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Council will hear there’s no obvious area for budget cost savings

With an eye to budget deliberations beginning at month end, council is being told “there are no obvious areas where cost savings can be achieved without negatively impacting current service levels.”

In a report prepared for council’s first meeting of the year, Tuesday night, Amanda Carter, Director of Finance provides context for the elected decision makers to wade through the budget under three key areas. They will also hear about unfinanced capital related to the Wellington arena and the new fire hall at Picton.

She provided tables showing how budget numbers pull together to give councillors insight as to where the majority of costs are.

“As we move toward budget meetings, council should be mindful that areas to influence costs are relatively limited,” her report states.

In July, council directed staff to break their department budgets into three categories – statutory costs, policy and agreement costs, and other costs.

“Staff have worked hard over the past five months to review all of their departmental costs and to realign thier budgets into three categories,” said Carter. “The report finds that overall, 80.8 per cent of the municipality’s net costs are statutory, 19.8 per cent are policy/agreement driven and -0.6 per cent, other.”

Her report notes 43.7 per cent of the County’s expenditures are of a policy/agreement nature.

“In order to achieve cost savings in this category, a service delivery review should be undertaken. The current policy and statutory framework doesn’t allow much flexibility in terms of being able to cut or reduce costs,” she states. “In order to achieve savings, we need to review our current policy and procedural framework.”

The number of bylaws, policies and agreements to be enforced and managed, she said “is enormous. With our current policy/agreement framework, 43.7 per cent of the County’s expenditures are required to support this area.”

Statutory costs: All costs related to employees, including equpment and supplies required to carry out duties, as well as costs tied to federal or provincial regulation (minimum maintenance standards) – examples include wages, data processing and communications, supplies, equipment charges, legal costs.

Policy/Agreements: All revenue with the exception of donations, along with costs incurred to provide the service, as well as fees charged as a result of fees and charges bylaw; federal and provincial grants and cost tied to a transfer payment agreement and costs related to contracted services. Examples include rents, utilities, equipment rent, contracted and professional services, legal costs and materials.

Other: Donations received for projects of community interest and some costs related to employees not seen as statutory. Includes travel and conferences, transfers to reserves, cost recoveries, advertising and promotion.

In another report to council for Tuesday night, Carter is submitting a report with options to consider to fund current unfinanced capital.

Two major capital projects completed have an unfinanced balance – the Wellington and District Community Centre, and the new Picton fire hall.

The community centre was funded by donations through a fundraising committee, debt and government grants.
“The fundraising committee took in pledges and reached their goal, however, some of these pledges were never realized although attempts were made, leaving a balance of $109,145 to be financed,” states Carter.

The new fire hall was to be funded by debt and the proceeds on disposal of the old fire hall in the Picton Town Hall building. As it has not been sold, Carter notes this leaves a balance of $450,157 to be financed.

“Staff’s recommended option is to create amortization schedules at the current cost of borrowing and raise the funds on the tax levy to fund the outstanding balance,” states Carter. “Rather than pay a lending facility the interest in this case we would allocate the interest to the Reserve for Capital Sustainability. This method would allow for a definitive time frame (15 and 30 years) for repayment and will not impact our annual repayment limit for future borrowing needs.”

Another option is to direct proceeds from all surplus property sales (with the exception of industrial park properties).

“This method could take many years as the inventory of surplus properties is not robust and the estimated proceeds would not cover the outstanding balance for an estimated minimum of 60 years.”

If council approves staff’s recommendation, a $32,311 levy would be included in the 2020 budget.

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  1. Chris Keen says:

    The numbers in this report are very confusing, if I am reading it correctly. I see that 80.8% of the municipality’s costs are statutory. The report then claims either 19.8% of the County’s costs are policy/ agreement expenses or, as later stated, 43.7%! Not very helpful.

    What would be useful is a breakdown of what the County is legally required to provide its residents and those costs, and what programs are discretionary and their costs. Then there can be meaningful discussion over the latter group, their necessity, and whether not taxpayers can afford them. There is no point Council wasting time discussing items over which they have no legal control.

    The way I interpret this report it appears to suggest there is nowhere to cut costs, which simply cannot be the case. We need more clarity.

    Oh, and don’t forget this year we will continue to pay a “levy” (not a tax 😊) of 2.5% for roads and 1% for the new hospital – both inarguably necessary – on top of whatever else Council comes up with.

  2. Angela says:

    If most families ran their household finances the way council runs the county they would be courting bankruptcy. Whatever happened to common sense? Maybe it is time they cut out or cut down on some of the grants they generously provide each year. Do they even track what the recipients do with this money?

  3. Dennis Fox says:

    At times like this, I get annoyed with our council – first they tell the public that tax increases are off the board because they have foolishly and publicly directed staff to find a 10% savings in all departments – a pie in the sky goal, but a good deflection. Now they are being told by staff that what they wanted is impossible – so why is Council so out of step with reality?

    So between overspending on the arena, the new fire hall, and let’s not forget the sewage plant, and close to $200K on 30 trees for downtown, our council has spend foolishly and has placed this community in the position of perhaps having to sell off public assets – like the Picton Town Hall or some other piece of “public” property to make up for their mistakes.

    The one thing they did have control over was the size of council and we know the nonsense that took place around that. If they had reduced their number by 5 – the public could have saved over $100k/yr – times 10 years and that’s a cool million. With the length of time this community suffered through their “save my job” foolishness, we could be at least a million dollars richer by now – instead the public will pay that forever, over and over again. And they wonder why the public rolls their eyes whenever they speak? Good grief!

  4. Argyle says:

    What’s 600 grand in debt for a Taj Mahal of an arena and a town hall that council conveniently calls a fire hall. All council needs to do is cut back on their addiction to hiring consultants for every order of business. I am sure the annual savings doing this would be more than enough to cover the debt load of both these buildings.

  5. Angela says:

    The town hall should not have been sold. Maybe savings could start with a few cuts at Shire Hall. It seems top heavy with staff.

  6. Fred says:

    It’s not the old Fire Hall. It is and always was the Picton Town Hall. The Fire Dep’t were allowed to take up lower space in our Town Hall. The new fire station should never have been financed by selling the “Town Hall”!

  7. Todd says:

    “The new fire hall was to be funded by debt and the proceeds on disposal of the old fire hall in the Picton Town Hall building. As it has not been sold, Carter notes this leaves a balance of $450,157 to be financed.”

    The vast majority of County folks have no use for the old Fire Hall. Sell it already, it should not be owned by the County.

  8. Fred says:

    Each Department had been tasked in finding 10% savings. Seems none has been found anywhere. This on the heels of the Mayors levee address which indicated the Countys future was bright. Also increasing permit and rental fees is not departmental savings, as it is directly increasing taxpayers costs.

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