to separate them out of other parts of the recycling stream. In the words of the past Executive Director of the Municipal Waste Association (and all-around good guy) Ben Bennett,

Although the various components that make up a coffee pod, if separated, may be recyclable, recycling and sorting equipment is not designed to handle such small pieces. Even if new equipment were introduced, any separated material would be of such low value it would not justify the cost.

"The Coffee Pod Dilemma", Ben Bennett, April 2017, Municipal World, p-12 

Of course, all this complexity is not really an issue to the companies making the k-cups. They know that their customers will gladly disassemble all their products, sort them into different streams, and, municipalities will gladly set aside a fraction of people's taxes to pay for the complex sorting machines that are needed to carefully sort out these tiny pieces of plastic. In fact, they have provided a YouTube video that explains how how simple the process really is, and have given a firm timeline for when all municipalities in Canada will have their machinery in place to do the job! (I especially like the sorting machines that they have designed that sort all the different plastic types into their respective streams. Isn't technology wonderful?)



I hate to rain on the Keurig parade, but the animated plastic sorting system that you see in the above video is not quite exactly how stuff is sorted at the Wet/Dry facility in Guelph. (Fast forward to slightly after the one minute mark, if you are in a rush.)



As you can see, there are no groovy magical machines that sort a bunch of garbage into different streams---paper, plastic, glass, etc---instead there are just a bunch of poorly paid people trying to keep up to a fast conveyor belt. Moreover, the same process is used to separate plastic items into different streams. (If you don't know what I'm talking about, look at the bottom of a plastic item and you'll see one of these logos.) If you mix up the different types, you contaminate the feed stock and this dramatically lowers the value of the reclaimed material.


Yup, that's right. There are seven different categories of plastic
that need to separated from one another. And, it's done by hand.
Now toss in tiny Keurig cups and see how efficient the process gets.
Image used by "fair use", from "Eartheasy". 

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We interrupt this detailed and depressing deconstruction of recycling as a complex social phenomenon to insert a venal plea for money! Yes, being a journalist is work. And in order to ensure that people actually create information that allows citizens to make informed decisions during elections, there needs to be some positive feedback mechanism for people to reward the "creatives" who do the research and writing. Luckily, we now have "Patreon", which allows people to make small payment subscriptions to bloggers who are trying to fill the void left by the decline of mainstream newspapers. (Thanks Susan for your monthly pledge---you are awesome!) You can also leave a one-time donation. Both options appear on the right hand side of the page. If you can't afford to pay even as little as $1/month, that's OK. You can also help by sharing the the "Back-Grounder" link on social media with your friends. Now back to our main event!

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I hope that I haven't lost anyone with my exhaustively detailed exposition about why it is ridiculous to suggest that people will be recycling their Keurig pods. Even the industry can understand the problem, so there has been another initiative, one that suggests that there is a composting k-cup, one that you just toss in the green bin and which then breaks down into plant food. That sounds ideal. Instead of separating the plastic bits into separate streams for recycling. All you have to do is toss the used pods into your green bin.

Three years ago there was a public relations flurry in Guelph about the "composting" coffee pod that had been developed at the University of Guelph.


The problem is, however, that just because something can be composted under ideal conditions in a system designed for this sort of item doesn't mean that the specific system that any given municipality uses to compost municipal waste will be able to do so.

The thing to realize is the importance of velocity to composting. That is to say, some things break down faster than others. To illustrate the point, consider the difference between raw steak and beef jerky. You would never leave a steak in a jar in your pantry for even a week because it would start to rot. But you can leave jerky there for months if not years. It's the same thing with stuff you toss in your green bin. Your banana peels and apple cores are like raw steak---they break down fast. A "compostable" k-cup is more like the jerky. As you can see from this YouTube video, the Guelph composting system is quite complex and is designed to do it's job in only around 60 days. (Again, if you are in a rush, skip the first minute or so. It also refers to plastic bags instead of bins, but the process is still the same as it was back before the transition to the new bins.)




Contrast this with the definition of "compostable" that is used by the Biodegradable Products Institute (BPI). According to the good people at the Municipal Waste Association, to be certified by the BPI a product has to be degraded after 180 days, not the 60 that most municipal waste streams usually use. This places the coffee pods securely in the "jerky" category, not the "raw steak" one. And indeed, it is the case that municipalities have found that the "theoretically compostable" k-cups actually don't break down in composting systems like the one Guelph uses. This is tremendously important, because if something takes three times as long to process, the city would have to have three times the current processing facilities to "cook" the compost long enough to ensure that everything breaks down.

