District Energy: Politics

And Now We Start to Talk Politics

I hope readers' heads are swimming from my discussion about the economics of district energy. That was the point. Sometimes I hear people talk about business as if it is simply a question of research and mathematical analysis. To hear them talk, all you have to do is develop a sound business plan and if the numbers work out, you borrow the money, and, make your millions. Well, it ain't that simple. Many business folks won't admit it, but a great deal of what you need to be successful in business is luck. That's because even if you are the greatest financial genius who ever lived, there are always going to be a great many things that you simply don't know enough about to make a "fool-proof investment". That's why I put in an editorial talking about "wicked problems" because if ever there was one, this is it.

As a general case I find that it's more useful to look at political conflict from the point of view of policy and general trends instead of personality, which I find may make for a more "juicy" story, but not one that helps people get a handle on a complex issue. But having said that, I realize that politics is also important. So it's time to put on my rubber Wellies, get out the manure fork, and get to that nasty job that took up so much time in my childhood.

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So what exactly am I doing with this blog? For one thing, I'm trying to fill a void that currently exists in local news. Secondly, I'm trying to create something of a "public record" that students, researchers, and, concerned citizens can use to learn about local issues. Based on feedback I get, I know that for at least some Guelph citizens I'm already filling that goal. I'm also trying to convince people to totally rethink their relationship to the news media in general. That's what this blue type part is about. I'm trying to convince people that they should be prepared to pay for the news they consume and stop relying on giant Internet companies to provide it for free. Mainly that's because it really isn't, there's always a hidden agenda of one sort or another when it comes to something that's "free". I'm also having some success on that score---people are subscribing through Patreon and contributing through the tip jar. But to really make the point I need to have more subscribers so other people can have a chance of following Adam Donaldson and myself, and try to make a living by creating truly independent news sources. If you can afford it, why not sign up as a regular subscriber? Patreon allows very small regular payments, and the important thing is to get a lot of people making small payments rather than a small number of people making bigger ones (although that would be appreciated too!)

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I've been working through back issues of Gerry Barker's Guelph Speaks, Adam Donaldson's Guelph Politico, and, using the Internet Archive's "Wayback Machine" to look at Cam Guthrie's election blog and as near as I can tell, the district energy systems were not an issue during the 2014 election. The big thing that people were hammering away at instead was the legal problems associated with the company that build the new city hall: Urbacon. It appears that district energy only became an issue after the new mayor had taken over from Karen Farbridge.

The first indication I can find that Guthrie was interested in district energy comes from an item on the Mayor's blog dated October 8, 2015 where he says that in the past ten months 

I think we’ve made some wonderful inroads in developing a new culture throughout city hall, and around the community for that matter, which is focused on the betterment of the city on the whole.

he also wrote later on

If we as a city are stating these goals publicly, and the C.E.I. [Community Energy Initiative---ie, the over-arching framework that the district energy systems fit into] policy, framework and current governance and oversight structure are setup to help direct us to achieve those goals, then perhaps we should make sure they’re realistic and that we’re actually making a positive difference.

This is why very soon the community will see on an upcoming council agenda a request from me for staff to explore the best way to present a progress report on the C.E.I and to explore the best governance and oversight structure for implementing it.

These two quotes are filled with wonderfully ambiguous, emotive terms---like "a new culture" "focused on the betterment of the city on the whole", "realistic", and, "actually making a positive difference". It's hard to understand exactly what they mean other than being the bland "positive speak" blather that we expect from politicians and sales people. (It's the nature of the beast nowadays, so I don't really blame anyone who talks like this---even though in doing so they really don't convey much information.)

After looking through a lot of electioneering I did find one particular instance where I thought I actually saw some real emotional commitment from the mayor that I think is particularly relevant to this discussion. In Mr. Guthrie's campaign website (accessible through the Wayback Machine) I caught the following post on April 2, 2014. I think it's a rare look into what an elected official really feels, so I'm going to post it in it's entirety.

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Taxpayer or Citizen? 

There’s been quite a discussion going on in Guelph around the concept of whether those who live in the city are “taxpayers” or “citizens.” 

The discussion seems to have been started by Guelph Mercury columnist Susan Ratcliffe. It was continued in a Guelph Politico blog entry by Andy Donaldson. And recently culminated in panel discussion moderated by Mike Schreiner, leader of the Green Party of Ontario and included political advisor Ralph Benmurgui, CFRU’s Beyond the Ballot Box radio host Jan Hall and Guelph Citizen blogger Andy Best. All of these discussions have led to two conclusions. 

