Council Meeting Reflections – February 16, 2016
17 Wednesday Feb 2016
Written by parry034 in Parry Sound, Reflections
Like a good movie, last night’s meeting of Council saved the surprise until the very end. The surprise was a $180,000 levy shortfall for 2016 as a result of provincial legislation eliminating certain semi-public properties from property assessment. The change impacted the assessment for the Lakeland Long Term Care facility in Parry Sound. As a result, Council has decided to return to the budget process, with a meeting scheduled for March 2nd at 6:00 PM. Everything is back on the table for discussion. Those of you who have been following the budget process will remember that Council agonized about a $100,000 addition to the budget that led to a 3.16% levy increase. The $180,000 will have a proportionately larger impact. I applaud Council for deciding to take a step back and look at the big budget picture rather than fudge things by making adjustments to the reserves.
This is the second time in recent history that Council has been hit with a loss in tax revenue as a result of assessment adjustments. The Town has now lost more than $500,000 in annual revenue with the latest assessment change and the earlier reduction of the assessment for the Big Box stores (Home Depot, Wal-Mart and Canadian Tire).
There are two themes here. The first is the Provincial and Federal decision to download more and more expenses to the municipalities. The decision regarding facilities like Lakeland Long Term Care will reduce the Province’s cost to support these facilities by shifting the burden to local communities. This then allows the Province to limit provincial tax increases, and look financially responsible, at the expense of the municipalities. The second theme concerns the load Parry Sound carries for the area municipalities. With very limited space, many of Parry Sound’s prime business and residential locations are dedicated to federal, provincial, and community services that pay reduced or no municipal taxes. Yet these facilities still need their streets cleaned and repaired, street lights operated, OPP services, and so on. The argument is that these facilities bring jobs that benefit the community by increasing local property revenue. But how many of the people who have these jobs actually live in the surrounding communities? It is in fact many more than our neighbouring municipalities would like to admit.
Perhaps our very ‘rich’ neighbours can pitch in and build an area recreation facility, aka ‘a pool’. It looks as though Parry Sound won’t be in any position to consider participating for some time to come. With little space to grow, Parry Sound will need to live with it’s current reality. Raising taxes really doesn’t make sense, the Parry Sound levy is already three times that of Seguin. That means a $200,000 home in Parry Sound might pay about $2,000 in annual property taxes while the same $200,000 property in Seguin would pay about $700. But with Parry Sound ‘just around the corner’ residents of Seguin, Carling and McDougall pretty much enjoy all the benefits of living in Parry Sound, but for much less. At least the OPP costing discrepancy is bit-by-bit being adjusted.
There was a larger crowd at last night’s meeting. The audience was there to confirm that Council was moving forward with the next step to eliminate fluoride from the Town’s water supply. “Ding Dong the Witch is Dead”? Well perhaps dead but not yet buried to the satisfaction of some. That burial is scheduled for next month. Will we see a raising of the dead in a couple of years? Hmm, Zombies are pretty popular nowadays. Revenge of the Fluoride Zombies? Stay tuned.
The Views are Free, Day and Night (Parry Sound in B&W)
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February 17, 2016 at 12:56 pm
Jo
Just to be absolutely clear on this one, there is no financial windfall for either Lakeland or the WPSHC in this action. The money stays at Queens Park at least briefly.
February 17, 2016 at 1:03 pm
Agreed. This is a Provincial initiative to indirectly reduce their burden. The Province gives with one hand and takes with the other. The only ‘loser’ in this case is the Town, but that is consistent with most recent Federal and Provincial policies. They don’t want to be seen as the ‘bad folks’ raising taxes or cutting services..
February 19, 2016 at 8:13 am
Re: parry sound’s growth.
Maybe the key is not higher taxes, but lower?
When we bought our first house a few years ago, we initially planned to stay in parry sound. We looked at several in town houses, and narrowed down two that we liked. We had no idea of the tax difference in parry sound. We’d always had lots of friends who lived outside if town – we’d always assumed they just liked the country! Then we started looking at numbers for the houses we were interested in buying, and the tax bill in both cases put an otherwise affordable house completely beyond our budget. We had two choices: give up, or buy outside of town. We discovered then why so many friends lived outside of town.
