Cost Sharing Update

My cousin Shayna on Canada’s Olympic team in 2004.

Movement towards a review of the cost sharing agreement has been slow.

In the past week, the treasurer confirmed that all residents of Mississippi Mills pay towards the subsidy. Some members of council believed that residents north of Wolfgrove and March Roads, including Pakenham, did not pay towards the agreement, except for the pool. The confusion arose because, in the cost sharing/Howard Allan formula, properties south of Wolfgrove and March Roads are the only ones counted towards a second property tax assessment used for the Carleton Place library and recreation (arenas, sports fields etc), which is then discounted based on the distance from Carleton Place. The entire municipality’s assessments are included for the pool subsidy. But everyone pays an equal share of the result.

At the October 20, 2020 Council meeting, two delegations spoke about the agreement:

Cathy Peacock, Chair of the Mississippi Mills Public Library Board, spoke about the Ontario Public Libraries Act and efforts to clarify the authorities for agreements other than union library and genuine reciprocal sharing agreements, which would cost residents nothing. She also noted that the accredited Mississippi Mills Library branches provide service to all residents within about 10 minutes of their home; the Province requires that service be available within 45 minutes.

Amanda Etherington, coach of the Carleton Place Water Dragons spoke about the swim team and the difficulties and expense they endure. Their worry was that if the cost-sharing agreement was terminated for the pool that their expenses would be through the roof and the club could not continue. It seemed that the team does not receive any additional benefit for residents in spite of the subsidy. I reported that a pool was a high priority wish of Mississippi Mills residents in the 2013 Recreation review (the “Stantec Report”); it is the one item we do not have so it makes sense to support it and I believe that Almonte and Ramsay each contributed substantially to its building in 1982. A review should examine if groups like the Water Dragons, mostly Mississippi Mills residents, are getting a fair shake from our subsidy.

Before my motions came up, Councillor Ferguson had a motion asking that Council “direct a Mississippi Mills staff and select members of Council to initiate dialogue with our Municipal partners (Carleton Place, Beckwith) with input from the Recreation Cost Sharing Committee, in order to conduct a review of the Cost Sharing Agreement along with any negotiated amendments.” Councillor Ferguson noted, as did Mayor Lowry previously, that there had been correspondence from Mayor Black of Carleton Place and verbal discussions with Reeve Kidd of Beckwith.

Councillor Holmes added an amendment to have an in-camera meeting on November 3 to discuss the matter. There are legal issues to consider and Councillor Ferguson mentioned negotiations.

When my motions came up, I spoke about the main problems with the agreement as I see them (see Remarks, here). Some of the results are astounding. It made sense to defer them until these discussions were concluded.

You can read agendas and meetings or view the meetings here:

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.

Motion regarding the Carleton Place Recreation and Culture Cost Sharing Agreement

Please share and provide me with your comments on this motion. Over the next few days, I will also post what I found on the costs and history of this agreement over the last 12 years. The agreement was started in 1987 to benefit Ramsay residents nearer to Carleton Place and continued past amalgamation in 1998. Most residents don’t know about this and when they do, they are concerned about funding a third arena and a third library. Stay tuned.

My motion:

WHEREAS Mississippi Mills maintains two libraries and two arenas as well as other cultural and recreational facilities, and

WHEREAS Mississippi Mills has contributed to the Carleton Place Culture and Recreation Cost Sharing Agreement since amalgamation for their library, pool and arena, with increases of 8%, 8.2%, 9.4% and 12% in the last four years, for an increase of approximately $50,000 from 2016 and totalling more than $1M in the last 8 years; and

WHEREAS the Province of Ontario has clarified that establishment of a library services agreement by a municipality for library services with another municipality when it has established its own Library Board is inconsistent with the Public Library Act; and

WHEREAS on February 18, 2020 the Mississippi Mills Public Library Board communicated its wish to terminate the Library “cost sharing” service agreement in preference to fiscally effective reciprocal sharing agreements with its neighbours; and

WHEREAS the premise for cost-sharing agreements are generally to support services in one municipality which another municipality does not have but uses exclusively, and

WHEREAS the cost-sharing agreement abrogates Council’s authority, control and management of its expenditures to third parties,

THEREFORE BE IT RESOLVED that Mississippi Mills Council terminate the cost-sharing or “Howard Allan” Agreement effective immediately.”

– Verbal notice provided by Jan Maydan at the Committee of the Whole on Tuesday, August 11, 2020