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Even worse, composting facilities have to take into account what was explained to me years ago as "the pajama syndrome". That is 10% of citizens will drive across the city at midnight in their pajamas to recycle their waste. Another 10% will only recycle if there is a revolver pressed against their temple and a finger is slowly tightening on the trigger. The other 80% are somewhere in between and will mostly only pay the absolute minimum of attention to the recycling process. This is why recycling programs have to be very, very simple and clear if the city doesn't want people to screw things up by tossing the wrong stuff in the streams. And putting out different brands of k-cups, advertising them as being "recyclable" (when they really aren't), or, "compostable" (when they really aren't)---both of which look almost exactly the same---is just asking for trouble. This is because the plastic cups will get into the compost and screw up the compost quality, and, the composting cups will get into the plastic stream and screw up the plastic feed stock quality.

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The problem is that when private sector researchers are working on a new product whether or not the product can be recycled or composted using the existing municipal systems is just not one of the design criteria. And when the product moves from the lab to the point where the public relations and advertising people start touting it to the general public, there is zero incentive for the company to point out this fine detail. It really doesn't matter at all to the company if the product actually does cut down on waste---the real utility of being "recyclable" or "composting" resides in the ability of this label to convince the public that it is doing something good so they will buy that product instead of one from their competitors. This is the phenomenon known as "Greenwashing".  This isn't some sort of awful conspiracy or proof the evil nature of the people involved. It's just an aspect of the "invisible hand" of the marketplace.

And I use the phrase "invisible hand" advisedly. If you asked everyone involved in the process of trying to confuse people about whether it is a good idea to promote disposable coffee pods, you would probably find some sort of compelling narrative about why what they are doing is a "good thing". The researchers in the laboratory are trying to come up with innovative processes that might eventually be useful---even if they are exaggerating now. Certainly, the money that comes from the private company helps fund the education of grad students. The people writing the press releases are probably trying to keep a good job that they need to pay the mortgage and student loans. And the guy who runs the company that sells the coffee pods is probably trying desperately to keep his company afloat in a tremendously cut-throat market. (A lot of business people really feel a sense of obligation towards their employees and investors, and if they don't keep the profits rolling in they know that they will have to lay people off and lose people's life savings.)

So each person involved in this change has a tremendous personal pressure to "accentuate the positive, and negate the negative", which means that the actual truth of the matter---that there is nothing even remotely "environmentally-friendly" about these coffee pods---just never really gets said. None of these people have decided to be like Shakespeare's Richard the Third and "make good their evil and evil their good". They just realized which side of the bread was buttered and followed the line of least resistance. This isn't surprising---that's how one gets and keeps these sorts of jobs. That's not a conspiracy, or even real malfeasance, it's just how our economy works. The problem is that competition (the "invisible hand") forces people---even if they have the best of intentions---to do things that are against the public interest. So it's important to understand that Capitalism, the "free market", or whatever you call it, has a direct interest in subverting recycling programs, and it will do it every chance it can. 

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This really shouldn't be a huge surprise to anyone. After all, whenever any new technology has come onto the scene there has been a "time lag" between the invention exploding onto the society and government realizing that there needs to be some sort of regulation to keep the "invisible hand" from strangling the citizenry. We have a huge web of government regulations and agencies that keep businesses from poisoning, electrocuting, blowing up, etc, ordinary Canadians. These social constructs are at constant war with the free market as business people try to convince governments that these regulations are just "mindless red tape" that get in the way of them making "an honest buck". Eventually, the federal and provincial governments, plus international treaties will reign in the power of corporations to create huge mountains of trash. (I have no doubt that this is coming. For example, Brussels has recently "declared war on plastic waste".) But before they do, municipal governments will be stuck cleaning up the mess left behind by the "miracle of the free market". 


Without regulation to control the creation of garbage, this is our future.
So, we will have regulation---eventually.
Photo from Phys/Org under fair use rule. 
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My take away from all the research I've done for this article is that the people who manage the municipal recycling programs are placed in an almost impossible situation. They don't control the laws governing packaging---those come under the jurisdiction of the federal and provincial governments. They don't even control the laws that govern advertising, so they can't stop marketing campaigns that confuse the citizenry about what does or doesn't go into the blue or green bins. They just get stuck with a bewildering array of products and materials---both new and old---that they have to figure out how to keep out of the landfill. Managing a municipal recycling system is insanely difficult and it would be a miracle of miracles if a city were able to consistently do so with both a high rate of recovery and keeping within a modest budget. So remember this fact when you hear people complaining bitterly about the Guelph wet/dry. 

I have plans for future articles on this subject. My next one will hopefully be about how the spot market for recycled materials and a recent decision in China has impacts on the Guelph wet/dry.

Saturday, October 21, 2017

Guelph's Local Boards---Part Two

My last post was about a part of Guelph's budget that most people don't know much about, the Boards that administer various government services through an "arms-length" relationship with Council. I'm continuing this story here with the Elliott, the Downtown Guelph Business Association, and, the Guelph Police Service Board.

