Tag Archives: TOPS Financial Analysis

No, Parry Sound is Not Bankrupt

28 Tuesday Aug 2018

Posted by in Budget/Financial, Parry Sound, Seguin Township

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A couple of weeks ago friends of ours in Seguin Township told us that a Seguin candidate had dropped by their home and in the course of the discussion said, or implied, that Parry Sound taxes were as high as they were was because the Town of Parry Sound was bankrupt. These are knowledgeable folks who were surprised by the statement and mentioned it to us for confirmation, or not.

I ended up speaking with the Seguin candidate about what our friends had heard. The candidate said that was not what they had said. I simply advised the candidate that this was the message that was received, probably because of what was, or how it was, communicated. The candidate did say, perhaps in their own defense, that a recent KPMG report stated Parry Sound carried a higher debt load than the neighbouring municipalities. To that I would reply – guilty as reported, but that is far from being bankrupt, or drowning in debt. It’s like criticizing a neighbour for having a larger mortgage for their more expensive property than you have for yours. If the debt is less than the value, and the mortgage payments are manageable, there is no problem. You may not prefer that level of debt, but then you are you, not them.

What also isn’t regularly mentioned is reserves and assets. The Town of Parry Sound maintains reserves that are higher than average in terms of both dollars and percentage of tax revenues.

A saying we have in our house is that you don’t need to put other people down to make yourself look better. The Town of Parry Sound and Sequin Township have quite different business models that are built to meet the needs of their residents. Comparing the two isn’t fair, and Parry Sound’s debt is actually a benefit for Seguin residents by providing the infrastructure that can support big box stores, an area hospital, and even places of worship and social services that would be less tenable if they had to depend on well and septic systems. As a Parry Sound champion, I understand the benefits that we bring to our municipal neighbours. I am not so sure what benefits our municipal neighbours provide for Parry Sound residents. I know I can’t park my car in many municipalities to go kayaking without worrying about a ticket. Some may argue that our municipal neighbours spend their dollars and support Parry Sound businesses. If you look closely you will find that many, if not most, of these Parry Sound businesses are owned by folks who live not in Parry Sound, but in the surrounding municipalities.

In the end it all works pretty well. There is no need to throw stones at each other’s business model.

For those of you wanting to better understand the Town of Parry Sound financial situation, hopefully Parry Sound Council candidates who have never attended a budget meeting, here are a couple of documents that should be helpful.

2018 Town of Parry Sound Budget Presentation (2018-12-12)

2017 Town of Parry Sound financial Statements (Draft)

(Note: original post edited to clear up the ‘they’ references.)

 

Council Agenda Preview – September 5, 2017

05 Tuesday Sep 2017

Posted by in Budget/Financial, Parry Sound, Town Council

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This evening’s agenda is pretty light in terms of issues but there are a couple of proposed expenditures that are worth looking at a little closer. Item 9.1.2 concerns a new Public Water Tap that is budgeted at $50,000. I see no issue with this new amenity that is largely targeted to non-Parry Sound residents, residents can just get water at home, but I do have an issue with the proposed funding. The suggestion is that the cost be taken out of the Tax Rate Stabilization Reserve. This Tax Rate Stabilization Reserve is becoming a bit of a slush fund for municipal expenses. I don’t see why this expense can’t wait for the 2018 Budget process and be included, or not, in next year’s budget. The Tax Rate Stabilization Reserve is intended to manage the ups and downs of reviewed and approved budget expenses. Let’s not start dipping into this reserve to deal with issues unrelated to rate stabilization. Honey, the new Play Station just came out, the kids will love it. Can I use some of their university funds to pay for it? Reply: can’t it wait until Christmas when we will have saved up for this type of expense and decide if it’s what the kids really want?

The second budget related item is 9.2.3, Stockey Centre repairs in the amount of $850,000. Staff is requesting that the budget for the project be increased from the approved $700,000 and be paid for with a larger debenture. I guess it costs what it costs, but had Council known it would be this much would there have been some additional cuts when discussing the 2017 budget? And a comment on the proposal to save $10K by only putting Ice and Water Shield on the valleys and troughs. Suck it up and pay to have the whole roof done. That 35-year manufacturer’s shingle warranty isn’t worth squat; we will be lucky to get 15 years. If you won’t spring for a metal roof, at least make the best out of shingles with a full coverage of Ice and Water Shield.

Lastly, the Town is looking at selling property proximate to Canadore College. You can see the 1.5 acre lot in the image below. The sale is probably a good idea to stimulate a bit more development at the north end of Town. I hope that the proceeds of the sale will not simply be put into a slush fund. It’s too easy to cover a spending ‘problem’ by dipping into slush fund reserves and taking out debentures. It’s the same as a consumer taking on credit card debt and a home equity loan to handle what should have been saved for. It just delays the expenses and increases the cost. But it’s ‘less painful’ for some, including politicians, than exercising some self control and saying “No!”.

Closed Session Agenda Topics

  1. a) the security of property of the municipality or local board. (Potential Development Project), (Audit Questions of Council), (CP Station)
  2. b) personal matters about an identifiable individual, including municipal or local board employees (Local Board)

(c) a proposed or pending acquisition or disposition of land by the municipality or local board; (Request for Proposal)

Correspondence

4.1 – Letter from Wendall Fisher, Resident. Town’s initiative to have a report prepared regarding the cessation of train whistling at the five crossing. Mr. Fisher is not in support of this.

4.2 – Letter from Thomas Buttineau, McDougall resident. Concerns with used needles surfacing at the local beaches and playgrounds and requesting support from Parry Sound to open a Treatment Centre.