First: Citizens = good 

This is best seen in Ratcliffe’s column, where she wrote: “Taxpayers are focused only on the monetary cost of government actions to an individual. Broader-minded ‘citizens’ care about social benefits and community values. Taxpayers ask about the benefits to themselves. Citizens ask about the benefits to community building and well-being.” 

Second: Taxpayers = bad 

“I find the word ‘taxpayer’ deeply offensive,” the Guelph Mercury quoted Benmergui as saying. “Everyone has adopted this notion of corporate service. Taxpayers want the service they want and they don’t want to pay for services they don’t personally need. The notion of the common good has deteriorated. I’m worried there may be a crisis of citizenship.” 

As Donaldson wrote: “This vision narrows the complexities of governing on any level to utterly simplistic terms: taxes are fees for service, and we should pay the absolute minimum to get the services we want and just the services we want. That means garbage collection, hydro and water services, police, emergency responders, and clean and easy to navigate roads. Public transit, the arts, cultural events, environmental initiatives, and sustainable planning are luxuries, investments desired by the leftie elites who want to use the blood, sweat and tears of the ‘Taxpayer’ as seed money.” 

Mayor Karen Farbridge emphasized this concept during a question and answer period following one of her state of the city addresses. When asked why residents should pay increased taxes for downtown redevelopment when the return on investment could take at least a decade, Farbridge replied: “You’ve got to prime the pump”. 

The duality between “taxpayer” and “citizen” is ingenuous. The arguments are being made to frame the political discourse in one particular direction. If a politician wants to focus on the needs of the taxpayer, it means they have only one goal in mind: to cut taxes, reduce services and destroy the fabric of the community. If a politician speaks about citizens, it means, no matter the cost, they are concerned about the better good and that they feel they have the best interests of the residents in mind. 

There is no difference. We are both taxpayers AND citizens.

Whether we pay taxes directly through property taxes, income taxes or payroll taxes, or indirectly through user fees such as transit fares, recreational centre charges or development charges, we are taxpayers. And we benefit from those taxes. 

So, is it too much to ask those administrating the hard-earned dollars provided by taxpayers, to be good stewards of that money? We ask the same thing of the various non-profit organizations to which we contribute, so why can’t we ask the same thing of our municipalities? 

People also contribute to their community as volunteers, parents, voters, individuals, homeowners and employees. Everything we do contributes to the fabric of our community without any expectation of return. 

Are we “taxpayers?” Yes. 

Are we “citizens?” Yes 

We are all “citizen-taxpayers” or “taxpayer-citizens,” whichever you prefer. And there are probably a host of people living in the City of Guelph who define themselves the same way. 

It’s time to stop reviling “taxpayers” and celebrating “citizens.” It’s time to recognize and honor “citizen-taxpayers.” 

Thank you, 

Cam Guthrie

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I suppose the best statement of the citizenship ideal that Mr. Guthrie is taking issue with comes from the inauguration of President John F. Kennedy.

The idea is that living in society comes with just as many---if not more---responsibilities than rights. This is also an idea that the holocaust survivor and psychiatrist Viktor Frankl raised in his book Man's Search for Meaning. The thesis of that work is the idea that people are only really happy when they are able to believe in some purpose greater than themselves. He found that the only people who had a chance to survive in the NAZI concentration camps were those that had such commitments, whereas those who just lived for themselves simply withered and died under the harsh conditions. Based on this idea, he suggested that the United States should put up a statue of "Responsibility" to balance out the statue of Liberty. (Indeed there have been serious efforts to fund raise for and build such a thing.)

Artist's rendering of proposed San Diego 

"Statue of Responsibility", image from San Diego City Beat.

Image used under the "Fair Use" copyright provision.

The idea of calling voters "tax payers" instead hearkens to the idea that people live their own personal lives and that great, civic projects are just "moonshine" that wastes their hard-earned cash. That reminds me of my interview with Liz Sandals. In it I was asked what she thought was motivating the  Doug Ford government and Conservatism in general. She answered that she thinks that it comes down to a very simple prescription "the two things that I think he does believe, really strongly believes in, are "taxes are bad" and "government is bad"".