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The Elliott

Like, I suspect, many people, I didn't know that the city of Guelph was involved in the management of a long-term care facility for the elderly people who because of either financial or physical disabilities need a place to stay. But the government of Ontario in the "Long-Term Care Homes Act of 2007" has mandated that all "upper" or "single-tier" municipalities "shall establish and maintain a municipal Long-Term Care home or help maintain a LTC home with another municipality" (from a press release by from our local MPP Liz Sandals' office in 2014.)  Up until 2014, Guelph was involved with Wellington County to support Wellington Terrace in Centre Wellington, but after that date it decided to end the partnership with the County government and take on responsibilities for its own long care facility at "The Elliott".

The Elliott was originally started as "the Guelph Home of the Friendless" in 1903 and was initiated by a legacy left by a Mr. George Elliott in 1903. To put this time in context, this facility was built at roughly the same time that Guelph applied for, debated about, and, built the Carnegie library. This was an insanely busy time for the city, as in a short period of time it dealt with public transit, intercity transit (street cars and what became the Guelph Junction Railroad), sewers and water treatment, electricity and telephones, a public library, the armoury---lots of Council meetings went on into night, just like now!

This is the original "Guelph Home for the Friendless", Delhi St.
Picture c/o the Elliott Community website. 
The Board of the Elliott, which is defined by "The Elliott Act of 2002", consists of between five and eleven people---one of which is the Mayor of Guelph, or, someone he appoints to represent him. Currently I don't see the Mayor listed on the Board of Trustees, so I can only assume that Councillor Andy Van Hellemond is acting in his stead. In addition, there are nine other people, all of whom seem to be qualified in one way or another to manage a large not-for-profit corporation. Even though only one position on the Board is appointed directly by Council, the other members are approved by it from nominations forwarded by the existing Board. And if none of the nominations meet with Council's approval there is a process where Council can eventually appoint their own people. Moreover, Council also has the right to remove Trustees that it feels are not doing a good job. So while the Elliott Board is separate from Council, with a little effort (and a lot of political will), it could become a creature of local government. But I cannot think of anything short of a truly enormous scandal that would force Council to take on that responsibility.


The Modern Elliott Community on Metcalfe St.
From the Elliott Community Website

Looking through the Canadian government's registered charities site, I can see that the Elliott had a total revenue and expenditure of $15 million in 2016, 37% ($5.7 million) of this came from the Government and 63% ($9.5 million) came from "other sources" that specifically excluded "receipted" and "non-receipted" donations (there was a statistically insignificant amount, $16,005---0%), and, "gifts from other charities". I can only assume that the 63% in question came from investments and fees paid by residents (even the poor elderly get pensions from the government.) Since Guelph gave the Elliott $1.5 million in 2016, that comes to 10% of the senior's community's yearly budget, or, 26% of its direct support from all levels of government. For Guelph Council, this money comes to .4% of the 2016 city operating budget. There is an increase of $5,000 over last year, but that only comes to a .34% increase. 

While it could be argued that what Guelph spends on the Elliott doesn't mean much to Guelph (.4%), it means a very great amount to the Elliott (10% of total revenue.) In my own personal opinion, this is money well-spent if it helps people maintain a minimum of dignity while living out their last years of life.

One last thing, however. I have been restricting my discussion about Boards to the operating costs (mainly because I want to talk about the capital budget and city debt separately.) It turns out that the debt of the Elliott in 2014 (when the city took over supporting it and walked away from Wellington Terrace) was $11.6 million, or, about 9% of Guelph's capital debt. And, in 2017 the percentage of Guelph's operating costs for debt servicing is set at slightly over 8%. (More about this in a future post.) So this would suggest that servicing the debt on the Elliott amounts to something like .79% of Guelph's operating budget.  This is worth mentioning because this is another case of the Ontario government imposing a significant cost on Guelph that Council has little say over. (Still, put in percentages instead of numbers, it is a much less threatening figure.)

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The Downtown Guelph Business Association

I sometimes hear people complain bitterly about how much attention Guelph Council devotes to the downtown. They say "why doesn't the city put more attention into the rest of the city?" Well, there are several reasons why.

First of all, the province has mandated that the downtown area needs to expand and should intensify because it believes that it is the area where people can live while having the lowest environmental footprint. Primarily, this is because this is the densest part of the city, and the more people who live per kilometre of frontage, the cheaper the servicing cost per unit.  (I've explained this in a previous post, so I'll just mention it in passing. If anyone wants learn more, see it there.)

Secondly, the downtown core is very different from other commercial areas---like shopping malls and "big box" centres---in that it is built around public instead of private space. This has a profound effect on human activity in the area. Shopping malls restrict access to specific times of business, and, only allow a limited number of activities on their premises. This means that public assemblies, petition drives, protests, marches, etc, are almost always banned from shopping malls so the only place that they can happen is in the downtown core. This is also why bars and cafes congregate in the downtown---malls don't want to deal with problems associated with public intoxication, so they usually close so early that they discourage these sorts of businesses. It is also why you see so many beggars and people with "issues" in the downtown---the "mall cops" chase them out of the privately-owned commercial plazas.

