Update on Midland’s 2013 Operating Budget


This is an update on the state of Midland Council’s deliberations on the 2013 Operating Budget.

At a recent budget meeting, Council approved an interim budget that would see Midland’s spending increase by about 2% in 2013 and result in an average increase in Midland taxes of about 1.4% after some modest growth in the tax base.  (Taxes for individual properties in 2013 will increase more or less than 1.4% depending on whether your assessment increase is more or less than the average.)

The interim budget includes some $140,000 in new spending mainly for tourism, economic development and a one-time planning study of the Unimin site on Midland’s waterfront.  The demolition of the Unimin plant will reduce Midland’s tax base and increase pressure on other taxpayers until redevelopment of the site occurs.

The interim budget, expected to pass at next week’s Council meeting, shows all Town Departments at or below a 0% spending increase with one exception.  The exception is the Midland Police Service whose budget is not finalized and currently includes a 6.5% spending increase.  There is some expectation Police will sharpen their pencils and come back with a smaller increase thereby allowing the Town to achieve a lower overall increase.  Whether that happens remains to be seen.

To help keep this budget in perspective, we must remember that KPMG identified almost $1.75 million in cost savings opportunities.  As things stand now, Midland is only achieving part of these savings.  In fact even with the benefit of all KPMG’s work, Midland is on track for a 2013 tax increase that is higher than the 2012 increase.  Further, an ongoing poll conducted by midlandcommunity.ca asks the question: Do you support a $1.0 million reduction in spending that includes a 0% increase in Town taxes?”   The overwhelming response is 2-1 in favour of greater restraint (64%).  Currently the budget needs to be stripped of another $242,000 to achieve Council’s stated goal of 0%, and importantly the target supported by the community at large.

At the last budget meeting, Councillor Canning pointed to the lack of progress in dealing with the ‘structural issues’ facing the Town.  Personnel costs consume almost 70% of the budget leaving less than 30% for programs.  It is apparent to most that failure to deal with this structural imbalance will increasingly hamstring Council’s ability to respond to today’s challenge of marginal population/business growth resulting in very little new assessment monies.  At present personnel costs increase by about $600,000 every January 1st – equivalent to a 3% hike in taxes without any new staff added.

KPMG showed that up to 26 positions could be reduced through retirements over the next few years with staff reassigned to meet revised operational needs.  The latest draft budget shows this opportunity has not yet been fully explored although this structural issue is clearly the noose around our necks and the anchor around our feet.  Mayor McKay, in supporting the need to get spending under control, correctly pointed to KPMG’s warning that without action “tax increases averaging 3.6% per year were inevitable”.  He added the Town must change how it does business to maintain existing services. We couldn’t agree more with the Mayor, so we pose the obvious question, why should 1.4% be acceptable when the goal line is 0%?

Some other comments are warranted.  The largest budget pressures come from the Midland Police Service and the Midland Fire Department, amassing almost 40% of our annual operating budget.  Wages and benefits are by far the largest component of their spending.  Wage and benefit costs for Police and Fire have been increasing for decades at much higher rates than private sector wages and other public sector wages.  These annual spiralling increases can not be justified or sustained, especially in a no growth community.

Other communities similar to Midland have lower costs for policing and much lower costs for fire protection but are as safe as Midland.  Departmental leaders should be challenged to identify ways to protect Midland at lower cost. Most communities Midland’s size do not have as many full-time firefighters as Midland.  Astonishingly, Midland spends as much per person for fire protection as Toronto does.  Fire is one obvious place to look for cost reductions instead of annual cost increases far above the rate of inflation.

There is a standing joke in Ottawa that whenever the RCMP is asked to reduce spending, the first thing they suggest is cancelling the Musical Ride; the public complains and the Musical Ride money gets put back in the budget. Some may be tempted to use similar tactics.

There are vested interests that do not want to see Midland’s spending reduced.  Some will resist change at all costs.  Others will adopt ‘scare tactics’ that depend on dubious ‘facts’ or imagined ‘risks’.  But there are invariably ways to reduce costs without reducing services in any significant way.  That is what Midland needs right now.


