Two meetings were held at the North Simcoe Sports and Recreation Center (NSSRC) Thursday night concerning the Management Study being conducted by KPMG Consultants. The first meeting was an opportunity for the public to provide input. The second meeting was a presentation to Council of KPMG’s findings and options for cost savings.
The public input session was well attended. The former Midland CAO and a former Midland Mayor who were in office when Midland approved building the NSSRC suggested that Midland operates efficiently with affordable services. They disputed the fact that Midland is a low-income community with poor employment prospects and low assessment growth.
Moreland Lynn, also a former Mayor, made an excellent deputation in which he spoke of the need to enhance Midland’s economic development efforts by assigning the mandate to an Economic Development Office that is responsible only for this function. He pointed to the apparent lack of success on the part of Midland and Penetanguishene in capitalizing on their shared status as an urban growth node. Finally he chastised the petty behaviour of Council and its impact on Midland’s reputation. His deputation is posted on the MidlandCommunity.ca website.
The meeting also heard from several advocates for various recreation programs including minor hockey, lacrosse and the Askennonia Seniors Centre who expressed concern about NSSRC fee increases if the Town implements any recommendation to increase them. Many said the Town should not increase rental rates even for non-residents due to low employment rates in North Simcoe and a high percentage of low-income users.
MidlandCommunity.ca made the case for ending runaway spending with 10 recommendations in a presentation entitled “The Imperative for Controlling Midland Town Spending” (posted on our website). Staffing costs remain the elephant in the room that everyone seems reluctant to address. Midland’s costs will increase about $600,000 (equivalent to a 3% tax increase) on January 1, 2013 and each following year just for wage and benefit increases for the Town’s current employees.
On Parks & Recreation, our deputation included several suggestions for reducing costs. On user fees at the NSSRC, we suggested increasing fees for those who can afford them and providing subsidies for individuals who need financial assistance in order to participate. It is a fact that most households in Midland pay hundreds of dollars each year in user fees without any subsidy for drinking water that everyone needs just to survive. We have suggested those who can afford to pay more for their recreation wants should be required to pay more including the 50% of NSSRC users who benefit from the facilities but do not live in Midland.
Kevin Cowie also made an excellent case for better controls on spending and for rigorous follow-up to assess major projects and their financial performance. Did the Council of the day know the NSSRC would have more than a $1million annual operating deficit when they approved building it? Did Council make a bad decision or did it receive bad advice? The kind of rigorous follow-up Kevin endorses would discourage overly optimistic projections that encourage projects that end up being financial disasters. Kevin’s deputation is also posted on our website.
The second meeting saw KPMG present Council with a number of options for cost savings during a 3-hour session that began after the public input meeting concluded. KPMG indicated that Midland has extremely high service levels generally and used the term ‘Cadillac’ several times when identifying cost-saving opportunities. Payroll costs are a significant driver of costs (page 7 of KPMG’s presentation posted on our website). Efforts to reduce this cost will be dealt with behind closed doors. Fire stood out in particular with 16.7% annual payroll increases between 2008 and 2011 (page 34 of KPMG’s presentation).
Parks and Recreation also figured prominently in the presentation. Despite the fact over 50% of the users of the NSSRC are not Midland residents, Midland taxpayers are currently shouldering all principal and interest payments on the $5 million debt Midland incurred to build it as well as the operating deficit for the facility.
KPMG has suggested shifting about 50% of the debt costs to non-resident users of the NSSRC (page 22). In coming weeks, we hope they will also examine our suggestion to sell surplus assets to reduce or eliminate the NSSRC debt entirely. Eliminating that debt would reduce operating costs and free up money for worthy purposes, such as providing enhanced subsidies for local organizations and those with special needs.
Whatever choices are ultimately made on any of the ‘opportunities’ KPMG has identified, the fact remains Midland must find ways to reduce its ongoing costs. You name it, Midland spends more for almost every service than most other municipalities in Simcoe County. And we spend far too much once you recognize incomes in Midland are lower than anywhere else in the County. Our future will remain bleak with no significant growth until Midland no longer has the highest taxes for new development in Simcoe County.
Council has directed Town staff to present the 2013 budget with three options, a 2% decrease in spending, a 0% flat budget and a 2% increase. With a year-over-year labour cost increase equivalent to a 3% tax increase, every one of these options requires spending reductions, ranging from a low of $408,000 (+2%) to a high of $1.09 million (-2%).
We urge citizens to support Council in staying the course in its efforts to control Town spending. KPMG has indicated we have many ‘Cadillac’ service levels. They have presented options that can result in large savings without taking needed services away from people. We urge Council to carefully examine every option KPMG presents and put Midland on a proper course to a better future.
Stewart Strathearn and George Dixon on behalf of midlandcommunity.ca
Read the full KPMG-report-midland-august-2012 here.