Deputations

5.1 – Giselle Bodkin, CPA, CA, BDO Canada LLP, Parry Sound’s Auditor. Re: Year End Report for The Corporation of the Town of Parry Sound

Consent Agenda

8.3 – Special Meeting of Council – Staff Succession Planning. Resolution. That ______________________ at 6:00 pm be scheduled as a Special Closed Council meeting for the purpose of staff succession planning; and That Resolution 2017-139 be rescinded.

Resolutions and Direction to Staff

9.1.2 – Public Water Tap. Resolution. That Council approve the installation of a public water dispensing system adjacent to the existing commercial bulk water station located on Parry Sound Drive, and further; That Council authorize the transfer of up to $50,000 from the Tax Rate Stabilization Reserve to finance the project.

9.2.1 – Report to commence closure of portion of Parry Sound Drive road allowance. Direction. That staff commence the procedures to stop up and close, appropriately rezone and dispose of a portion of the Parry Sound Drive road allowance.

9.2.3 – Tender – Stockey Centre Phase II Roof Repairs and Siding Replacement. Resolution. That Council accepts the tender from W.S. Morgan Construction Ltd. in the amount of $888,180.00 including HST for roof repairs and siding replacement at the Charles W. Stockey Centre for the Performing Arts and Bobby Orr Hall of Fame, this being the only tender received; and That the budgeted debenture be increased to reflect the tendered amount.

9.5.1 – Approval of Consolidated Financial Statements for the year-ended December 31. Resolution. That Council for the Town of Parry Sound does hereby approve the Draft Audited Consolidated Financial Statements for the year ended December 31, 2016 as attached in Schedule “A”.

9.5.2 – Financial Variance Report for Q2 (June 30, 2017). Resolution. That Council hereby receives and accepts the Financial Report for Q2 2017 (June 30, 2017) attached as Schedule “A”; and Further that Council hereby approves the expenses for members of Council for the period January 1, 2017 to June 30, 2017, attached as Schedule “B”.

By-laws

10.2.1 – Site Plan Amendment – M2 Developments Inc. – 12 College Drive. By-law 2017 – 6765. Being a By-law to authorize a Site Plan / Development Amending Agreement between the Town of Parry Sound and 12 College Drive (M2 Developments Inc.)

10.5.1 – Execution of Agreement with Collection Agency. By-law 2017 – 6766. Being a By-law to authorize the execution of a Customer Retention and Collection Services Agreement between A-1 Credit Recovery & Collection Services Inc. (“A-1CRCS”) and the Corporation of the Town of Parry Sound.

I won’t be at tonight’s council meeting. I figure my time is better spent digging a little deeper into the council package.

Council Agenda Preview – August 8, 2017

07 Monday Aug 2017

Posted by in Parry Sound, Town Council

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This week’s meeting of Parry Sound Council is packed with a number of items. It’s a bit of a mix of operational and organizational issues. I have provided comment (italics) for several of the agenda items.

  1. b) personal matters about an identifiable individual, including municipal or local board employees (Human Resources)
  2. c) a proposed or pending acquisition of land for municipal or local board purposes. (potential land acquisition) (Waterfront development)
    Waterfront development continues to be on Council’s closed session agenda without any information being shared with the public.
  3. d) labour relations or employee negotiations (personnel matter)

Correspondence

4.2 – Ministry of Finance. Transitional mitigation payment to eligible municipalities re: tax exemption for Long Term Care Homes

Deputations

5.1 – Chris McDonald & Erin Cardy. Splash Pad for Parry Sound

5.2 – Thomas Buttineau. Needles & Addictions, A Cry for Help

Resolutions and Direction to Staff

 9.1.1 – Tender – Bowes Street Retaining Wall. Resolution. That upon the recommendation of Triton Engineering Services Limited, Council accepts the tender from Weeks Construction Inc. in the amount of $218,067.40, including HST, for the construction of the northwest retaining wall on Bowes Street and Louisa Street, this tender being the lowest tender of three tenders received; and further, That Council increase the allotment in the Capital Replacement Reserve Fund to cover the shortfall of $58,067.40.

9.1.2 – Pre-budget approval – Vacuum Truck. Resolution. That Council authorize pre-budget approval in the amount of $350,000 to purchase a new vacuum truck and further; That Council approve single sourcing the equipment through an authorized Vactor dealer.
This apparently is in the budget as part of the long term equipment replacement program.

9.2.1 – Cultural Spaces Canada Grant Application – Stockey Centre Audio and Projection Systems. Resolution. That Council approves the request for funding from the Department of Canadian Heritage, Cultural Spaces Canada, in the amount of $23,349 representing 50% of the total costs of audio and projection upgrades at the Charles W. Stockey Centre for the Performing Arts.

9.3.1 – Henvey Inlet EMS Service. Direction (For Direct Staff Follow-up): That upon the recommendation of the EMS Advisory Committee staff prepare documentation to justify the application to the Ministry of Health for 100% funding of a base located in Henvey Inlet FN and that staff enter negotiations with MOH to implement and manage the Henvey Inlet base.

9.4.2 – Succession Planning. Resolution. That September 26, 2017 at 6:00 pm be scheduled as a Special Closed Council meeting for the purpose of succession planning.
I believe that the Town will be looking to fill the CAO position in the next couple of years. I hope that the new CAO, whether promoted from within or hired from the outside, will be a resident of Parry Sound, not living in one of the lower tax surrounding communities. I have no issue with Staff living outside of Parry Sound but I believe the CAO, who directs the activities of Staff, needs to experience life in Parry Sound, as a resident. It’s pretty easy to overlook, or not understand, any number of quality of life issues of local residents and businesses if you don’t live here. Yes, people might let you know about what is right and wrong about being a resident of Parry Sound, but there needs to be first hand experience. Just my two cents. It may be a little like the experience of our neighbours to the south who have a president who doesn’t really ‘get’ the issues because he prefers to retreat to his out of Washington residences, rather than sit in the White House and get first hand experience.