The third point most people don't know about is that because the downtown is so dense it is also the part of the city that provides the greatest amount of tax revenue per square metre. Consider this graphic (click on the image to get a bigger picture):
Guelph map of tax density.
Graphic c/o Guelph City Hall
The bumps on this map represent the revenue that the city gets from each specific piece of land in the city. The colour of the individual bumps tells how much each area is valued for tax assessment. The various shades of green represent up to $2 million in value. The white through to light orange are from $2 million to 7.5. The light and dark orange are $7.5 million to 20. Red is $20 million to 30. And purple is $30 million and over. A lot of the orange is downtown, plus all of the red and purple. It's easy to see that the downtown core is tremendously important as a source of tax revenue for Council.

Because the downtown is so tremendously important to the environmental, social, and, financial well-being of the city, Council has mandated a special arms-length body to help administer it. This is the Guelph Downtown Business Association.

People might be interested to learn (I was) that organizations like the Guelph Downtown Business Association---generically called "Business Improvement Districts"---are an invention by the Ontario government. In 1970 a group of business people approached the Ontario government and got it to approve legislation to set up the first one in Toronto's "Bloor West Village". According to an official Ontario government handbook, in 2010 there were 270 in Ontario and a further 500 across Canada, over 2000 in the USA, and, many thousands more in the rest of the world.

Unlike the other boards I've mentioned, the Downtown Guelph Business Association pays for itself through an extra levy added to the assessed taxes for a commercial property. In 2017, that came to .39%, and (interestingly enough), .27% for unused space (empty stores, vacant lots, etc.)  A pamphlet put out by the Association gives the following real examples:
  • Medium size coffee shop: $31.06 monthly
  • Medium size restaurant: $219.27 monthly
  • Specialty retail store: $290.92 monthly
  • Small fashion retail store: $66.17 monthly
  • Large professional office building: $928.25 monthly
  • Large office tower: $3506.00 monthly (guess who this is!)
This added up in 2016 to $472,000, which may seem like a lot of money, but really only comes to something like .1% of Guelph's total gross expenditures---and self-financed at that. Not a bad price, considering how much of Guelph's total tax budget comes from the downtown. 

One last thing to consider. In June Council decided to expand the boundaries of the Business Association area, which means (among other things) that some businesses are now expected to pay the levy and receive the benefits that come along with membership. 

New (and old) Boundaries for Guelph Downtown Business Association
From a pamphlet by the Business Association
(Click on the image for a larger picture.)
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Yup. It's time for the big blue type. I heard a lot of "bo-ho, bo-ho" when the "Guelph Mercury" went under. Now we only have a "community paper" that comes out once a week and an on-line news site where journalists are only allowed to write extremely short "he said, she said" stories. If you want in-depth, fact-based stories about local issues, you have to go elsewhere---like here. And, to be honest, some of you are going to have to pay for it. Ask yourself, 'how much did I pay for a subscription to "the Mercury" or any other newspaper?', and, 'why won't I pay any money at all to read an on-line news source?'

If you are young, and have never paid for news, ask yourself 'How do the other places pay for their staff?' If you won't pay for the product on-line---YOU are the product. Your personal information is being sold to marketing agencies, political parties, the Russian mob, etc. Is this the world you want to live in?

If you can afford it, consider making either a one-time donation or sign up for a monthly micro-payment through Patreon---even one dollar a month helps. It is a vote for local, fact-based journalism in a world increasingly dominated by fake news. Also, something everyone can afford to do is share the "Back-Grounder"'s link on social media with your friends. I know that I'm not writing click-bait, but maybe learning how city hall actually works is more important than pretty pictures of kittens or the latest atrocity from Trump-land.

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The Guelph Police Services Board

Police services are pretty much the most "hot button" of the boards and shared services that I'm going to discuss. Primarily, this is because they are by far the most expensive thing that the city deals with through the stand-alone board structure. It is also because the police are a unique service in several different ways. 

In order to understand how policing is structured, it's important to remember that in Guelph the police have a monopoly on the use of violence to pursue government policies. When modern police forces were first organized in the United Kingdom, this was acknowledged physically on the "billy clubs" that were issued to policemen. Take a look at these examples of 19th century British police weapons.

19th century Edinburgh police clubs,
photo by Kim Traynor, c/o the Wiki Commons
As you can see, all of them have a Royal crest on them that shows that these are official instruments of government authority and that the constable who wields them does so under its authority. Indeed, this was understood to be the officer's official "warrant card" that gave him his special status as a police officer. 

Ultimately, this monopoly on the use of force is why the police have a special board that manages them by setting local policy and appointing the chief, instead of the American practice of either direct rule by an elected Sheriff or a chief appointed by Council. The Canadian system doesn't want local politics to get involved in controlling the use of force because there are far too many ways in which this power could be abused by either corrupt politicians or "mob rule" that tramples on minority rights. 