It’s a vicious circle for parry sound. They don’t have enough money, so they raise taxes. Taxes are too high so people have to move away. People move away and thereby pay no taxes at all. Less people paying taxes means the town doesn’t have enough money again, and on it goes.
Parry sound is offering a product for sale, i.e. residency, and like all products for sale, finding the right price range is key. Set too low a price and you don’t cover your costs. Set too high a price and you drive away customers. You need that perfect balance.
Your complaints, Jo, about the municipalities show that parry sound has already driven away too many customers, which means its price is already too high.
February 19, 2016 at 9:49 am
Parry Sound is in a challenging situation. It basically provides the community and social services for West Parry Sound District. This includes low income housing, publicly supported retirement residences, churches, government agencies, recreational and community facilities, among other services. These are all resources that pay little or nothing in terms of property taxes that are required to service their presence, fire, police, roads, by-law, …. And people, now think we should be providing a recreation centre that includes a swimming pool.
And with little land, lots of rock and two rail lines running through Parry Sound there is little opportunity to grow the community. And many of these agencies and community organizations are sitting on prime real estate, downtown and on the waterfront, that could be generating tax revenue that would permit the Town to reduce the tax levy for everyone. But they are there and as a larger community we are better off for their presence.
A couple of years ago there was an opportunity to expand Parry Sound to the south by annexing a very small portion of Seguin Township that could be enhanced with Parry Sound services. Seguin was cheeky enough to suggest that they were okay with idea but it would need to be agreed to by the local residents, who they knew would say no, even with significant concessions from Parry Sound.
Don’t tell us that we are too expensive. That’s like saying a Buick is too expensive because it costs more than a Kia. Not only are these vehicles targeted to different markets, they have completely different costs structures. Make no mistake about it, the municipalities surrounding Parry Sound are operated for the pleasure of the seasonal residents who want low taxes and don’t need any infrastructure beyond road access. Oh, and high speed internet, that they think Canada and Ontario should provide. If they were to look at their assessment base they could easily cover the costs of installing a high speed internet service. But you know, even the low taxes rates of Seguin and the Archipelago add up when you own a $1 or $2 million dollar second or retirement residence.
Ryan, I challenge you to go through the Parry Sound budget with a red pencil and let me know where the cuts should come. Be careful, we don’t want to disadvantage the poor, the elderly, or the young, who have limited resources and no real voice. And we also need to be sure not to cut services that will negatively impact the residents of the surrounding municipalities. They depend on Parry Sound to deliver the services that their municipality doesn’t.
The budget is available online.
February 24, 2016 at 9:17 am
Jo, I think you misunderstood my suggestion: I wasn’t saying they should necessarily cut expenses (if I did go through the budget line by line as you suggest, I may or may not find some cuts I think should be made, who knows?) but rather that they should cut taxes.
More on that in a moment, but first, you took a poke at the municipalities – this time complaining how parry sound carries the area services such as courts and hospital. I think that’s a biased appraisal.
First off, PS takes just as much as it gives. Arguably more, actually. Sure, the cushy regional services like the nice hospital are located right in town, but tell me: where’s the big regional dump? Parry sound conveniently locates that in one of the municipalities. What’s that, you want a parry sound industrial park but don’t want to deal with industry too close to town? Ok, let’s locate that in a municipality too! And how about an airport? PS prides itself in having an airport, but who wants noisy planes near town? Out to the municipality with that sort of thing! So don’t kid yourself that the town bears the full load.
Furthermore, PS benefits in a number of ways from the municipalities in regard to regional services. Take that hospital you mentioned. A town the size of PS would have to have a healthcare centre no matter what. The only question is what would the size and therefore quality be? If PS was a typical northern town – the same size but isolated and on its own – then it would only merit and afford a much smaller hospital with much fewer services. Thanks to the surrounding municipalities, however, PS rates a much larger and better equipped hospital than it otherwise would. Next time you have to have some specialised procedure and find you can get it done right here in town and do not have to travel to Toronto, you can likely thank the municipalities. (though I suspect you wont).