9.5.1 – 2016 Reserve and Reserve Fund Report. Resolution. That Council receives the 2016 Reserve and Reserve Fund Report, attached as Schedule A, in compliance with the Town’s Reserve and Reserve Fund Policy.

9.5.2 – Reserve Transfers – Downtown Business Association. Resolution. That Council hereby approves a transfer of up to $8,000, conditional on a minimum $2,000 contribution from the Downtown Business Association, from the Tax Rate Stabilization Reserve for the purpose of funding the costs of a strategic plan for the Downtown Business Association.
It’s my sense that Council and Staff aren’t happy with the performance of the Downtown Business Association. The Town wants something to happen but they don’t really want to invest their own time and effort. They had an active Downtown a couple of years ago, but some members of Council resented their activism. Oh dear, how to find the right balance?

9.5.3 – Reserve Transfers – Website. Resolution. That Council hereby approves a transfer of $4,800 from the Tax Rate Stabilization Reserve for the purpose of funding the implementation costs of the Form Builder module from e-Solutions.
This seems like a good investment.

9.5.4 – POA Write-offs. Resolution. That Council for the Town of Parry Sound, hereby approves the write-offs for the Provincial Offences Act Court outlined in Schedule “A” attached.
Another round of ten-plus year old write offs; the total amount is $5,300.

9.5.5 – 2018 Budget Schedule. Resolution. That Council hereby approves the 2018 budget preparation schedule as set out per “Schedule A” attached.
Ladies and gentlemen, open your spreadsheets. It would be nice if the schedule included a note of what steps were open to the Public and when Staff and Council would prefer to receive public comment. How about a date of when the first draft of the budget will be available to the Public and a deadline for Public input and comment? With council meetings being streamed online it is likely more people will participate in the process, possibly too late to provide meaningful input.

9.5.6 – Creation of Hotel Tax. Direction. That the Director of Finance be directed to create an ad-hoc committee including industry members, to further research, develop and design a hotel tax system for the Town of Parry Sound.
This fits in with 9.6.1, and is necessary if the Town is to provide residents, visitors and businesses with the level of amenities and services they expect. Improving the business climate in Parry Sound generates little incremental revenue, at best it stabilizes the tax base.

9.6.1 – Local Share – 1% Sales Tax Increase. Resolution. Whereas municipal operating costs Provincially are growing at $1 billion annually, just to maintain current services, and Whereas the total annual municipal budget gap as calculated by AMO is estimated to be $4.9 billion annually for the next 10 years to maintain current services levels and finance infrastructure needs, and Whereas property tax and user fees would have to increase at about 8% per year to close that gap, and Whereas municipalities own approximately two-thirds of all public infrastructure, all of which needs to be maintained, and Whereas AMO has reviewed dozens of options to help finance municipal governments, and Whereas the Town’s 2016 Asset Management Plan estimated a backlog of approximately $36 million and an annual infrastructure funding gap for tax-supported assets of $4,626,000. Whereas Council has agreed and implemented a 1.8% annual capital levy in addition to acceptable cost of living increases, Now therefore be it resolved that Council of the Town of Parry Sound supports AMO’s ‘Local Share’ initiative that would see a new proposed 1% (HST) sales tax increase, to support local infrastructure investment.
Yup, the money has to come from somewhere. If you don’t like the 1% sales tax feel free to offer the Town alternatives. This tax would in some small part capture a contribution from our neighbours and visitors who appreciate and make use of Parry Sound’s services and infrastructure. I’m okay with a splash park, but who should be responsible for the costs?

By-laws

10.1.1 – Funding Agreement – Waubeek Street. Being a by-law to authorize the execution of a Clean Water and Wastewater Fund Transfer Payment Agreement between Her Majesty the Queen in Right of Ontario as represented by the Minister of Infrastructure and The Corporation of the Town of Parry Sound.
This represents a $1.1 million provincial grant for the Waubeek Street reconstruction. The total project is estimated to cost $5.4 million.

10.2.1 – Site Plan Approval Application – The Parry Sound Affordable Housing. Development Corporation – 82 Gibson Street. Being a By-law to grant Site Plan Approval and authorize the execution and registration of a development agreement with 82 Gibson Street (The Parry Sound Affordable Housing Development Corporation).
I guess this will be approved as the developer has already started building the foundation.

10.2.2 – Site Plan Approval Application – 1793951 Ontario Inc. / Greystone Project. Being a By-law to grant Site Plan Approval and authorize the execution and registration of a development agreement with Granite Harbour/1793951 Ontario Inc./Greystone Project Management Inc. – 11c Salt Dock Road.
This represents the third phase of the project. After much concern about the lack of activity following the first phase of Granite Harbour, the development is moving forward nicely.

10.5.1 – Accounts Receivable Policy. Being a By-law to Establish an Accounts Receivable Collections Policy.

10.5.2 – Tax Collections Policy. Being a By-law to Establish a Tax Collections Policy.

10.5.3 – Asset Management Policy and Asset Management Strategy. Being a By-law to Establish an Asset Management Policy and Resolution, That Council hereby adopts the Asset Management Strategy, attached as Schedule A.

I’ll be there. If you can’t make it check out the live stream.

Life on the Big Sound (August 2017)

 

 

 

 

 

 

Parry Sound 2016 Annual Report

30 Thursday Mar 2017

Posted by in Budget/Financial, Parry Sound, Reflections

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The Parry Sound 2016 Annual Report came out yesterday, or at least it was in my mail yesterday. It’s an interesting read and does a good job of summarizing what was accomplished and where the money was spent.