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If people have a hard time imaging just how badly things can "go wrong" in police management, consider the example of Ferguson Missouri. Most readers will be aware of the rioting that took place there as a result of the shooting of Michael Brown. I don't want to deal with the specifics of that case, but rather the context that led to the scary confrontations between police and demonstrators after the fact. Instead, I'd like to refer to a report titled "The Municipal Courts Whitepaper" that was released by a group of volunteer lawyers called the "ArchCity Defenders" shortly before Michael Brown's death. 

[anger at the police is] the product of a disordered, fragmented, and inefficient approach to criminal justice in St. Louis County. Municipalities are failing to afford indigent defendants legal counsel and refusing to make reasonable bond assessments. The municipal court system fans the flames of racial tension, oppression, and disenfranchisement by allowing municipalities to appropriate the courts to act as governmental debt-collection agencies and implicitly charging courts with ensuring the municipalities’ fine-generated revenues are sufficient to maintain an inefficient governmental operations.
Pgs 4-5, "Municipal Courts Whitepaper", ArchCity Defenders 

What was happening in the town of Ferguson was that the city police force was---on the direction of city Council---acting as a revenue generation tool for the city. It was going out and getting as many fines as possible from the citizenry, not only to pay for the police force, but also to support other local government activities too. These included the usual "petty offenses" like jay walking, but also more Byzantine regulations such as a municipal bylaw that required all households to purchase permits for garbage pickup---whether they put any trash out on the curb or not. And if someone received a ticket and didn't show up to pay it, they were then fined even more for being a "no show". (The ArchCity Defenders documented that the local municipal courts would encourage no-shows by doing things like posting a time on a ticket when the doors to the Court House weren't even open.) If someone was put into jail for not paying a ticket, when they were released they were still expected to pay the fine---and could be jailed again for not paying it.

The effect of this revenue generation system was especially hard on the poor because it was often extremely hard to not only pay the fines, but having to show up for court dates---let alone being put into jail---often resulted in people losing their jobs. Moreover, the blatant illegality of much of this meant that officers were not encouraged to enforce these regulations on middle-class individuals (ie:  white) because anyone who could afford a lawyer could easily beat any of these fines.

In effect, the police in Ferguson Missouri were being used as an occupying army against the poor in order to extract as much money as possible so the local city Council could avoid raising taxes on anyone else. This created a powder keg of resentment in the community that exploded when Michael Brown was killed. The individual actions of Mr. Brown and the police officer who shot him were pretty much irrelevant---the killing was just the straw that broke the camel's back.

Police at Ferguson Protests, Voice of America photo.
Public domain, c/o Wiki Commons
This sort of problem will probably never happen in Guelph---because our police force is governed by the Police Services Board. And I, for one, believe that that is a very, very good thing.

(Incidentally, if you've ever had a hard time understanding what the term "institutional racism" means---this is a pretty much textbook case of it.)

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The reason why I say that what happened in Ferguson Missouri cannot happen in Guelph is because the province has mandated that the police force be managed by a five member board that consists of the Mayor, one other member of Council, a local person who is independent of Council but appointed by Council, and, two members appointed by the provincial government. The two provincial appointees are tremendously important, because they provide "eyes and ears"---plus two votes---that ensure that the local police force doesn't become dominated by some sort unsavory local political agenda. Moreover, Ontario sets out very clearly a great many aspects of how police boards, police chiefs, and, police in general, are expected to behave. As long as those two appointees from the province are doing their jobs, there is no way that a city can "go rogue" and make its police into something of a local occupying army.

This isn't to say that there aren't problems with policing in Ontario. Problems exist in every aspect of human endeavour.  But the way the board structure is set up, the majority of potential problems in policing are Ontario-wide instead of city specific. Since this article is primarily focused on financial issues, the province-wide issue that I'd like to discuss refers to the cost of policing. When you talk the price of policing, you are basically talking about the wages of people who work for the police because the salaries and benefits account for 91% of the police budget ($36.6 million out of $40.1 million in 2016.) 

The problem isn't that police officers don't deserve to get paid a decent wage, the problem is that because of the specific role they play in society means that they cannot participate in collective bargaining the same way as other labour groups. They are forbidden to strike, and, city Council cannot lock them out. This means that the whole frustrating, idiotic game of negotiating "chicken" that most other people go through is denied them and their management. As a result when negotiations head into an impasse they end up going to arbitration. And arbitrators have a tendency to "split the difference" between the two sides.

So what's the problem? Compromise is essential to life, isn't it?

Wage increases by sector and year, plus Consumer Price Index (CPI)
Graph c/o Association of Municipalities Ontario (AMO)  2015 report,
"Building a New Public Safety Model in Ontario"

As you can see from the above, wage increases for police officers in the top 12 cities in Ontario have never been lower than the rate of inflation or wage increases in for either other municipal workers or the private sector. Take away the ability to lock out workers and take everything to arbitration, and it appears that workers get larger wage settlements.