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This hearkens back to one of the ideas that I harped on in the editorial about wicked problems. People come to them with different agendas, even if they say that they are all in favour of same goal. I tossed out the idea that we should think about the term "preventing climate change" as another way of saying "preventing the human race from committing suicide". By doing so, I'm "upping the ante" when it comes to discussing the issue. Lots of people don't really think of it in terms of an existential crisis, but rather as "something nice if it doesn't lead to tax increases". This difference in emphasis isn't just a minor disagreement, but rather a totally different worldview that fuels completely different agendas. 

Totally by coincidence (this blog is not meant to be topical), this issue has recently become a big deal because Councilor James Gordon and Leanne Piper are calling for Guelph to follow Kingston and Hamilton's lead in Guelph declaring a climate change "emergency". Mayor Guthrie seems to opposed to this idea and was quoted in The Mercury website as saying 

“Declaring an emergency is not something to take lightly, and there are implications to doing so,” and,
“I am a person of action, not platitudes of words, and my fear that these types of discussions
get us away from actions and it’s more about just optics.”
Guelph's Mayor, Cam Guthrie. Photo from official City Website

I'm not about to make any definitive statement about where Mr. Guthrie fits on the "taxes are bad" Conservative scale. He does seem to be genuinely concerned about people with drug addictions and the homeless---among other things. I can also remember that the first time I met him he was involved in some sort of environmental project (sorry Cam, it was long time ago and I simply cannot remember what it involved.) He certainly seems like a nice guy. But he has "hitched his wagon" to the "taxes are bad" crowd, and even with the best of intentions, he's going to have to at least pay lip service to their worldview. And no matter how much he might protest, it is clear to me (ever looked at Guelph Speaks?) that a large percentage of those people have zero interest in the JFK motto of "ask not what your country can do for you, but rather what you can do for your country."

Having said all of that, this knife cuts both ways. People can say that they are in favour of preventing climate change and really mean "if it doesn't mean that we raise taxes". But other politicians can say exactly the same thing and mean "Goddam it, we've got to stop the human race from committing suicide!!!!!" But the fact of the matter is that because of the real and perceived attitudes of voters, both types of politicians can easily find themselves "biting their tongues" and offering bland platitudes about "baby steps". I suspect that that's part of the reason why emotions have risen both when people tried to make a distinction between "citizens" and "tax payers", and, when Councilors asked if the city should declare a climate change an "emergency". In both cases people are being asked to be "punk and plain" about what they really think in a system that often punishes them badly for doing so.

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If we keep the above issue in mind, I think what happened to the District Energy hubs makes perfect sense. They were designed not to be immediately cost-effective projects, but rather something like the "nose of the camel in the tent". 

Public domain image from "Windtoons.com", 

For those who haven't heard it, there is a teaching story about a Bedouin who allowed a camel to shove his nose in his tent only find out that once the nose was in, the rest of the beast inevitably follows. In the same way, if Guelph got used to the idea that energy for heating and air conditioning was just another commodity for the city to pipe under the roads, it would inevitably become just an accepted part of infrastructure---like water and sewage. And this would be one of those things that a Conservative hates: an increase in government size and a reason for taxes to go up.

In contrast, for anyone who has the hidden agenda of not wanting the human race to commit suicide there is a lot in favour of a district energy system. That's because the key part isn't the efficiencies that come from having one centralized source of hot and chilled water, but rather the distribution system that connects a bunch of different buildings to one centralized source. Right now the two hubs run off natural gas, but the  real hope of the people behind the system was that this could eventually be replaced by more sustainable fuel sources such as waste heat from industrial processes, geothermal or thermal-solar.

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Once this last point is understood, then it becomes easier to understand how another aspect of wicked problems comes into play. The point wasn't to come up with a system of heating and cooling buildings that would immediately pay for itself, but rather to be the first part of a new system that was going to be the first part of a revolution in how Guelph uses energy. If you looked at the systems from that perspective there really wasn't much wrong with them.

I've been told that the city hired outside consultants to do an analysis of the district energy hubs and I've found a staff document that was presented to Council on July 18th, 2016. It was prepared because Council wanted to make public a document that related to various items that they'd seen before in in camera (private) meetings.

“That the presentation and report on the financial history of the GMHI
[Guelph Municipal Holdings Incorporated---the city-owned company set
up to manage things like the district energy plants. WDH]
group of companies be referred to the June 13, 2016 Council meeting” 

“That the closed minutes and accompanying material of November 23,
2015 with respect to District Energy Strategic Long Term Financial Plan,
with the necessary redactions, be made public in conjunction with the
materials for June 13, 2016 Council.” 