It’s nice to think that as a town we really don’t need any improvements or investments, and that taxes should be frozen, or even reduced. Like any living organism, or organization, growth and renewal require ongoing investment. While you may be perfectly happy with that new kitchen you installed in the 70s, residents and businesses do expect services and facilities to be maintained and refurbished as necessary.

The reality is that as a community we provide, and pay for, services and infrastructure that are a necessity for our low tax neighbours. Our neighbours seem to have problems rationalizing an investment in the high speed internet they insist is critical for their future. But when your neighbour provides most essential services why not look to the Province and Canada to provide for things that Parry Sound doesn’t?

I realize that people are frustrated by the municipal tax load carried by Town of Parry Sound residents and businesses. After attending some five years of council meetings and budget discussions I am unable to accuse Council and Staff of making unwise investments. There are any number of expenditures that I disagree with, but these are nickel and dime items in terms of the whole budget. Even if you consider all of the nickel and dime issues they don’t add up to a loonie. My sense is that if you want Parry Sound services and low taxes, move to McDougall or Seguin. Consider Carling and McKellar if you don’t mind the longer drive to Parry Sound. You will be coming here for one thing or another, pretty much every day.

Council Agenda Preview – February 7, 2017

04 Saturday Feb 2017

Posted by in Parry Sound, Town Council

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Good news for those of you wanting to keep on top of what’s on the Town of Parry Sound council’s upcoming agenda; the agendas seem to be coming out on Thursday, rather than Friday. This provides people with an additional day to provide comments to Staff and Council on items on the agenda, or organize a deputation on an agenda item. But you need to be on the distribution list to get it delivered to your mailbox. Contact the Clerk at the Parry Sound Town Office to be included.

It seems to be business as usual with a hodge-podge of items on this week’s agenda. Among the more interesting items:

  • There seem to be multiple parties interested in the Old Fire Hall (5.2).
  • Activity seems to be developing activity with regard to having railways pay municipal taxes commensurate with their business activities and local community impact (8.4).
  • Treetops is back on the agenda (6.1).
  • Big Sound Marina operating agreement is up for renewal (10.1.1).
  • 2017 Budget and associated rates and policies (10.4.1, 10.4.2, 10.4.3).

As always there is more on the agenda than is noted above and below. Comments on individual items are offered below (italics). Review the full agenda with the supporting documents for more information. You can try and find it one the Town’s website or you could get it directly through this link.

Closed Session:

  1. c) a proposed or pending acquisition or disposition of land for municipal or local board purposes. (Property Matter)
  1. e) litigation or potential litigation, including matters before administrative tribunals, affecting the municipality or local board. (Zoning By-law Amendment Appeal)

Correspondence

4.1 – Kevin Baker, Harold’s Barber Shop. Re: Concerns about the rates for his installed water meter.
Commercial water rates continue to be a source of confusion. It’s basically a cost of doing business, or living, in Parry Sound; an underappreciated tax of sorts. The alternative is to set up shop in Nobel or McKellar and see how that impacts the bottom line. Taxes there are lower and you get to provide your own water and sewer.

4.2 – Stephen P. Kaegi, CAO, The Township of The Archipelago. Re: Letter addressed to Transport Canada, Marine Office and copied to Mayor and Council. Questions about the proposed operational restrictions of the Wasauksing Swing Bridge.
A pressing issue that doesn’t directly impact Parry Sound, the proposed restrictions on the operation of the bridge will impact Wasauksing and our neighbouring municipalities. Who is responsible, and who is going to pay for a new bridge, the obvious solution to the issue? Perhaps our rich neighbours can find room in their budget for the improvement, but that would of course negatively impact their low, low tax strategy.

4.3 – John Maheu, M.A.Sc., P.Eng., Executive Director of the Association of Ontario Road Supervisors. Re: Congratulations to Peter Brown, Director of Public Works, for his recent Certified Road Supervisor certification.
Does this mean Mr. Brown is now qualified to be a flag person at a road construction job ;-)

Deputations

5.1 – Brad Weiler, Community Recreation and Programs Coordinator. Re: Update to Council on Community Recreation Programing.

5.2 – Aleesha Mullen, Owner/Operator Parry Sound Bikes. Re: Review of her proposal submitted for the Old Fire Hall.
I suspect that this will be a more acceptable proposal, assuming the offer price for the property meets the Town’s expectations. It will cause less ‘after 6:00’ traffic in this semi-residential area which is a concern to local residents. Both this proposal, which I imagine is a bike shop, and Maurizio’s restaurant, are reasonable uses of the property. Let’s just make sure the building isn’t lost through neglect. What’s up for sale next? The CN Station? The Town really doesn’t have the resources or interest in fixing up and using, or renting out, either of these buildings.

5.3 – Debbie Hill, President of CUPE #2049. Re: Update to Council on the status of the CAS lock out of CUPE #2049.

Consent Agenda

8.3 – Funding Formula for Gas Tax, Resolution. Whereas the provincial gas tax funding formula has not received an increase in over 10 years, since 2006; and Whereas with the implementation of Cap and Trade January 1, 2017 it is more expensive for municipalities consuming the fuel; and Whereas the City of Owen Sound adopted a resolution to send a letter to the Minister of Transportation, the Honourable Steven Del Duca, stipulating these facts and requesting that the formulas be revisited; Now, therefore be it resolved that the Council for the Town of Parry Sound supports the City of Owen Sound and will also send a letter to Minister of Transportation to request a review of the gas tax; and Further that this resolution be forwarded to the Association of Municipalities of Ontario, the Federation of Northern Ontario Municipalities, Norm Miller, M.L.A. for Parry Sound-Muskoka and all Ontario municipalities.

