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Auditor praises finances, but highlights concerns

Jason Burgess, managing director of MNP LLP, praised the city’s financial policies and strategies during a presentation to the city’s finance committee. However, the auditor noted the city should take steps to address significant increases in sick leave and overtime hours, particularly within Oshawa Fire Services.

By Dave Flaherty/The Oshawa Express

The City of Oshawa has received a relatively clean financial bill of health, but some challenges are on the ledger.

At the latest finance committee services meeting, councillors heard the results of a provincially-funded third party audit of the city’s financial health.

Earlier this year the Ford government pledged funding to municipalities for these audits.

The City of Oshawa applied and received $90,000.

According to the province, the purpose was to find savings of four cents on every dollar spent by municipalities.

The review was performed by MNP LLP, and reported on by the company’s managing director Jason Burgess.

Burgess told the committee they weren’t able to find overall savings of four per cent “by any stretch of the imagination,” but added that isn’t necessarily a negative thing.

“You run a tight ship,” Burgess told councillors.

He praised city staff for their willingness to co-operate with his review.

“Staff do walk the talk. I do a lot of assignments where we go in and look for efficiencies, and staff say they are open, and when you start [to ask] questions, they start saying ‘we are special, we are different,’ – that didn’t happen here,” Burgess said.

He praised the city for looking at its own finances through a yearly audit by KPMG, and LEAN training for staff.

Burgess also commended the city for having “very strong financial strategies and policies.”

Notably, he said the city has been able to maintain its total expenditures over the past few years, essentially keeping it at the rate of inflation, while population and household growth has been considerably higher.

“If you compare that with a lot of your peers in the area, they aren’t doing that. So the proof is in the pudding with your expenditure control,” he said.

But there were some areas Burgess believes the city should focus on.

According to MNP’s findings, the amount of overtime worked by city employees spiked by 47 per cent between 2016 and 2019.

However, the number of employees only grew by two per cent in the same period.

MNP’s report states this is a “disproportionate” growth based on employee hours.

In 2016, the city paid out $1.532 million for 28,339 hours overtime, with it estimated to increase to $2.251 million for 40,830 hours in 2019.

The amount of sick leave also jumped 56 per cent in the past three years.

While the increase this year is only four per cent, it was 36 per cent between 2017 and 2018.

In 2016, Oshawa employees used 4,313 sick days for a total of 32,345 hours. However, in 2019, it is expected those numbers will increase to 6,737 sick days and 50,530 hours.

The report noted the majority of sick leave and overtime comes from Oshawa Fire Services.

Despite efforts made by management to curb the increase, it still represents a significant cost to the city.

Burgess was quick to point out this is not an issue Oshawa is alone in facing.

Ward 2 city and regional councillor Tito-Dante Marimpietri questioned if it’s an issue of adding more staff, or if there is a certain “culture” in the city leading to increased sick days and overtime.

Burgess said his company is not an expert in the field of human resources.

While he concedes human resources management is aware of the issue, it may be time to get “stronger resources and tools” to address it.

Ward 5 city and regional councillor Brian Nicholson said firefighters are taking sick leave because they are overworked. He said the overtime costs are consistently highlighted, but he feels adding more staff could potentially solve the problem.

Burgess said there are also some concerns regarding the city’s fleet of crossing guards.

Most employees hired to be crossing guards are either younger or retirees, and it is a difficult pool to hire for because it is seasonal in nature.

When crossing guards call in sick, Burgess said the city often has shift workers from the traffic operations department to cover.

“Those are very expensive crossing guards,” he said.

MNP suggests Oshawa could potentially contract some of the crossing guard work to a provider.

However, the associated risks to this would be ensuring the service is provided at an appropriate level, as well as contractual issues.

Another area for potential savings highlighted by Burgess was the city’s snow clearing assistance program for seniors.

Oshawa doesn’t currently charge for this service.

He said demand will continue to grow as the city ages.

“You’ll have the potential for more and more people eligible for this program, which means an increased cost,” Burgess explains.

MNP recommended three options – winding the program down, charging a user fee, or setting up income level requirements for the service.

By doing this, Burgess says the city could save up to $230,000.

However, Marimpietri said the city has actually focused on enhancing the program, and he doesn’t want to see it stop.

Another recommendation in the audit is for the city to investigate more collaboration with neighbouring municipalities.

Some areas identified where partnerships could take place include waste management, fire services and bylaw enforcement.

Ward 1 city councillor Rosemary McConkey wondered if the city should undertake a full core services review.

While he didn’t specifically recommend it, Burgess said it never hurts to review what the appropriate levels of services are, and what the financial implications are for the city.