Well, so what? Well, looking at the police department website you can see the following pay scale
  • Staff Sergeant:  $116,596.69
  • Sergeant: $105,211.43
  • 1st Class Constable: $94,877.39
  • 2nd Class Constable: $82,543.31
  • 3rd Class Constable: $72,865.82
  • 4th Class Constable: $62,239.56
For the rank of 1st Class Constable, Sergeant and Staff Sergeant, the rate of pay increases with years experience to include:
  • In completing 8 years experience add 3%
  • In completing 17 years experience add 6%
  • In completing 23 years of experience add 9%
Just to put these salaries in a national, demographic context, according to a 2013 CBC Business article, the median salary in Canada was $27,600/year. When you talk about incomes, it's really important to differentiate between median, average, and, household incomes. A median income means that just as many people make less than this income as make more than it. An average income mixes everyone's income together and then divides by the number of people---which tends to be much higher than the median income because of the astronomical amount of money a very small number of super-rich individuals make. Also, it is important to understand that because of the massive change in society that resulted in most women entering the workforce since the 1960s, that for many people the household income (both members of a couple's combined salaries) is just as important as both average or median income.

A government report from 2013 that the Globe and Mail got it's hands on suggested that in 2013 the "middle class" could be roughly defined as a household that earns between $54,160 and $108,300 per year. Since most couples do have both spouses working, it appears that being a police officer with a few years experience is a pretty well paid job. So much so, that probably a fair percentage of officers have actually progressed beyond the status of "mere" middle-class into the realm of wealthy.

What does this all mean in the context of city finances? Well, last year Guelph's total city budget came in at $396.1 million, so $36.6 million dollars for police wages comes down to 9% of the city operating budget---not an inconsiderable sum. To quote again from the AMO report:
Ontarians pay the highest policing costs in the country. This includes both provincial and municipal expenditures. In 2011, Ontarians spent $320 per capita on policing. We estimate it is at least about $35 more than Albertans, $56 more than British Columbians, and $24 more than Quebecers. Nationally, Ontario’s share of municipal policing costs is 48%, although Ontario only makes up 39% of the Canadian population. Some may say that half of the national problem with the cost of policing is owned here in Ontario.
"Building a New Public Safety Model in Ontario", 2015 AMO report, p-9.
  
This isn't just a question of how much officers are paid under arbitrated labour settlements. Cities often complain that the existing board structure keeps Councils from being able to structure workplaces in more efficient ways. For example, Guelph used to have police officers enforcing noise bylaw complaints, which is not a terribly effective use of a highly paid police officer's time. Now we have a separate class of people---"blue hornets"---who enforce city bylaws. This frees up officer's time for other duties, results in much better enforcement of things like noise bylaws, and, saves the tax payers money.

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Another part of this issue that really needs addressing is the emotional component. A large fraction of the public tend to view police officers significantly differently from other municipal employees. This means that while other people like bus drivers, garbage truck drivers, sewer workers, etc, are "fair game" when it comes to saving money through hard bargaining or even privatizing service---the police are "off limits".

I suspect if you asked most people who think this way why this is, you would get the answer that police have a dangerous job. Some people think that police officers routinely get killed by criminals. The problem with that point of view is that it is simply not true. According to Statistics Canada, the top most dangerous jobs in Canada are:
  • Mining and quarrying: cutting, handling, and, labour
  • Construction: insulating, labouring, pipefitting and plumbing
  • Flying: pilots, navigators, and, flight engineers
  • Timber: cutting, hoisting, sorting, and, moving
  • Fishing: net, trap, and, line
  • Truck drivers  
If you want to look at the objective truth, here's a graph of police homicides by year in Canada:

Police homicides by year, 1961 to 2009,
Statistics Canada 
Not only are these killings very rare, they seem to be getting rarer as time goes on. Of the police who do die, the vast majority are people who get killed by much more mundane things---like traffic accidents. Why is there such a disconnect between the perception and the reality?

First of all, people's perceptions have been warped by television and movies. Violence is an easy way to get audiences to pay attention to a plot, script ideas are often easily obtained simply by reading court documents, and, the work-place nature of policing makes it easy to craft individual stories for a weekly series. As a result, Hollywood has created an huge number of shows about policing---shows that suggest that being a police officer today is more dangerous than manning a trench in the Western Front in WWI. 

Secondly, police funerals are public spectacle that project the image that the deaths of police officers are somehow "worse" than those of anyone else. This tugs at the heart strings of most people, and, because it is a funeral and someone has died, it is usually considered horribly impolite to draw people's attention the point that this is---at least unconsciously---a form of propaganda. It is, in effect, a way of building the impression that what is not an actually a terribly dangerous job is very dangerous indeed. What would people think about logging, mining, construction, etc, if the downtown core was taken over and a mass spectacle organized every time one these workers was killed on the job? 

Finally, it is without a doubt true that being a police officer can be a pretty miserable job. They routinely have to deal with people at their very worst. And they also have the tremendously thankless task of processing people that they know they will see over and over again because society simply will not allocate the resources that would really be necessary to actually help them. Being forced to repeatedly intervene but not being able to actually help must be the most soul-destroying thing that a person can be called upon to do.