8.4 – Property Taxation on Railways. Resolution. Whereas it has been identified that railway companies in the province of Ontario, do not pay a proportionate share of municipal property tax as compared to other properties in their class, or compared to any other municipal tax class; and Whereas in other provinces and jurisdictions the railway companies do remit a more equitable share of taxes to the local tax base; and Whereas taxes in other jurisdictions for railway properties are calculated using a tonmile concept; and Whereas said fees are reviewed and adjusted on a regular basis according to inflation and ongoing current conditions; and Whereas the Province of Ontario has continued to fall further and further behind in their approach to railroad property taxation over the past 112 plus years; Now, Therefore Be It Resolved That the Town of Parry Sound supports the Resolutions passed by Fort Frances, Atikokan and Marathon and calls upon the Minister of Finance for the Province of Ontario to implement a new system of municipal property taxation for railroad right-of-way properties based on utilizing a per ton-mile concept; and Further that this resolution be forwarded to the Association of Municipalities of Ontario, the Federation of Northern Ontario Municipalities, Northwestern Ontario Municipal Association, Norm Miller, M.L.A. for Parry Sound-Muskoka and all Ontario municipalities.
Yup, the railways get a ‘free ride’ from the Feds and the Provinces at the expense of local municipalities. As the Province pulls back local funding, the Municipalities need to look for alternative sources of revenue. The highly profitable railways need to start paying their fair share.

8.6 – 2016 Integrity Commissioner Report. Resolution. Whereas the Council, Boards and Committees Code of Conduct stipulates that the Integrity Commissioner shall file his/her annual report regarding any activities to Council no later than March 31st of each year; and That should there be no complaints/investigations for the year, in this case, 2016, then the Clerk shall report to Council accordingly; Therefore, the Clerk reports that the former Integrity Commissioner, Suzanne Craig, and the current Integrity Commissioner, George Rust-D’Eye have reported that there were no formal complaints filed nor investigations conducted in the year 2016.
No hits, no runs and no complaints. Call it a win.

Resolutions and Direction to Staff

9.3.1 – Bill 68, Modernizing Ontario’s Municipal Legislation Act. Resolution. That Council for the Town of Parry Sound acknowledge receipt of the attached Report and Recommendation regarding changes to the Municipal Act and the Municipal Conflict of Interest Act by the introduction of Bill 68, Modernizing Ontario’s Municipal Legislation Act.
The closed session changes in this legislation really don’t do much to ensure additional transparency. The simple action of having a “closed meeting investigator” does not make me more comfortable. The investigator can only review what is officially recorded in the closed meeting minutes, which of course does not necessarily reflect all of the discussion. I don’t question the integrity of Council; I do question whether the Public gets the benefit of all discussion and concerns that may be expressed in closed sessions that should be shared in open sessions.

9.4.1 – Ontario Regulation 284/09. Resolution. That Council hereby adopts the compliance report for expenses excluded from the 2017 budget outlined in the staff report “Ontario Regulation 284/09”, attached as Schedule “A”, as a requirement of Ontario Regulation 284/09 passed under the Municipal Act, 2001.

9.4.2 – Vacancy Tax Rebate Review. Direction. That Staff initiate the required consultation process for the modification or elimination of the Vacancy Tax Rebate, as outlined by the Ministry of Finance (once available).
This is an interesting rebate program that provides commercial property owners with an effective 30% reduction in property taxes if the property is vacant. This can lead to landlords preferring to leave a property vacant rather than use it, or rent it out. Because of provincial legislation the Town has the opportunity to redefine its local policy in this regard. The Town intends to engage with the community to understand how Parry Sound should define it’s vacancy rate policy.

9.4.3 – Co-location of Lakeland Power Customer Service. Direction. That Staff work with Lakeland Power to develop a co-location agreement which includes the redesign of the front reception office and that staff attain the services of an appropriate consultant to advise on the redesign.

9.4.4 – 2017 Parry Sound Public Library Budget. Resolution. Whereas S.24(1) of the Libraries Act requires that the Parry Sound Public Library provide its annual budget to the Council of the Town of Parry Sound; And Whereas S.24 (2) of the Act provides Council the ability to approve, reject or amend the budget; Now Therefore be it resolved that the 2017 budget for the Parry Sound Public Library, attached as Schedule “A”, is approved.

9.6.1 Request for Donation to the Treetops Community Forest. Resolution. That Council hereby will provide a grant of $____________ to the Treetops Community Forest to be funded from the 2017 Budget; and That the direction passed January 10, 2017 be amended to include the above addition.
I recall that when the project was first brought before Council there was a ‘promise’ that the project would not require funding from the Town. Well here we are with an ask for $10K. It’s hard to oppose the ask, but somehow I feel as though we been ‘duped’. I’m sure there was never an intention to come back to Council for money, but that’s too often the case with poorly planned projects. Better to ask for funding and forgiveness after reality sets in.

By-laws

10.1.1 – Extension of Agreement – Massasauga Management Co. Inc. – Big Sound Marina. By-law 2017 – 6704. Being a By-law to amend By-law No: 2014-6428, the operating agreement between Massasauga Management Co. Inc. and the Town of Parry Sound for operation of Big Sound Marina and the Town Dock, conditional on the Department of Fisheries and Oceans Canada approving the operating agreement and the extension of a head lease between the Town and Department of Fisheries and Oceans or the completion of the divestiture process.

10.1.3 – Rezoning Application – Z/16/07 – 25 Mary Street – Old Fire Hall. By-law 2017 – 6706. Being a By-law to amend By-law No. 2004-4653 (The Zoning By-law), as amended, for 25 Mary Street (Old Fire Hall).
Staff recommends approval of the rezoning application.

10.4.1 – Tax Policies – Capping and New to Class / New Construction. By-law 2017 – 6707. Being a bylaw to specify our Tax Policies, including the claw back percentage, the capping threshold parameters, the minimum tax level for new to class / new construction and to exclude certain properties from the capping program for the year 2017.

