Town starts trimming budget with more sessions planned for next week

 

Town Logo Small-webBy Ron Giofu

 

Town administration is confident there will not be a double-digit increase to the municipal tax rate after council whacked approximately $210,500 out of its budget during an all-day budget session Tuesday.

Gone for 2014 is the yard waste depot on Thomas Road, overtime for the human resources department, a $30,000 cut to council and CAO travel expenses and the visitor information centre on Front Road. The town had the option of eliminating grants to outside organizations, crossing guards, the Lions Pool, funding for the Santa Claus Parade and reducing splash pad hours but chose to keep those costs.

The blended tax rate, which includes county and education rates, currently sits at 4.81 per cent. Interim director of finance Wendy Dade indicated the town’s rate had dropped below double-digits to 8.76 per cent with more budget sessions to come next week. The 4.81 per cent overall figure, nor the 8.76 figure, does not include the potential sale of the Essex Power shares to Entegrus. While council has not officially voted, four raised their hands when polled by a resident last Tuesday at a public meeting stating they favoured keeping the shares. Factoring in a possible sale, the blended rate would currently sit at 3.42 per cent with the municipal rate being 6.28 per cent.

A public meeting to specifically deal with that is being planned for May 6 at 6 p.m.

The yard waste depot, pegged during Tuesday’s budget session as a $66,000 savings to the ratepayers, was something most favoured. Councillor Bob Pillon said curbside yard waste collection is now offered and was in favour of closing the depot.

“We’re trying to get the budget down to a workable level,” said Pillon. “I’m all in favour of doing this.”
Deputy Mayor Ron Sutherland opposed, stating it was tough to take away a service that’s already being offered.

“Once you bring something in, it’s tough to take it away,” said Sutherland. “It’s like taking candy from a baby.”

Libro Centre hours could also be altered, as director of recreation and culture Dean Collver noted hours are currently dictated through a municipal bylaw. He said if staff had better control, they could implement a “demand-type model” which could lead to savings. Collver’s “conservative guess” was $10,000.

A proposed measure to eliminate crossing guards – and save $38,000 in the process – was shot down overwhelmingly. Councillor Bart DiPasquale said it would be a “travesty” to take away that service while Councillor John Sutton agreed, saying it would be “sheer lunacy” to hack that out of the budget.

Council will also keep $12,000 in the budget for rural street lights and cut $30,000 in council and CAO expenditures although conferences already paid for would still be budgeted for.

A move to impose garbage limits, or “bag tags,” was defeated with that estimate being $250,000 in revenue. Sutton believed that issue would require further study while Councillor Carolyn Davies wanted feedback from the public before any such measure was adopted.

“I wouldn’t touch that with a ten-foot pole without public input,” said Davies.

Council will try and sell old equipment, such as the scoreboard, plexiglass and related items, from the former AMA Arena with $30,000 in revenue budgeted and will attempt to get $250,000 in revenue from the sale of surplus properties, though the latter would see individual parcels brought to council for final approval before sale.

Council will also try and sell the Malden Community & Cultural Centre with $240,000 in revenue budgeted for. There is a doll museum in it currently but Davies believed they could benefit from a larger location. Manager of tourism Anne Rota said their contract is up in November.

Rota also noted that the visitor information centre at the Gordon House outdraws the Front Road North location by a two-to-one margin, with council agreeing to close that to try and save $15,000. An idea to lease that space out for a private business, such as a souvenir shop, was floated as well.

The thought of stopping the $15,000 expenditure for sponsoring the Santa Claus Parade was shot down, with council members believing it was of value to the community. Administration listed a potential savings of $44,000 to close the Lion’s Pool this year but most councillors believed that would negatively impact the town.

“It makes sense to teach kids how to swim,” said Pillon.

“That pool is very valuable for our young folks. I think we have to keep it,” added Sutherland.

Mayor Wayne Hurst added that many don’t have swimming pools so he wanted council to consider leaving it open, which they did.

Town council also killed the thought of cutting back on the splash pad and selling a fire truck at station three. A total of $25,000 was taken out of the reforestation budget this year, however as part of the town’s cutbacks. New GPS units, totalling $12,500, will not be purchased this year.

Town council sent administration back to the drawing board after last Wednesday’s deliberations, stating that the 10.01 per cent increase that was on the table needed to be sliced – preferably in half or more.

“Ten per cent is not going to fly,” said Sutherland after last Wednesday’s session.

Sutherland stated that his view of the Entegrus offer for the town’s 14 per cent share in Essex Power was “off the table” based on the informal straw poll taken the previous night at the public meeting at the Libro Centre and the fact hundreds of residents have spoken against the sale. Sutherland also noted the 1,100-signature petition gathered by resident Richard Malott of people opposed to the sale.

Sutherland added there was “no fluff” in the budget and that administration did its due diligence but added the tax rate and the debt have to start coming down.

Hurst had asked council members during the meeting what they wanted to see in the 2014 budget and where they would like to see it come in at. Councillor Diane Pouget said she was “extremely disappointed” in the 10.01 per cent figure, adding “there was no will on council” to cut back. Pouget cited examples of the town’s unwillingness to pass motions on budget reducing measures adding they were not even allowed to vote on a motion asking for a zero per cent budget.

Pouget added she is opposed to the sale of the Essex Power shares and wanted the town’s costs cut by “cutting every area we can and keep the services we need.”