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But this raises a second issue, one that the author of the AMO report addresses.
Policing is not the only public service or profession which contributes to safety and security. In fact, there is an entire social safety web – from the quality of municipal water and waste systems, to the education system and the healthcare system – every single element of public service is geared towards safety and security. All play a part. If we spend too much on one and starve the others, we are just as likely to risk societal discord.
"Building a New Public Safety Model in Ontario", p-7

Money spent of police officers is money not spent on other social services, some of which might actually be able to stop the "revolving door" aspect of policing that makes being a constable such a frustrating thing. 

To be totally fair, however, to a large extent it can seem a lot cheaper to hire a police officer than to deal with the complex of problems that have created the problems that they find themselves dealing with. But having said that, I would draw people's attention to an issue that Malcolm Gladwell has identified in his famous New Yorker article "Million-Dollar Murray".  This is that
Malcolm Gladwell,
does he have the answer?
photo by Stemoc, c/o Wiki Commons
intervening in the lives of people in each individual crisis can cost a lot more money than simply supplying people with the means to avoid the re-occurring crises in the first place. I don't want to bloat this post anymore than I have to, but to summarize his point, it comes down to the three points of:
  • anything to do with either the criminal justice system or acute medical care is insanely expensive
  • there are actually only a very small number of chronically homeless people living on the streets
  • government could save a lot of money that it currently wastes on running these people through the courts and emergency medical interventions if it just gave them an apartment and a social worker with the time to work intensively with them  

A few months back I was at one of the "Breezy Breakfasts" that Councillors Alt and Gordon organize and got to hear a little talk by the chief of police, Jeff DeRuyter. (The fellow really impressed me, bye the way.) If memory serves, he said that the police spend more than half of their time dealing with people "in crisis" rather than property crimes. If this is so, it strikes me that our police services are increasingly spending their time dealing with issues that have arisen because of holes in our social safety net. Perhaps it's time we cut back on our emotional love affair with our "boys in blue" and instead thought a bit more about the big picture.

Thursday, September 7, 2017

Making Sense of Guelph's Finances

I decided to roll up my sleeves and write an article about the Guelph city budget so I could help make the financial situation facing residents more understandable. I was more than a little afraid to do so, and the more I got into the job the more I found that that fear was justified. To give the city it's due, staff have made huge progress towards making financial information about the city more available than it has been in the past. If you look at the city website, for example, you can find a very detailed document that explains the 2016 budget. I downloaded it onto my computer and now have a 341 page pdf to work through.  But unfortunately, the fact of the matter is that Guelph has a budget that is approaching a half billion dollars a year, and it really does require a professional's eye to make sense of it---so there is ultimately no way that I can easily understand and explain all the details. This doesn't mean that a thoughtful generalist (or engaged voter) can't learn from the document, however. So I decided the best thing I could do to help readers is to identify some issues that people sometimes get wrong and which can create confusion. They are as follows:
  • using brute numbers instead of percentages
  • scaling problems that arise because of Guelph's rapid growth
  • confusion between capital and operating budgets
  • Guelph's extra "design features" that render comparisons with other cities problematic
  • emerging long-term problems that most people don't know about
  • "locked in" costs that the city is responsible for paying but has little control over
In addition, I think it is important for people to understand that the corporation of the city of Guelph has "hands off" control over and responsibility for various corporations that are either essential to the operation of the city or are the result of specific decisions in the past that fit into the long term "design features" that the city has decided to follow. These include:
  • Envida
  • Guelph Hydro
  • Guelph Municipal Holdings Inc.
  • Guelph Junction Railway

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The Simplified Explanation of the Guelph 2016 Budget---in all it's glory.
From the city website

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Why it is Important to Use Percentages:

The first thing necessary to understand about the city budget is its absolute size. This is important because people routinely throw around numbers without attempting to put them into a context. For example, it really doesn't help anyone understand local government if they are told "The total budget used by city Council and the Mayor---including both salaries and expenses---comes to $947,400! Why does it cost so much?" The issue here is that "947,400" is just a number on a page until someone puts it into a context. In many instances people automatically think about what that number would mean in their personal life. In those terms, $947,400 is about several times the cost of a person's home. But that isn't a proper comparison for things as completely different as a city and a household budget. A city is much bigger than any one individual, and does a whole lot more. A more useful way of understanding a number in the budget is to consider it as a percentage of the whole. It turns out that Guelph only spent 0.2% of the entire budget on Council.

The difference between comparing what Council costs to your personal finances to the over-all cost of running a city is emotional. When someone just uses a number instead of a percentage, they are often doing so in order to create an emotional response in the reader. Emotions bypass our reason and can often get us to do things that we wouldn't if we calmly thought about what is really the best thing to do. A professional reporter is often trying to "stir the pot" and get people angry so they will share their story in social media, which will generate "clicks" and therefore revenue for their website. Someone working on a political agenda will also do this because they want to get people angry so they will either avoid voting in the next election (because "they" are "all the same") or because they want citizens to vote for their candidate---or best of all---cut a cheque for the cause.