10.4.2 – Tax Ratios for 2017. By-law 2017 – 6708. Being a by-law to set Tax Ratios for Municipal purposes for the year 2017.
Staff is recommending that the Town adopt the same ratios as last year with the understanding that while they seem to be in-line with other municipalities in Ontario they are outside the Province’s ‘range of fairness’.

10.4.3 – 2017 Budget. By-law 2017 – 6709. Being a By-law to Adopt the Operating and Capital Budget Estimates for the Year 2017.
No surprises here. I recommend reading the accompanying R&R in the Council Agenda Package to get a nice summary of the 2017 Budget and the factors that impact how it will play out for individual commercial and residential property owners.

10.4.4 – Scale of Cost for Property Tax Sale. By-law 2017 – 6710. Being a bylaw to establish a policy and scale of cost for the sale of land for tax arrears pursuant to Section 385 of the Municipal Act, 2001, c25.
This is an update to 1998 legislation and increases the fees payable to the Town.

Lonely Buoy

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Budget 2017 – Draft By-law

31 Tuesday Jan 2017

Posted by in Budget/Financial, Parry Sound

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Last week saw the publication of the draft by-law to adopt the Parry Sound operating and capital budget estimates for 2017. It’s 122 pages of goodness for those of you who are interested. I plan to spend a couple of hours going through it for no other reason than to find typos and torture our Director of Finance & POA Court Services ;-)

Actually, I prefer this format for focusing in on the details. Don’t expect any comments or revelations in future posts. They would only be of interest to those who are interested in the budget, and I suspect they are already on staff or members of Council.

You can find the by-law at the Town’s website, or you can use this shortcut.

The Mid-January Fog Has Finally Lifted

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Budget 2017 – Big Plans

19 Thursday Jan 2017

Posted by in Budget/Financial, Parry Sound, Town Council

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While the 2017 Budget is largely in the can, there are a few financial related issues that may be of interest to Town of Parry Sound ratepayers. In addition to the capital budget items defined in the 2017 Budget, the budget meeting on January 10th also unveiled some longer range capital expenditure possibilities. Possibilities is probably the best way to describe these capital expenditures. There is no agreement that these investments will be made, and if they are, there is no firm commitment as to when they will definitively arrive.

The table below is taken from the January 10th budget meeting.

parry-sound-projects-p-3-2017-01-10

A few initial thoughts on the planned expenses.

BOCC Floor Replacement: Likes roads, facilities need ongoing maintenance and from time to time major investments. That’s why ice time isn’t free.

Champagne Street: This may be related to plans for future development in the area, whether or not it is a casino. The street is so short that it’s hard to imagine it would cost $1.5 million to refurbish the street for it’s current users. This would be a major artery servicing a casino or a condo development.

Property Purchase: $4 million, hmmm! I wonder where this might be. My sense is that it would be on the waterfront area between the Town Dock and Big Sound Marina. There are rumours that the OPP are planning a new facility off of the 400, and perhaps Service Canada and the MNR people are planning to leave. That might mean the Town has to come up with some cash to purchase the land so that these organizations can afford new facilities. But it’s only a guess. I don’t think that it relates to the former Shell or imperial Oil properties on the other side of the harbour, but its only my best guess.

Parry Sound Road Extension: The connection to Oastler Drive (Old 69). This seems to be a critical element in the Town’s strategy to open up the south east side of Town for future development. It would be the major access route for a casino, and/or and Innovation Park, and/or industrial development of the properties on the Seguin side of the road that have made overtures to join Parry Sound. At the very least it will keep the Fowler salt trucks off Bowes Street.

Great North Road: This is the stretch of road between Bowes Street and Champagne Street. It’s due for an update/upgrade.

Innovation Park: This is a project discussed in general terms at an open meeting earlier in 2016. I understand that it would be located on Parry Sound Road across from the Weeks facility, another reason for the Parry Sound Road extension.

There you have it, the near term thinking of the Town Council and Staff with regards to the the next phase of capital investments. Add up the figure and these investments are likely to add an additional 11% or so to your tax bills by 2021. It’s possible that the impact will not be so great if some of the older debentures are paid off in the interim. Add to that another 1.8% per year increase for the Infrastructure Reserve fund and you could be looking at 2021 Parry Sound taxes being about 20% higher than the 2017 tax levels. Add in a lowball estimate of a 2.5% annual increase for the usual inflationary and service improvements and you are looking at your tax rising by about 30% over the next 4 years.

The chart below is from the January 10th presentation and summarizes the projected changes in the Town’s annual debt servicing costs if the proposed projects are undertaken.

parry-sound-debt-p6-2017-01-10

All of this suggests that the Town may be looking at a casino development as the answer to it’s continually increasing taxes. (Seven comes eleven, baby needs a new pair of shoes, or in our case roads). Right now Parry Sound pays about 3 times the municipal taxes of Seguin and Carling on an assessed value basis. That may stretch to a 4 times figure by 2021.

If you have any thoughts about where this is headed you may want to speak to Council.

Here is a link to the full January 10, 2017 presentation.

Budget 2017 – The Principles of Sausage Making

14 Saturday Jan 2017

Posted by in Budget/Financial, Parry Sound, Town Council

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A bit of this and a bit of that, throw it into a grinder, add a bit of spice to mask things, and squeeze into casings. Yum. Tastes great, even if it seems a bit pricey. But, don’t ask about exactly what it’s made from – you really don’t want to know.

Parry Sound Council this past week reached agreement on the details of the 2017 Budget. As discussed in an earlier post, Council managed to find ways to hit the low end of the original budget target. That still means taxes will be up about 5% or more for most residential properties, but it quite easily could have been higher.

