Cost Sharing Response to Mayor

On her Facebook page, Mayor Lowry raised some issues with my motion on the Recreation and Culture Cost Sharing with Carleton Place.

Mayor Lowry used the amounts only up to 2019 to show that we have given Carleton Place just under a million dollars: $925,069.00. I used more recent numbers up to the amount already approved for 2020 ($149,832), totalling $1,074,901.00 (the amount the Treasurer estimated for 2021 is $154,330 by the way).

Our numbers are both from the same source: the Mississippi Mills Treasurer. This table below is what the Treasurer sent to the Library Board earlier this year, as the Board prepared its budget proposal for 2021. I used these numbers for my chart assuming them to be correct, but with an estimate for 2021. The amounts that I used that are prior to 2016 came from previous budget documents.

2021 Proposed Cost Sharing Budget

The increase of “approximately $50,000″

The increase of “approximately $50,000″ that I referenced is the difference between Carleton Place’s 2021 request for $154,330 and the 2016 amount of $104,650.50. The difference is exactly $49,679.50. I rounded. If you use different parameters, you will get different numbers.

Basis for Cost Assessment

Right now, whatever Mississippi Mills pays is calculated using the higher property values (residential and commercial) in the areas around Carleton Place. The 2016 dwelling value average for that part of Mississippi Mills was $399,150, while the average value across Mississippi Mills was $380,403. The results are therefore skewed in favour of Carleton Place. With average 2015 household incomes of $121,608 and $128,968 in the two dissemination areas border Carleton Place, compared to $97,795 in Mississippi Mills generally, one could argue that these residents can afford a levy or increased user fees instead of passing the costs for this agreement to all of Mississippi Mills.

The Mayor noted some subdivisions around Carleton Place. She omitted those that “abut” Almonte’s “boundary seamlessly” such as Greystone Estates and Munro Meadows. Many Almonte residents do go to Carleton Place for all kinds of things, particularly grocery shopping, where there is more competition. But we do have a library and an arena. The most additional distance any “South Ramsay” resident would have to travel to Almonte’s library in preference to Carleton Place’s would be about 11 km, and most of the north half of South Ramsay residents are actually closer to Almonte.

Fear Factor

Mayor Lowry’s post insinuates legal action by Carleton Place (“Beyond being unneighbourly, Council may find there are legal ramifications to permanent decisions made without consulting the other two municipal parties”) and suggests there may be a withdrawal of the automatic aid fire services from Mississippi Mills, in vindictive retaliation I suppose. Not a worthy argument and not a comparable agreement.

I don’t believe that a court would rule that a municipal council has no authority or control over its own expenditures and that another municipality can stipulate via a formula unrelated to usage what it pays for residents to access facilities, forever. There is no exit clause, but there is no binding stipulation.

Contrary to her assertion, Council did have at least one opportunity to hear Howard Allan explain the cost sharing agreement: at our briefing and training in early 2019. Some of us also attended the first cost sharing meeting of this term, where Mr Allan went into more detail about the calculations. The previous Council also voiced its concerns to the parties in 2016.

Benefits and Costs

The benefit that Mayor Lowry ascribes to the 1419 residents of the two dissemination areas would amount to $106 per resident (using the 2019 amount of $149,832 divided by 1419) or about $272-$287 per household. Remember that while this is a special amount paid only because of these residents, it comes out of Mississippi Mills revenues. No other part of the municipality benefits in this way. Note that the Howard Allan agreement also includes the assessment of commercial properties.

The property assessments for residents of Greystone Estates are included in the calculation see the map below to give an idea of how far it extends: right up to Almonte (reference: Howard Allan Agreement Addendum of November 2000, page 12).

Almonte has sewer and water services that are not subsidized by ratepayers outside Almonte, and only service users pay for it. If the same approach was taken, Ramsay residents could continue to subsidize Carleton Place by using the Howard Allan method to pay for their preference of facilities via a levy without burdening the rest of the municipality. I would caution them to read the Howard Allan agreement first. Note that if you live just outside Almonte and are closer to Almonte recreation, we are assessed at 50%-60% on your behalf, the same as if you lived just outside Carleton Place. Commercial and farm properties add to the amount.

All of Mississippi Mills is assessed for a share of the pool, because:

“In terms of swimming pool services we have estimated the contribution rate to be 25% of the Town of Mississippi Mill’s (sic) weighted assessment. The reason for this is that swimming pool services should be available to all Mississippi Mills residents and therefore we feel that the scope of the participating assessment should not be limited to Ramsay Ward, as in the other two service areas.”

- Howard Allan Agreement Review November 2000, page 13

As noted, some people, including myself, have used the pool in Carleton Place. Other residents use pools in Arnprior, Ottawa and Perth. Only the Carleton Place pool is subsidized. Almonte and Ramsay also paid into its construction.

What would happen if we terminate?

It is important to remember that the resident location/property assessment issue is used only to determine what Mississippi Mills pays, not who pays. Then this cost is added to the budget and tax bill for all residents.

If Mississippi Mills terminates its agreement to pay, then all Mississippi Mills ratepayers, including the affected Ramsay residents, would see the money they have paid either eliminated or redirected towards Mississippi reserves or other items. Council needs to discuss this.