“That the closed minutes and accompanying material of February 29,
2016 with respect to Decision Chronology: District Energy, be made public
with the necessary redactions in conjunction with the material for June
13, 2016 Council.”

The consultant is not directly mentioned, but on page three document makes reference to "Deloitte", so I think I can safely assume that it leans on work prepared by "Deloitte Touche Tohmatsu Limited", which is a multinational technology consulting firm based in London, England.

Briefly stated, the staff report says that Deloitte's analysis suggested that the energy hubs are too small to make a big enough profit to pay off the money spent setting them up. Having said that, they are working relatively well and making enough money to pay for their on-going maintenance. In addition, the operating profit that they are making isn't enough to pay for any attempt to expand their client base. In addition, the city is "locked into" contracts with existing customers which means that there would be financial penalties for shutting down the plants. As a result, Council decided to stop looking for new customers, write off incurred capital costs as a "bad debt", and, keep the physical plants working.

What the bland "bureaucrat-speak" in this document seems to miss---according to conversations I've had with various people---is that the city never planned for these limited systems to pay for themselves in the short-term.  That's why the private sector is loathe to start these things up, even though they are willing to get involved once government has "proved the concept"---like with Enwave in downtown Toronto. They were supposed to be the first stage of a long-term city investment in a much larger system. It's the nature of district energy systems that you make a long-term commitment to build a "game changing" system for long-term development. To their point of view, the Mayor didn't direct staff to look at the system and they found out that it wasn't working. Instead, the Mayor directed staff and convinced Council to sabotage the system by starving it of secondary investment by not working to get new customers and invest in the system so it could adapt to their needs. District energy is always a question of big initial investment and long term pay off---which is why it generally won't work unless it is built the same way that governments build any other infrastructure system.

In effect, the nose of the camel got cut off before the rest of the beast could make it into the tent. "Stop climate change---if there are no new taxes" won out over "stop climate change before we commit suicide!!!!!" It's just another example of a group of people trying to get society to invest in a system that might have done something impressive to cut down on carbon emissions, and which got sabotaged and destroyed by people with a totally different agenda. Another bunch of victims got into political trouble because of a wicked problem.

Or did they?

That's the thing about wicked problems, I don't really have an opinion about this thing. It might very well be that our current mayor is right and these things would never have worked as intended. One thing I won't do, however, is fault the previous mayor and Council for trying to do something big to help the city do it's bit to stop climate change. When confronted by a wicked problem the last thing a society should do is just "kick the can down the road" and ignore it. They should be willing to take risks and make experiments to see what does and doesn't work. It might very well be that some future administration on Carden Street will do some more number crunching and restart the whole district energy initiative. It might also be that some private company will step in and buy them so they can do it. It might be that new technology will make the whole thing a total anachronism. But at the time reasonable people thought district energy was a good idea and they took a chance on it. It's the easiest thing in the world to kick wicked problems down the road, but if you do that long enough it turns out the "easiest path" leads to the worst results.

Where I might be tempted to point a finger---and remember I wrote "might be tempted", not "I blame them for"---is that there wasn't enough work done building a social consensus around exactly what the long-term plan for the district energy really was. If people thought that the district energy system was going to immediately make a profit and that that was going to be high enough to fund all future expansion, then it would have been a shock to find out that these were really demonstration projects for something that would require much more ambitious long-term investment. But again, it's very hard to sell the public on something like this when there are really powerful interests in society who are bound and determined to soft-peddle the sort of crisis our civilization is really facing. The tendency is always going to be for politicians of good will to try to "schmooze" the right thing into place because they believe that they will lose all power to do good if the body politic finds out what they really want to do. It's perfectly all right for me to thunder away about the importance of dealing with climate change, but I've never been able to get a job that didn't involve heavy, unskilled manual labour---let alone win elected office. You can't do anything at all if you don't get elected---and that has to involve sucking up to the often idiotic worldview of voting citizens. (Ever wonder why politicians are the way they are? Take a look at voters---.)

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I'll leave off with the most intelligent statement I've heard about climate change in a long time. They It comes from a remarkable 16 year old Swedish girl named Greta Thunberg who is now experiencing her "15 minutes of fame". This an edited address that she gave to the World Economic Forum at Davos in Switzerland.

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Furthermore, I say to you---climate change must be dealt with!

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.