What’s In?
The budget included a number of new initiatives as well as some older issues that couldn’t be put off any longer. What’s in includes:

  1. Funding for an Economic Development Officer for a three year period. Council seemed very upbeat with respect to a candidate they had identified to take the position. ($75,000/year annualized, contract salary and marketing materials)
  2. Funding for a Recreation Programmer, permanent full-time. ($84,000, annualized staffing and program delivery costs)
  3. Funding for a tourism intern. ($12,000, staffing and materials)
  4. Repairs to the Stockey Centre roof. ($700,000 to be debentured)
  5. MADVAC, a vacuum cleaner on wheels for the downtown. ($60,000)
  6. Repairs to the retaining wall at Louisa/Bowes Street. ($160,000, from reserves)
  7. Human Resources position increased to five days per week.
  8. Parry Sound Road extension feasibility study. ($100,000, from reserves)
  9. Great North Road design. ($900,000, from reserves)

What Not?
Some expenses were cut and others were reduced. Here are the more notable cuts and/or reductions:

  1. Cut – Repairs to the Old Fire Hall. (more on this below)
  2. Cut – Staff position and resources to expand hazardous waste collection and disposal. ($68,000)
  3. Cut – Isabella Street sidewalks and water services upgrade.
  4. Reduced – Waubeek Street revitalization limited to Avenue Road to Prospect Street, including Prospect Street and the services to the Coast Guard Station.
  5. Reduced – Downtown facade improvement program reduced to $25,000 for 2017.

Old Fire Hall
An Old Fire Hall revitalization was originally budgeted as a $250,000 expense for 2017 (debentured). In the closed session of council on Tuesday the decision was apparently made to sell the Fire Hall. It makes sense, the building is in serious need of repair and as such really doesn’t provide any value as is for the Town. There was an earlier suggestion that the Town would renovate the hall and then lease it out, probably for a restaurant type use. Instead of paying for repair and renovation and then hoping for a lessee, the decision is to sell the hall. I’m not privy to the business case but it makes sense.

What is a little worrying is the Town’s reliance on selling land and properties to cover the cost of normal operations. In the past five years the Town has sold Parry Sound Power, lots on William Street, the Old Pump House and other smaller properties. This year we will be selling the Old Fire Hall. What’s next? What has become of these funds? The millions we received for Parry Sound Power were put into a reserve and to the best of my understanding has been siphoned off bit by bit. One million of that reserve is earmarked for design and engineering plans for Parry Sound Road and Great North Road. I’m told that it is effectively a loan and will be replaced when the project starts and is debentured.

Using the Parry Sound Power funds to front money for a large infrastructure project makes sense. I probably makes more sense than taking a loan to fund the project. It’s a bit like taking a loan from your RSP to pay for the downpayment on a new house. As long as you pay it back in a reasonable timeframe there is no foul.

My bigger concern is the Town’s reliance on selling assets the past five years to meet annual expenditures. It has probably shaved about 3% or 4% off our tax rates which is a good thing. But is it a bit like selling the family silver to cover the mortgage payment. Yes, you don’t regularly use Grandma’s silver, but once it’s gone, it’s gone. And it will be much, much more expensive to try and get it back. It’s like pawning a ring or a guitar, you can never buy something similar for anything close to what you can sell it for. So what are we going to sell next to make ends meet? The North Shore Road allowance?

Overall I’m okay with the budget. The 5% increase in taxes I’ll see in 2017 is something I can afford. I’m not so sure that everyone is in a similarly comfortable position. Don’t bitch about taxes unless you actually invest some time and effort understanding the choices facing Staff and Council, and then share your thoughts. Your opinion may not make a difference, but put together a dozen opinions and I suspect Council will start paying attention. The Citizen’s Finance Committee went nowhere, because the members didn’t bother to show up for the budget meetings. You don’t get the budget you deserve or want, you get the budget other’s think you need.

Addendum:

Once the final draft of the budget is made available I’ll provide a summary of the key points, most notably where the money is going. I am planning to comment on the updated capital projects list presented at last Tuesday’s budget once the document is made available. I had hoped it would be online by Friday. I will follow up with Staff on Monday to get a copy that can be shared with the public. It’s interesting, and so very expensive. One item was a $4 million property purchase. Another related to an Innovation Centre. Big plans and presumably big budgets. Does that translate into big taxes?

Budget 2017 – Agreement in Principle

12 Thursday Jan 2017

Posted by in Budget/Financial, Parry Sound, Town Council

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The Special Meeting of Parry Sound Council on Tuesday night saw tentative agreement on a budget for 2017. You had to be there to understand what was decided. I’ll provide the highlights, but I don’t claim to be a reporter. The official media were conspicuously absent. You have to wonder how council meetings would proceed in the absence of an audience. I am pleased to note that the 2017 Budget does include funding for the recording and online posting of all council meetings, regular and special meetings. I wonder how much ‘editing’ there will be. It would be best if there were none and the viewer could choose to skip over section that are not of interest.

The net/net of the budget discussion is that Council has made sufficient cuts to the draft budget to hit the lower end of the target 2017 Budget range. Final figures will only be presented at the February 7th meeting, but it’s possible to infer some estimates based on earlier budget documents. My estimate of the total 2017 levy increase is about 3.5%. This implies that the average tax increases by property class will be:

Residential +5.5%
Commercial +1.5%
Condo +12%
Multi-residential +15%

Note that these are average figures for a class of properties. Individual taxes will vary from these averages based on individual assessment changes. If you have a home and your assessment went down in the 2016 assessment it’s likely you will be receiving the average Residential tax increase noted above. If your assessment went up you will likely see a slightly higher increase. Please recognize that these are my best estimates of the tax increases. I don’t have access to the Excel spreadsheets that tote up the figures. If you have concerns or questions I suggest you contact Trevor Pinn, the Director of Finance and POA Courts. He probably won’t have final figures but he will be able to provide more informed estimates.