Carleton Place will then need to charge non-resident user fees and maybe higher fees to cover their costs. They will need to manage their own facilities at 100% if Beckwith also withdraws. Carleton Place residents may face a tax increase to cover their own facilities. If Mississippi residents prefer to continue the agreement, then an additional levy should be charged to ratepayers in the Howard Allan affected areas. The property values and household incomes in that area suggest that those residents “adjacent” to Carleton Place may be better able to afford such a levy.

It may be that Carleton Place might ban any users from their facilities, like Smiths Falls did recently to residents of Merrickville-Wolford who refused to pay Smiths Falls a share under a Howard Allan agreement. This is like “cutting off your nose to spite your face” in that the facility owner loses these revenues and it is nearly impossible to determine in the case of leagues or organizations.

The motion to terminate the Agreement cannot be unexpected to Carleton Place. The previous council gave notice in 2016 that it was unhappy with the agreement. Measures were taken then to try to bring the library “cost-sharing” into compliance with the law. Neither the former Library Board or the former council can irrevocably bind the present board and council. The agreement itself calls for review and admits its problems with subjectivity and lack of precedent. I am sure that Carleton Place council and residents would be sorry to see an end to the subsidy of their facilities. They would then be in our situation.

Mayor Lowry suggested that the first step should be to talk to Cost Sharing Committee. The mayor and CAO did that in 2016 and their request was defeated by that committee.

The way to bring up the issue is to make a motion and debate the merits. This keeps expenditure authority in our hands and does not delegate it to third parties to make our decisions. The service delivery review also raised a number of serious issues related to cost sharing and I will comment on those in another post. However, the mayor claimed that “Cost Sharing Agreement represents 4.1% of this total.” Actually, as verified by the Treasurer’s budget “pie” and the latest service delivery review, cost sharing is 4% of the Recreation budget and 8% of the Library budget:

2020 Recreation Budget Pie Cost sharing 4%- source : Treasurer
2020 Library Budget Pie cost sharing 8%- source: Treasurer

I encourage you to read the Howard Allan report and review for yourself, and look at the history. The rising property assessments on which this agreement is based escalate our costs in times like this, on depreciating facilities that have not even been open lately.

The bottom line in my opinion is that it does not make sense for residents to pay for the costs of a third library and a third arena when we have two of each of these facilities in the Municipality, and multiple choices for swimming beyond our borders. The costs of recreational choices should be borne by the chooser.

Come to the Public 2019 Budget Meeting

Residents of Mississippi Mills are invited to share their comments on the proposed 2019 budget on

Thursday, April 4, 2019 at 6 pm

in the Council Chambers at 3131 Old Perth Road.

The link to all the details in the last draft budget presented to Council by staff on March 12 is here:

https://icreate4.esolutionsgroup.ca/230002_iCreate_NewsModule//Management/Attachment/Download/e4ce3e3d-660c-4458-9390-0836ee578d70

The Municipal invitation and link to the agenda and a slide show on the budget is here:

https://www.mississippimills.ca/en/news/index.aspx?page=4&newsId=e568b168-a4b1-4fbd-8f3f-d5e82d88370b

Taxes and Finances

Without a history of regular financial reports to Council from the municipal administration and departments, it is hard to say how taxes will go.  The debt is currently about $4 million more than the $18 million that the ex-mayor claimed it would be at the end of 2018.

Council said that the reserves would be built up so much by 2018 that we could borrow from ourselves. The mayor wrote “…if Public Works needs $300,000 for a new piece of heavy equipment, the money comes from reserves.” However, at their last regular meeting, the 2014-2018 Council voted to borrow nearly another million dollars to buy a grader, a fire truck and other equipment. When asked by a councillor if reserves could fund it instead, the staff response was “no.” Reserves have  dropped below what they were supposed to have been at this point.

Where did things go wrong? Well, mismanaged projects and programs  headed and directed by council have cost far more than expected; in the worst case, the Pakenham library renovation project alone was approximately 100% over its budget (final figures have not been reported at this writing). On some projects, milestone and cost updates were so late that potential corrections could not help. A few projects came in so much under budget that the costing process seemed odd.

Most big-ticket projects were managed by small groups of councillors who made the spending decisions; the ill-fated library renovation and Gemmill Park projects are examples. Meanwhile, little investment of time in real public consultation was made in the Official Plan review and ill-fated park sales proposals. How much time and money were spent on ideas like paving the recreational trail for the imaginary hundreds who “commute” (when no funds were allocated – or likely – for upkeep)? Development charges earmarked for Almonte growth were spent elsewhere. The downtown infrastructure replacement project seemed to have been dropped except for end-phase benches. The result of the lack of public consultation and poor decision-making is that the Municipality has  incurred far too much in legal costs. Is there a contingent liability fund to pay for these mistakes? Or did it  cost us some basic services?

The Long Term Financial Plan apparently did not account for things like the ever-rising costs of energy, interest rates, salaries, benefits and shaky management. Residential property taxes and sky-high development charges can no longer remain the only sources of revenue.

I would like to see taxes as low as possible. With so little fiscal information in the face of some obvious misadventures, it will be a challenge. I think that a fiscally prudent back-to-basics approach will be required.