Back to the PS tax situation. You complain about PS not being able to get more space, but I say they’re not even using the space they have! How much of the downtown is empty? How many vacant buildings are there? How many empty houses for sale? You mean to tell me you really think all of that unused space is because short-sighted buyers are buying proverbial kias instead of buicks? I’d say all those (missing) buyers are just acting like normal buyers: they stop buying when the seller starts over charging.
Years ago I used to love eating harvey’s cheeseburgers. Compared to a mcdonalds burger, they were bigger, beefier, and we’re grilled not fried. I could grab one for $2.99. Since then the price has steadily gone up every year. Last time I bought one – just the burger, not the combo – the total was over $6. Even if you account for inflation, that’s a significant price increase. The burger itself hasn’t changed: they’re not offering to give me anymore for my money, they’re just trying to take more of my money. As a seller, harvey’s is free to set whatever prices they want, but if they set it too high, typical buyers will stop buying. And that’s what I did: I haven’t bought a harvey’s burger for years. If they lowered the price, i’d be back, but till then, no. They got too greedy, they tried to take too much, so they lost me as a customer.
I think the same effect can, in part, explain the vacant town. There’s other contributing factors, sure, but in part the town simply raised the price too high, so the customers started leaving. Almost every non-election year they raise the taxes a little bit. Bit by bit, year after year, the charge more for the same cheeseburger. And now they complain that they haven’t sold enough cheeseburgers so their total revenue is short!
They could try to cut expenses, sure. They could try to raise the price even more and attempt to maximise the profit on the few burgers they are selling. But i’m saying a better plan is to cut that price! Lower the price and the customers will return. Then they’ll sell a huge mess of burgers and end up with the revenue they need.
February 24, 2016 at 5:21 pm
Ryan, there are only three ways I know to reduce taxes, that is capture significant revenue from a non-taxation related source, cut expenses, or take on debt. In the case of Parry Sound I believe taking on additional debt may not be allowed according to provincial legislation, it certainly would not be a good business practice. Capturing additional sources of significant revenue is hard to imagine, although I have an idea on this that I’ll develop over the next month, outside of buying Powerball lottery tickets. So cutting expenses really is the only way to cut taxes. That means cutting services. Having watched Council and Staff for a few years now I’m pretty sure they would like to cut taxes, but the prospect of cutting services would not be acceptable to the electorate.
Regarding the location of services, such as the Hospital. I can assure you that no one in Parry Sound would be inconvenienced if the hospital were built on the other side the Parry Sound/Seguin municipal line. I am sure the Town would have willingly built water and sewage connections to service the facility. That would have then freed up several hectares of prime Bowes Street property for residences or businesses that could generate on the order of $200,000 or more of annual property tax revenue, cutting taxes by about 2% for everyone.
The churches and social service agencies in Parry Sound in many cases occupy prime real estate but don’t pay property taxes. I estimate their combined assessment value to be about $20 million, which could provide an additional $200-300,000 in revenue depending on whether it was converted to residential or commercial use. Once again, having these institutions just across the municipal line would not be an inconvenience. I am not suggesting that they should pay property taxes, but they do service a much larger group of individuals and worshippers than those who live in Parry Sound.
And what about the land taken up by the schools and the seniors residences? They take up much of the prime real estate in Parry Sound. Belvedere Hill could perhaps attract some very high end condos, and significant tax revenues were it not used for non-profit residences. At least two school properties, both right beside the railway lines are likely to hit the market, which is pretty exciting from a future revenue perspective. But, I don’t think they will attract that much interest from residential developers unless they are appealing to people who like trains running by day and night, with a crossing next door.
Regarding property values in Parry Sound, I agree that things are overpriced. But they apparently still sell. The Harvey’s burger is selling despite it’s high price, so it’s a case of supply and demand. Cheaper housing in the surrounding municipalities but no high speed internet, a need for a water pump and septic system, clearing a laneway, and a drive to any real services does not seem to be too attractive to some, certainly the older population. (FYI – the best burger deal in Town is at Dairy Queen; cheeseburger, fries, drink and a small sundae for $6, and the burger is really quite good.)
