Patrick Brown forces defunding of projects he’s trumpeted to avoid implementing vital hospital levy
To compare the City of Brampton’s budgeting to a house of cards is unfair to those who carefully build such paper towers.
The 2022 budget process inside City Hall has revealed a bureaucracy unable to keep track of its own projects, ensure key infrastructure is repaired and replaced, plan for new features expected in a big city or answer the most basic questions about the financial planning in Canada’s ninth largest municipality.
Staff, under the leadership of CAO David Barrick and newly appointed treasurer Nash Damer, are struggling to communicate financial plans to councillors during a rushed budget process.
Taxpayers have been left unprotected and uninformed, while the city’s largest and most influential business organization launched a fierce, blistering condemnation of the financial mess staff hired under the direct authority of Mayor Patrick Brown are creating. A mess that will have to be cleaned up when Brown, who has not made a secret of his ambitions to work as a Conservative leader in provincial or federal government, might be long gone.
Hanging over the inept budget document and the process to approve it is the campaign pledge from Brown, who handpicked Barrick, to deliver a zero percent budget increase, as part of his political calculation long before the pandemic that such a populist move would help resurrect his career after he was forced in 2018 to step down as Ontario PC leader following allegations of sexual misconduct which he denies.
Taking their orders from the mayor, senior staff under Barrick are not even pretending to present a financial plan that is responsible and protects the interests of Brampton residents. The budget process has been almost entirely political, serving Brown’s demands for whatever will make him most electable in the future. Staff have worked toward a set-in-stone goal to freeze the overall budget size, instead of carefully piecing together a responsible financial vision to ensure the types of investments Brampton needs to create a thriving city with all the features residents expect.
There is no long-term plan to support future hospital funding, the university Brown promised, the world-class cricket stadium he vowed to build during this term of council, needed funding to expand transit, to protect against the threat of flooding, to create an economic innovation corridor, to redevelop the crumbling downtown… the list of neglect goes on and on.
In its current form, the budget has dropped investment in a special infrastructure and transit levy by 75 percent over what was promised last year. Millions more debt will be added to the City’s balance sheet to avoid a tax increase (the cost of this debt financing will be felt deeply in the future) and some reserve funds are in a precarious state. A last-minute Monday motion from Brown, to change how City Hall’s West Tower is funded, has helped him get closer to another property tax freeze on Brampton’s share of the budget (assessment increases could still cause a rise for property owners, and the Region of Peel tax increase will also be reflected in some additional costs on the annual property bill for Brampton homeowners). Utilities are also going up sharply and user fees for certain costs will also go up. But Brown deflects from these realities of municipal inflation when talking up his campaign-style claims of a property tax freeze. Meanwhile, his own mayor’s salary last year was more than $50,000 higher than what Linda Jeffrey, the former mayor, was paid in 2016. Brown has never frozen his own salary while mayor, despite demanding a freeze to the overall City budget every year.
One factor that threatened Brown’s lobbying for another freeze was the need for the City of Brampton to find funds for healthcare expansion in the city.
The Peel Memorial Centre for Wellness is set to be expanded at a cost of between $500 million and $1 billion. The City of Brampton must help come up with $125 million to fund the local share of this cost.
This is not new. It's something that Brown himself signalled would be on the table almost two years ago. Despite this, he has consistently pushed budgets that leave no room to responsibly fund investment in hospital expansion that Brampton so desperately needs. His political impulses seem to direct every move he makes. With one hand he joins a council demand for a new 850-bed hospital, with the other he refuses to responsibly budget for City Hall’s required share of the needed investment.
In January 2020, Brown said he believed his City would have to pay a “gigantic” share of hospital expansion in the region of 25 percent. “The province has asked both Mayor (Bonnie) Crombie and myself to make contributions to hospital projects in the range of 25 percent. It’s a gigantic price tag,” he said.
The budget that followed his comments delivered a zero percent increase, and put no funds aside for Brampton’s healthcare expansion. Now, the bill is coming due, at about 15 percent of the overall capital cost required, and Brown is scrambling for a solution. A responsible approach would be in the form of a hospital levy, so those who would benefit from a new healthcare facility (the Province has not committed to an actual second hospital and is only planning 250 beds for Peel Memorial that will not be for acute care, on top of a handful of short-stay beds) would help pay a small share of it. A levy was used to pay for the local share of Brampton Civic Hospital.
But Brown refuses to put the healthcare needs of Brampton residents ahead of his political ambition.
Staff hired under Brown’s watch have suggested a short-sighted shell game to fund some of Brampton’s healthcare expansion costs.
Working under Barrick, staff have reported they will be returning tens of millions of dollars for projects elected officials have already approved for other projects, which taxpayers have already paid for. A successful motion from Councillor Rowena Santos, who has politically aligned with Brown on key votes throughout the term, will pillage those returned funds intended for other approved projects, to pay for the hospital.
