Leadership style

I have often seen business magazines showcase a “superstar CEO” – that special breed of CEO who drops into a corporation, turns it upside down, and delivers impressive short term gains for the shareholder. What is less often reported is when others follow up a few years later, more often than not, they find these short-term gains have not been sustained. 

The reason given by management and leadership gurus is that this leadership style – often referred to as “toxic” to an organization – destroys staff morale which has devastating consequences for productivity, customer service, the retention and recruitment of talent and ultimately the bottom line.

The same is true in local government.  Yes, you can go in and turn everything upside down and help sell some newspapers.  Add in the inevitable mistakes that get made and the same consequences documented in the private sector and you end up no further ahead in delivering lasting results. 

The table below shows the positive result of thoughtfully working with our professional staff to deliver value for money at City Hall. (You can click on the chart to enlarge it.)

Increases to the tax rate continue to decline each year while at the same time Council’s use of the Rate Stabilization Reserve to reduce the tax rate on budget night has also declined. By working thoughtfully and carefully, we are achieving results that will last.

Much has been said about the Rate Stabilization Reserve this year (see previous post). 

The Rate Stabilization Reserve was established in 2002 “to assist in ensuring the tax rates can be kept relatively stable and not subject to large increases due to changing services, legislative impacts, extraordinary expenditures, or revenue losses (like the revenue loss we experienced in 2010 due to the economic recession).   The idea is that during good economic times, year-end surpluses are transferred to the reserve so that during bad economic times (like 2010) you can turn to these reserves to reduce the impact on taxpayers. 

The 2004-2006 term of Council began using the reserve to lower the tax rate despite good economic times.  So much so, in 2006 Council withdrew more funds from the reserve than had accumulated.  What this meant was that they were counting on a windfall or a surplus at the end of the year to balance the books.  This is a high risk practice as the recession all too effectively showed us. The hidden story here is the diligent efforts of our staff to contain costs during the year to mitigate the risk of this past practice. 

The 2007-2010 term of Council began to wean the budget off its dependency on a year-end surplus to begin to build up the reserve but the recession hit before this was fully accomplished.  To give one example of the consequences of this past practice:  a 5 day work reduction.

About Karen Farbridge

An unwavering change maker seeking a just, democratic and sustainable world.

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11 Comments on “Leadership style”

  1. Jim Grant Says:

    The other point here would be that it has been stated a number of times of simply sell your house and downsize if you can’t afford the taxes. What is said in this statement is that to all of you that have been living in your home for the last twenty years or so, that because you can’t afford the taxes now our government is taking your home away from you. Twenty years ago doesn’t matter today. Costs go up, true. But on the path we are going now means that if you can’t afford the tax 1) it’s your fault and sell and 2) we don’t want you anymore because you can’t afford our lifestyle.

  2. Bill Hulet Says:

    So Jim, you’re just going to totally ignore the substantive content of Karen’s post and make a fuss about what someone else has written somewhere else?

    Is that really fair?

  3. Laura Murr Says:

    Hi is part of this operating surplus from the yearly hydro dividends? If not what has the the hydro money received each year been spent on? Correct me if i am wrong but It is my undertstanding that the money coming from hydro has been $1.5 million each year since Guelph hydro was allowed became for profit in 2000. I know that last year it was not 1.5 million.

  4. ksulliva Says:

    Hi Laura,

    Here is information from Finance staff:

    The Hydro dividend of $1.5M per year has generally been directed to the infrastructure renewal reserve fund. In 2009 Hydro was able to provide a dividend of $2.25M – the additional $750 went to general revenues.

    Kate Sullivan
    Mayor’s Office

  5. Laura Murr Says:

    Thank you you for your response. The $750,000 that went into the “general revenues” – was this used to offset property taxes increases?

    If there were no hydro dividends where would the city find the money to put into the infrastructure renewal reserve fund?

    What about the other hydro dividends from 2005 to 2009? Correct me if I am wrong but I believe that over $8 million dollars was paid out to the city from 2005-2010 from hydro diviends- is this correct? What was it used for?

    Was there any profit from hydro revenues from 2000 to 2005? If so what was this money used for?