DiPasquale said that projects, many of them roadwork projects, need to be held in abeyance. If some projects can wait, he said they need to be held off.

“We have to bring (the tax rate increase) down to three or four per cent maximum, if we can,” said DiPasquale.

Pillon believed the Essex Power issue was over based on the informal vote the night before, something he said should not have been allowed to occur.

“Mr. Mayor, you shouldn’t have let that happen,” said Pillon.

Pillon called the public meeting “an eye-opener.” He added during last Wednesday’s session that the budget needs to be brought down to at least five per cent and suggested that the honorariums of elected officials could be suspended.

“We can help out,” he said.

Getting the budget down to five per cent was something he thought could happen.

“If we’ve got to do it, we’ll do it,” said Pillon. “A ten per cent tax increase is not doable. If you start putting ten per cent tax increases out there, you are going to push people away. We have to cut.”

Hurst told Pillon no official vote had taken place, stating “an individual off the floor” asked for a show of hands and members of council responded.

Davies believed “wiggle room is going to be tight” and that they could put the community at risk “if we go silly.” If projects are taken off the table this year, Davies feared they could eventually cost two to three times more when it comes time to finally do them.

“People think this town is a hell in a handbasket and it’s not,” she believed. Taxes are among the lowest in the province for a town the size of Amherstburg, she said, and bookkeeping irregularities are being repaired.

“The bottom line is, we are fixing it and we are doing what we can to fix it,” said Davies.

Sutton said the budget should be tied to debt reduction and rebuilding reserves, adding that council did not approve any motion to spend reserves on the projects they were spent on.

“Council never approved those expenditures,” he said.

Sutton added there has to be a debt reduction strategy that works. He added there is an “appetite” for cuts but said those cuts have to be “sustainable” with a “common sense approach.”

Hurst said at the last election, it was stressed that the debt was affordable and “we knew what we were doing.” He believed Amherstburg had made “great strides” and was positioned well for growth, saying the wastewater plant will no longer discharge raw sewage into the Detroit River and that multiple sewer and road projects have been undertaken. Other projects like the north and south gateways, Laird Ave., trails and the crosswalk at General Amherst High School have been completed.

“We need to start bragging about what has been done and why we are proud of it,” he said.

CAO Mike Phipps believed many of the statements at the public meeting on the Entegrus offer “were not based in fact” but believed even if the town makes a lot of cuts and rejects the offer, “you still have financial problems.” He told town council that former director of corporate services director Val Sequeira had prepared a draft budget with the initial projection being 17.4 per cent. That has been brought down to ten per cent.

Phipps believed even with a ten per cent tax increase, the town is still would have a relatively low rate compared to similar sized municipalities. If the town wants to keep only essential services, he added that administration needs clear direction from council as to what those essential services are.

In a memo to council included as part of the budget package, Dade noted that administration attempted to “provide a simplified budget in presentation and logic.” She noted that “a shift to a collective approach has been taken with many of the costs” and cited such examples as salaries and benefits of all employees have a single department or division to which their cost is charged in 2014.

“In 2013, many employees were split among multiple departments,” she stated. “This was confusing for the user of a departmental/divisional report in understanding the charges being incurred. It blurred the idea of staff counts in an area and was certainly complicated to record and reconcile.”

Dade noted that administration has been unable to reconcile the actual 2013 salaries and wages to the 2013 budget. She also stated that costs that relate to multiple departments or divisions that are not always easily allocated have been gathered into one account.

“Many of these accounts have been housed in a global expense department for lack of a more logical home department/division,” she said. “Some of the expenses now being gathered in this global department are insurance, postage, legal and advertising.”

Dade stated that splitting costs across departments/divisions “was more work administratively to record and more difficult for one individual to manage

“As well, this method of bookkeeping could be misleading for council, town residents and even administration,” she added. “Users of financial reports will now see the totals formerly spent in many categories in one location.”

There are less departments/divisions, she added, in order to “simplify and allow one spot for each managing person to gather the costs to which they are accountable,” she stated.

The biggest challenge in preparing the 2014 budget was likely the attempt to restate the 2013 budget to provide useful comparative figures, she added. Dade said the 2013 budget was redistributed “multiple times in 2013” and that when the budget process was initiated, it was not known that the 2013 budget displayed in the 2014 working documents was not the original budget council approved.

“When this was discovered, it provided a new layer of difficulty restating 2013 into a new 2014 format,” she stated.

The 2013 budget was not well understood, she continued, noting that when directors and managers came together for budget talks, “it was quickly realized this was a first for many.

“In the past, treasury was the sole source of many budget inputs, across many departments,” stated Dade. “This left managers/directors often unaware of how numbers were comprised.”

Dade added, “There are many instances when the variance from the 2013 budget to the 2014 budget cannot be explained. We are relying on the knowledge used to compile 2014 figures as the basis for budget presentation.”

Administration is also moving towards the concept of a base budget, she added, as “it was thought that the 2013 comparative information could be omitted as the town moved in the direction of presenting the base costs to run the town and offer a listing of transactions that were causing variations from this base. It was thought that the 2013 budget would offer the starting point of this logic.”

Dade added that when it was realized the 2013 budge wasn’t well understood in many cases, “this vein of thinking had to be somewhat abandoned.

“It should be clearly understood throughout the budget process that the 2013 budget lines cannot be relied upon in many instances,” she continued.

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