It’s akin to a household paying for a car, returning the car and then using the money saved to pay for braces the children badly needed all along.
Councillors Doug Whillans, Jeff Bowman, Martin Medeiros and Pat Fortini voted against the Santos motion.
Her suggestion, under Brown’s refusal to pay responsibly for needed features, is built on a shell game that instead of raising revenues for critical infrastructure, just moves money around from one priority to another.
Despite being spun as found money (obtained through the staff mismanagement of approved projects expected by taxpayers who already paid for them) the vast majority of money being earmarked for the hospital is being moved around or temporarily removed from projects the funds are supposed to be assigned to.
The financial shell game, being presented by Barrick and his team as good news, is a clear sign of incompetence at the heart of the City’s financial mismanagement under a CAO who Brown brought in despite having no experience at all in municipal government, no financial experience and no education in any area that municipal leaders are typically required to have. Under Barrick and Brown projects have been delayed, badly budgeted or cancelled, often without the usual direction from council.
“We question how council is expected to fully understand all of this and make informed decisions when the numbers are changing, sometimes by tens of millions of dollars,” accountant Glenn Williams, presenting for the Brampton Board of Trade, said to council members during budget deliberations. He referenced the return of capital funding as a key sign of the rot within City Hall.
Brampton needs funding for its share of healthcare expansion.
(Image from The Pointer files)
Barrick has spun the numbers as a win.
“There is an option … that does allow council, today if you like, to contribute up to half the requested local share,” for Peel Memorial’s phase-2 development, he said on November 3, referencing the returned capital dollars that were supposed to fund projects previously approved by council.
That option is made up of $22 million collected through a previous hospital levy and around $40 million that will effectively be redirected from other projects. It’s unclear why the $40 million is suddenly available, what will happen to each of the projects the money is supposed to be for and why exactly each of them can afford to have money removed from the intended expenditure.
“I find it hard that any treasurer in a municipality would recommend, or would support, this financial option,” Councillor Medeiros said on December 6.
“Or is this just political?”
Senior finance staff admitted in November and again on December 6 that they were not offering councillors a free alternative to pay the City’s share of the Peel Memorial expansion. Funds that are still needed for other projects already approved by council are being rearranged.
“You are correct, us utilizing reserve for funding does put the pressure on our infrastructure overall,” Nash Damer, the City’s treasurer, responded to Medeiros.
“We have gone through a comprehensive exercise of all projects and identified about $50 million that we can return,” Mark Medeiros, acting treasurer until a few weeks ago, told councillors in November under a similar line of questioning. “We will say a large portion of that is the CFI (Centre For Innovation) building where we've found funding that was not immediately needed will not be needed for quite a while. So we are returning some of that so that we can maximize the utility of the funding we have. So that is a large portion of the funding that is being returned.”
Funding for the CFI building is the clearest example of the shell game that is being played.
The project, for which the City has already taken out $99 million of debt, was originally set to be funded through the Canada Community Building Fund overseen by the federal government (previously called the gas tax) but, due to a change in criteria, these funds will now be spent on a fire campus instead. Rather than swapping the two projects around (so the CFI remains funded now through taxes and the fire campus receives the Canada Community Building Funds) staff are giving councillors the money to spend on something else, while it remains unclear how the approved CFI building, which Brown has trumpeted as an economic game changer for the city, will be built.
Repayments on the $99 million of debt taken out for the CFI will begin at $2.8 million in 2023 and $5.6 million in 2024, and Brown could be long gone when these pressures on the budget begin.
The third quarter capital report, which landed in front of councillors the same morning that Brampton budget deliberations began, shows $69 million in funds is being returned. Roughly 44 percent of that figure is CFI funds that will still be needed, most likely before Brampton has to contribute its share to healthcare expansion. William Osler Health Systems previously told the City it would need funds by 2027, while the CFI is scheduled for construction around 2024.
However, municipalities are expected to have the local share for healthcare expansion ready before construction begins, so the City is running out of time to start collecting for a need Brown knew about at least two years ago, but chose to ignore, in favour of his politically popular budget freezes.
Brampton’s capital funds shell game.
(Image from Isaac Callan/The Pointer)
A further $11.4 million is being returned for site servicing costs in the area around the CAA Centre because the “project is not proceeding”. The funds were set aside to deliver the infrastructure necessary to support the expansion of new facilities, including the potential for Brown’s cricket stadium. “As it is currently unclear what facilities and their associated tenure will be implemented on the CAA lands, it is appropriate to return the previously budgeted funds,” a spokesperson told The Pointer.