The cuts made to the draft budget to get to the tentative 2017 Budget will be the subject of a separate post. There are always surprises aren’t there? Why watch a canned and scripted drama show on television when you can see things evolve in real time at council meetings? And like a good television series the story of Parry Sound municipal politics unfolds from one season to the next. And it’s all unscripted – reality TV at its best. But like British entertainment it’s a bit subtle and doesn’t come with a laugh track.

Here are the property assessments underlying the increases as found in the Town of Parry Sound budget presentation of December 13, 2016. You will note that the total Parry Sound assessment is a little above $800 million. The total assessment for our neighbour Seguin is well above $3 billion.

2017-budget-assessments

Up, Up and Away…..

31 Saturday Dec 2016

Posted by in Budget/Financial, Parry Sound, Town Council

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taxes that is, especially for those of you who owns a condo.

For condo owners it’s a case of good news and bad news. The good news is that the value of your property as assessed by MPAC (Municipal Property Assessment Corporation) has increased substantially over the past four years. The bad news is that almost all other properties in Parry Sound have decreased in their assessed values, meaning more of the tax burden is being shifted to condos.

For residential property owners the news is not so good, and not so bad. Property values on average have dropped, and taxes are going up, but not as much as for condo owners.

For business property owners (Commercial) the news is not so good, and good. The not so good is that the assessed values for business properties have in general dropped significantly, translating into a lower average tax increase. The big box stores who appealed their assessments at the provincial level have seen their local property values drop significantly. For businesses the drop in property assessment values really is good news in that it stabilizes property taxes in a tax increasing environment. Since business sale prices are based on revenue and profit, not property assessment values, the reduction in commercial assessments actually improves the bottom line, and eventual sale prices.

For the Town of Parry Sound the news is not so good; overall assessments are down and unless expenses can be trimmed the burden of taxes needs to be shifted.

For condo owners there is a bit more news, good and bad. Increases in assessed value on properties are phased in over four years, not in the first year. That means if your property was previously assessed at $100,000 and the reassessed value was $200,000 (you wish, but it makes for simpler numbers), your assessed property value for tax purposes would rise to $125,000 in the first year, $150,000 in the second, $175,000 in the third and $200,000 in the fourth. Because of this provision it means your property values, and taxes don’t go up by the full reassessed value of $200,000 in the first year. The bad news is that your property taxes will increase in each of the next four years because of the increased assessed value of your condo, in addition to the Town’s annual spending increase.

How does this all translate in terms of tax increases for 2017 in Parry Sound? The table below if taken from the Staff presentation to Parry Sound Council December 13, 2016. The figures are based on the current budget as proposed by Staff. It’s possible that these figures could go up, or down, by 1% depending on decisions still to be made by Council.

budget-2016-12-31

I have been laisez faire with respect to Parry Sound budgets for the past few years, figuring the new expenses were related to necessary items and services. I feel that if you need new snow tires for your car you probably want to buy them before you have an accident that will cost even more, even it requires a loan. But, do you need to take out a loan for that week in Cuba or Costa Rica, or a new snow machine, or ATV? There is need to spend, and nice to spend. Based on budget meetings to date I’m not sure that Council is paying attention to the difference. At the last meeting of Council a new ’music garden’ park was approved, and I really don’t get it. Yes, it is a nice to have, and yes, much of it was in the reserves, but what about next year if/when one of the existing parks needs some significant repair or it needs an upgrade? As a municipality have we sufficiently satisfied our needs that we can afford to be looking at 2%, 7% and 13% tax increases to support nice to have budget items?

Parry Sound is figuratively taking a pay cut in 2017 because of the MPAC reassessment. Actually it really isn’t a pay cut, it’s a redistribution of who is carrying a larger or lesser portion of the overall tax burden. Condo owners are taking on more, and business owner’s are taking on less. It’s likely that condo owners who are facing an average 13% tax increase in 2017 could be facing 50% higher taxes in four years than they were in 2016 by the time all four years of the reassessed condo value has hit their taxes. Ouch!

I don’t own a condo, and I don’t necessarily think they should be given a ‘break’. Their properties have increased in value and that means they should pay more. I pay more in taxes than some of my neighbours because I have a higher assessed property, and that seems fair. I do think that Council needs to pay attention to what is necessary and what is nice in the budget. Over the past few years they have been remarkably ‘generous’ in their approval of expenses that are more nice to have than need to have. I labeled the 2016 Parry Sound Budget the ‘pickle ball budget’ because budget was allocated to organize pickle ball play, among other recreational activities. I’m not sure that we saw any pickle balling, but it was one of the many reasons for last year’s tax increase. Is pickle ball, or any number of other items in the 2017 Budget, something we need, or are they things we want? Do we even want these nice to have items?

Is anybody else paying attention to the Parry Sound budget? Council is made up of good people who want to do the right thing, and not feel as though they are a Grinch stealing joy from the residents by cutting services or rejecting new initiatives. They need your input to understand what you feel is need to have and what is nice to have. Here are links to the various budget documents. At least look at the Capital Budget Overview and Tax Impact Presentation (December 13th) to get a short overview of where the 2017 Budget stands at this point and how it impacts your property taxes.

2017 Budget Schedule

Proposed 2017 Budget

Budget Overview Presentation

Capital Budget Overview and Tax Impact Presentation (December 13th)

Note: not all condo owners will see the full 12.98% increase in 2017 because their condo assessment might not have risen as high as the average. Others may see an even higher increase if their property assessment increase was above the average. That will be the case for all property owners, you are seeing the average impact, not necessarily how the 2017 increase will impact you.

The Path Less Chosen. A bit more demanding but more rewarding.

redwood1890-20161218-dsc_1056

North Shore Rugged Trail