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People might wonder why I routinely point out how other news sites manipulate people into sharing stories so they can generate ad revenue through clicks on advertising---then ask readers of the "Guelph Back-Grounder" to share it on social media. The difference all comes down to how it's done. Revenue has to come from somewhere to support independent journalism, and you can either support it through making a conscious decision or by being manipulated by people appealing to your unconscious reflexes. What sort of business model do you want to see succeed? 

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How About Another Graph from the City Website?

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Scaling Issues Due to Growth:

It isn't hard to accept when you think about it, but most people don't know that Guelph is the fastest growing city in Ontario, and the 7th fastest growing one in all of Canada. In fact, between 2011 and 2016 Guelph's population grew by 7.7%. (Please note, the population numbers are calculated every five years through the national census. This is not an annual growth rate.) This isn't the fastest than the city has grown in it's lifetime (46% between 1951 and 1961, 51% between 1961 and 1971---and 270% between 1851 and 1871), but it is still quite high in comparison to other Canadian cities. 

Professional staff at City Hall have to take these issues into account when they do capital estimates---for both new builds and routine maintenance. For example, consider the expansion of the city police department building, a $34.1 million dollar project. It was originally built in 1960 when the city's population was 38,000. An addition was put on in 1989. The population in 1991 was 88,000---so we can assume that a doubling had occurred by then. (That would put the average annual increase in population between 1960 and 1989 at 2.42%.) The news release that came with the announcement for the Police Hall expansion suggested that this new build was to provide for the next 25 years. At 7.7% growth rates per every five years, this would suggest that in 25 years Guelph will have a total population of 191,000---a 45% increase. If Guelph didn't have to consider a 45% increase in population over the lifespan of this building project, it wouldn't be hard to believe that the police headquarters project would cost a lot less than $34 million.

Of course no one can tell what tomorrow will bring. Guelph gets its water from wells, which means that if we don't want to build an expensive pipeline to bring in water from Lake Erie, there is a limit to population growth. But it is fair to say that planners can consider a significant increase in population in the near future. This means that when it repairs, expands, or, builds new, the city has to create something with capacity that far exceeds its existing needs. This is a problem because the tax payers that are needed to pay for this expanded infrastructure are currently nothing more than a gleam in the eye of a planner. Hopefully they will arrive shortly and help pay for the expanded infrastructure, but in the interim the existing citizens are going to have to pay for a lot of the stuff that those future people will use. (And, of course, the faster that tax base grows, the greater the chance that the city estimates were too low and the facility will have to be expanded again to deal with a dramatic increase in population.)

And this isn't just a question of "big builds" like a new police station. Consider sewers. There has been a lot of work recently on expanding the sewers downtown so they can handle the increased flow from the new condo towers. Because sewers work with gravity, when you expand them you can't just open a trench and put a bigger pipe in. Instead, you have to dig down farther than the existing pipe and put the new, bigger capacity sewer in deeper. And, Guelph has it's bedrock very close to the surface---which means that putting in bigger sewers requires a lot of "jack hammer parties". (A friend who lives on Margaret Street has told me about the joys of having a year's worth of sewer reconstruction outside one's front door.)

All of this just goes to reinforce the point that it is very, very expensive to have a city grow quickly. 

So why doesn't the city just refuse to grow? First of all, it can't. The Ontario Places to Grow legislation basically forces the city to grow whether we like it or not. Secondly, there are groups in the city that really, really, really want this growth to continue. One person in 13 works in construction and 7% of the Gross Domestic Product (GDP) comes from the industry. This means that there are extremely well-motivated organizations that work to ensure that government makes no effort at all to limit growth in the city. It also means that anyone who works in construction, sells stuff needed in construction, or, has any family or business connection with either of these two types of people, is going to be extremely upset with any politician who suggests that the city should limit its growth in order to control taxes.

In fact, during the 1991 election campaign a slate of candidates (full disclosure, including me), ran on a "slow down growth" platform that pointed out that the rapid growth of Guelph's suburbs were responsible for increasing tax rates for people who lived in older areas. (This is a separate, but related issue that stems from the cost of servicing new low density (ie:  suburban sprawl) versus older, high density (ie: walkable) neighbourhoods.) This campaign so scared the Guelph Home Builder's Association that they placed a full page advert in the Guelph Mercury that warned
There are candidates in this municipal election that are against growth and economic prosperity. Send a message with your vote that you want Guelph's businesses to grow, for the employment of your children and the prosperity of your neighbours.
From Daily Mercury, Saturday, November 9th, 1991. Page 11-B 
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Since deconstructing the city budget is a huge undertaking, I've decided to split this story into "bite sized bits" instead of creating an on-line "War and Peace".  Stay tuned for the next part, which will come out as soon as I can find the time to write it.

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Here's another graphic from the budget. The city really
has done a good job on the 2016 report!

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