Rather than keeping the funds for next year when council settles on what facilities to provide, the project will now effectively be unfunded.
The $35 million for construction of Brown’s promised cricket stadium is nowhere to be found in the 2022 budget. Again, he could be long gone by the time Brampton residents realize he made public statements about bringing the stadium to the city immediately, as recently as this fall, had staff bring forward a report earlier in the fall detailing the $35 million, so Brown could make claims about bringing the stadium to the city, but failed to put even one cent of that $35 million in the 2022 budget.
Around $6 million for land acquisition associated with road expansion is now up for grabs, after decisions to freeze the widenings of various roads, including Williams Parkway, despite money that was already approved, taken from taxpayers and used for the early stage of the project. It’s unclear if that money was essentially wasted.
Another $4.1 million that will be needed for a fire station in Heritage Heights around 2032 has been returned, effectively leaving this key piece of public safety infrastructure without the dollars it needs to proceed.
“These capital funds are being returned so they can be directed to meet more immediate capital funding needs of the City given that City staff were not able to identify an optimal parcel of land available for purchase on the open market over the past three years,” the City spokesperson said.
The majority of funds set aside in 2019 to bring improvements to City Hall are being returned, along with tens of millions to compensate developers for over-dedication of parkland.
“The City originally planned to reconfigure the space on the third floor of City Hall with staff moves and system furniture changes,” the spokesperson said. “Given the impact of COVID-19, updated space planning and modernized workplace guidelines, the planning approach to this project has changed. The project requires re-evaluation and re-validation based on remote work options available, updated space planning and modernized workplace guidelines.”
A $3 million item approved in the 2021 budget to design a new animal shelter in Brampton is being returned in its entirety. This is because the “site location and program plan” have changed. What has not changed is the need for a new animal shelter, one of Brampton’s most poorly rated assets.
Under questioning from Fortini and Medeiros on December 6, finance staff were unable to provide a coherent explanation for the vast return of previously approved funding for needed infrastructure and assets. They repeated lines from reports councillors have already seen.
“Even though currently it hasn’t been assigned projects in our capital, it is meant to support infrastructure projects into the future … so it will be depleting those funds that in the future could have been used for other infrastructure projects,” Damer said.
The report included a more honest number: $11.6 million was returned to the City’s coffers as of September 30, 2021, from projects that have been closed. Although this indicates an inability to accurately budget inside City Hall, it is money council can actually reprioritize, since the projects the returned money was assigned to no longer need more funding.
The chaos behind Brampton’s attempt to run major projects and create a cohesive budget plan comes as no surprise.
In December 2020, Barrick himself admitted there was a problem. Speaking after auditors KPMG presented a review of capital projects he said there was “very clear room for improvement” for “how we’re managing these projects”.
“If we don’t have a true handle on our capital and it’s handled in silos across the corporation, the accountability becomes more difficult and you’ve seen the results of that already in terms of open projects from 10, 12 years ago,” he said.
Despite his apparent concern, Barrick has effectively worked against advice from KPMG and further undermined the City’s ability to deliver key projects, as the mismanagement under his leadership has overshadowed projects from the past.
“Some of the positions are vacant and some job descriptions can be refined to be consistent across all the divisions and [should] include all of the necessary qualifications,” Sol Guimaraes, a consultant with KPMG, told council in December 2020.
An inexperienced team is handling Brampton’s public money.
(Image from Isaac Callan/The Pointer)
Just months earlier, Barrick had hired two men without relevant engineering experience to lead key infrastructure files. The move was documented in the 2021 Deloitte investigation into allegations of corruption and delinquent hiring practices under Barrick.
In July of 2020 Barrick, according to Deloitte, selected two new “Directors for departments responsible for managing critical city infrastructure.” The job postings stated that university engineering degrees were a requirement for the jobs, as well as professional accreditations that allowed them to perform or approve highly technical work.
Barrick’s hiring of these types of completely unqualified senior staff who work on major projects, is what leads to the very problems KPMG warned of. The CAO ignored the advice and is now scrambling to explain why even basic project management has fallen apart under his watch.
“There is no consistency in how the divisions manage their projects,” Guimaraes, of KPMG, said.
Now, Brampton’s inexperienced and controversial CAO, flanked by a department of unqualified political hires, is selling mismanagement as a political win. Santos’ motion means council has effectively approved of the situation and will now shift the mismanaged funds to avoid a healthcare levy so Brown can campaign on his so-called budget freezes.
He already announced Wednesday morning that the freeze will be achieved, even before the vote scheduled for later in the evening.
“We’ve essentially put our future into a real tough bind and no one can tell me different,” Councillor Medeiros said, echoing the feelings of more and more Brampton residents who wonder why they don’t have a second hospital, a university, expanding transit service and all the other features thriving cities invest in.
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