  6. ksulliva Says:

    Hi Laura,
    I will follow up with staff to get answers to these further questions.

    Thanks,
    Kate Sullivan
    Mayor’s Office

  7. Jim Grant Says:

    Karen – After watching the 2 clips listed below, which have been posted on a blog (59 Carden St) by a private citizen, I would like to know if you intend to revisit your comments and/or Councillor Laidlaw, regarding her making derogatory comments while at the horseshoe and seemingly lack of interest in listening to certain tax payers.

  8. ksulliva Says:

    Hi Laura,
    Here are answers from Finance staff:

    – Yes, the $750,000 was used to offset property tax increases (2009 budget – Dividend for 2008)
    – Yes, the City would need to find another source of financing for the capital works that are funded from the infrastructure renewal reserve fund such as Property tax revenues, government grant or the capital works would be delayed until funding was available.

    Dividends have been received/used as follows:

    2001/2002 Dividend – $3.35 M used to fund the New City Hall construction
    2003/2004 Dividend – $2.8 M used to fund Capital Reserve Fund
    2005 Dividend – $1.5 M used for general revenues
    2006 Dividend – $1.5 M used to fund Infrastructure Renewal Reserve Fund
    2007 Dividend – $1.5 M used to fund Infrastructure Renewal Reserve Fund
    2008 Dividend – $2.25 M (see above)
    2009 Dividend – $1.5 M used to fund Infrastructure Renewal Reserve Fund (2010 Budget)

    Kate Sullivan
    Mayor’s Office

  9. kfarbridge Says:

    Dear Jim,

    I have made my position on both matters clear.

    I do not recall whether you and I have corresponded directly about these two matters although I do understand my correspondence to others has been posted elsewhere and the media has interviewed me about both matters.

    However, I’d like to clarify some governance matters that continue to be misreported.

    First, there has never been a complaint filed under Council’s Code of Conduct. As Mayor, I have reminded members of Council on different occasions of their obligations in the Code of Conduct and Procedural By-law as well as the Corporation’s values.

    With respect to Councillor Bell’s comments in the media, it was the authority invested in the Chair through Council’s Procedural By-law that I requested Councillor Bell to not make similar comments during the meeting. If a member of Council feels that the Mayor is not applying the Procedural By-law appropriately, they can petition the whole of Council to rule on the matter. Indeed, in this matter, an employee has avenues available to them to pursue this matter through internal policies.

    With respect to Councillor Laidlaw’s comments regarding her use of on-line maps to weigh the input of members of the public, I expressed my personal opinion, when asked by the media, as to whether I believed her comments were in violation of the Code of Conduct. I acknowledged her comments were offensive to some members of the community. I have also expressed my personal dislike of generalizations.

    It should be noted that any other member of Council has the ability to file a complaint under the Code of Conduct and request an investigation if they believe her comments were in violation of the Code of Conduct. The authority to file a complaint under the Code of Conduct does not rest with the Mayor alone nor should it.

    Should a complaint be filed under the Code of Conduct, the Mayor does not conduct the investigation. The investigation is delegated to the CAO and he has authority to hire external resources to conduct the investigation. Moreover, Council approved funding for an Integrity Commissioner in the 2011 budget. A report with respect to the Integrity Commissioner is on the April agenda of the Governance Committee.

    Finally, with respect to comments she made during the meeting that were visible on camera, Councillor Laidlaw has accepted responsibility and apologized for her behavior.

    Karen Farbridge
    Mayor

  10. Jim Grant Says:

    Karen – Thanks. Got your e-mail.

  11. Scott Nightingale Says:

    Hey, Kate super impressed. You are going above and beyond. Timely responses to personal query, well done. If only there were a cost free team of you, every constituent could just ramble off any question they had in their head. But I’m sure you have plenty of things to do. Just wanted to say thanks and appreciate your work.

    And Karen, solid! does it get annoying to respond 50 times to the same “seemingly” menial tiff? Oh I hope I don’t get into trouble for that. the two of you have emboldened my heart and steeled my mind

    sincerely
    Scott Nightingale

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