If you have worked running a business you will have realized that simply cutting prices doesn’t necessarily lead to more customers, better profits and a more sustainable business.
You are familiar with the Tragedy of the commons. To some extent that applies to Parry Sound. The Town provides a resource that is used by many, but supported by only a few. That’s not an uncommon situation.
A last thought about garbage. We contract to have our garbage handled by a private firm. I don’t believe we run a separate dump in one of the local municipalities. I suspect that one or more of the local municipalities may well contract with these companies to accept garbage, as a revenue source for the municipality. But I really don’t have much information on this. Parry Sound does operate a transfer station that accepts recycling and garbage (at a tag cost) that is then picked up by paid contractors.
There are no easy answers. I urge you to attend Parry Sound council meetings, especially the budget sessions, and see what it’s like running a service business that masquerades as a town.
February 24, 2016 at 6:10 pm
Jo, you’re still over-playing your hand a bit regarding the municipalities and shared services. Besides the hospital, which we could keep arguing about, the only valid claim I think you’ve made is for the regional social service agencies.
But you also tried to put in a claim for retirement homes, government agencies, churches, fire, police, roads and recreation centres.
Retirement homes would be required whether th municipalities existed or not, so either way they would still be there taking up their tax-free-loading footprint. If the municipalities do anything, it’s provide more customers for those facilities and thereby – be increasing the scale – allow them to be better than they otherwise would be. Thus, like the hospital, hosting the retirement home for the region results in a net benefit for PS.
Similar could be said for the government agencies, except that without the added regional population to justify it, PS may very well not even qualify for a government office. Thus, next time you have to renew your license and don’t have to drive to Barrie to do it, you can again probably thank the municipalities.
As for churches, they exist in the municipalities too. We actually have our own. There probably is some degree of back-and-forth, but by and large i’d say most church goers in the municipalities go to churches in the municipality.
Similar could be said for fir services. We may not have highspeed internet, but we do have our own fire dept. PS does not carry that load for us.
The same for recreational centres. We have our own arena, our own ball diamond, or own soccer field, etc.
The OPP do service both areas, but we get separate bills for that – an issue you’ve well written about.
The bottom line is that you are consistently over-estimating the burden that PS carries for the municipalities, while under-estimating the net benefit PS receives from the municipalities. For whatever reason you’ve chosen to see the municipalities as free-loading mooches undermining the prosperity of PS, and that lens is distorting your view.
February 24, 2016 at 6:12 pm
And by the way, I actually do have high speed cable internet…
February 24, 2016 at 8:07 pm
Dang, this is fun. It feels like I’m back in graduate school.
Let’s talk about the services and the relative amount of assessed property they account for:
Parry Sound – 13.4 sq. km.
Seguin – 595 sq. km.
Carling – 248 sq. km.
McDougall – 268 sq. km.
There are 100 hectares per square km. So if social services, community retirement residences, schools and churches occupy about 50 hectares in total, all of it in serviced prime commercial and residential areas, they account for about 4% of the total available land. Factor out the property that can’t be developed, including wetlands, rail constricted areas, federal and provincial facilities, the percentage rises to about 6-10%.
Now that same 50 hectares would account for:
Seguin – 0.01%
Carling – 0.02%
McDougall – 0.02%
of their available land. That’s a remarkably large difference. And these facilities, District (retirement residences), provincial (offices from OPP to MNR to social services), federal (Coast Guard), deadbeats (Imperial and Shell Oil) take up much of the most valuable property in the Town.
Overplaying my hand? Nah! It’s always hard for others to accept arguments when it isn’t in one’s own interests. It has been said that everybody is in favour of the rule of law, except when it goes against their personal interests.
I don’t resent paying my taxes, but I do resent the out-of-towners scolding us about our taxes being too high and our property too expensive. And these are the same people who think Parry Sound should build a community centre with pool to service the people with their waterfront properties who don’t want to drive to Bracebridge.
Bonus question. Parry Sound is a waterfront community. How many residences are there with water frontage? Why is that?