13 Comments on "Update on Midland’s 2013 Operating Budget"

  1. Scare tatics, and dubious facts???? Is that not the pot calling the kettle black? It appears like that is exactly what you have been doing with the creation, and the content of this site. If people were to get their information solely from this website, they would never want move here or start up a business. I would encourage you to focus your time and energy on highlighting the positive things going on in the community and not all the things that foster fear and resentment. Our emergency services are something that we should pride ourselves in instead of targeting them as monsters. They save lives and make a positive difference, do you?

  2. City Council should request a formal tender from the OPP and table it. Then have a referendum. Stay with town police force or do what every other similar municipality in the region is doing and contract to OPP at this cost savings.

  3. Roy Ellis for Midlandcommunity.ca | December 10, 2012 at 8:28 am | Reply

    Thanks for weighing in on the extremely complex debate. If you follow this week’s news you’ll note that our Medical and Teaching professions are being asked to partner in the solution process along with both Fire and Police. Every service is important but no longer can they be funded at historical levels. It’s a new day, not only in Midland but all over the World. While it would be most flattering to think that every prospective new resident and new business views our web site when making decisions to move to Midland, we suspect they might also check with their realtor on local taxes. . Shortly after that realization, one will start to understand why GROWTH is virtually non-existant, and therefore costs at all levels, in all places, must be managed. And yes, in response to your comment regarding us making a positive difference, absolutely. Individually and the collective sum of our members make a huge difference to the well being of our town. No apologies necessary.
    Thanks again for your comments. Please introduce yourself to one of our team at a future Council meeting; we can take a moment and chat about where we might have alignment versus conflict.

  4. Chief Mike Osborne | December 13, 2012 at 10:47 am | Reply

    Thank you for having this discussion. Our community needs open dialogue and deserves to know all of the information. From what I have read you are only getting bits and pieces.

    I recognize that policing is very expensive, everywhere. Every police agency across the world is struggling with the same issues. On Midland’s behalf our team is continuously working to find the most efficient way to offer Police Service which is why we asked to be included in the KPMG study when we were originally left out and why I am personally involved in the Justice on Target initiative to identify cost savings for the judicial system that impacts police overtime, and why I have asked for and received a seat at the International Summit on the Economics of Policing in January.

    I would be happy to take a look at the list of “similar” communities that are policing at a lower cost so I can determine if there is anything they are doing that we are not. However, since 90% of our budget is wages and benefits, and since we have fewer officers (based on population) than many area detachments and all but one Municipal Police Service with a population under 50 000 (stats can 2011), and since the KPMG report identified we were already a lean and efficient operation, I question whether there are savings to be had. I can provide examples of services that saved money by changing their policing model, but they did so because they had more officers than Midland.

    I don’t fear a costing from any police organization since we are already cost competitive and I know other services provide excellent policing, I only fear the loss of local employment and the direct control a community has with its own police service. I welcome anyone to call me directly to provide me new information or discuss the facts as I know them. There are costs that impact our budget that need to be analyzed separately, including the cost of Court Security that is the Town of Midland’s responsibility regardless of what policing model is used. (This will become less and less of an issue as the Province begins to take ownership for the costs.)

    In closing, the proud women and men of the Midland Police Service will continue to listen to our community, watch what is happening around the world, identify best practices and any possible savings, and adapt accordingly. I look forward to discussing this with anyone that wishes to call me or meet with me in person, my office is always open and I am prepared to listen to your suggestions.


    Mike Osborne
    Chief, Midland Police Service
    705 527-6633

    • Chief Osborne had originally claimed that the cost savings estimate in the KPMG draft report was overstated. The only real way to tell is to get a competing bid/tender from the OPP. It’s simply a matter of economies of scale and overall cost effectiveness.

      • Chief Mike Osborne | December 14, 2012 at 4:02 pm | Reply

        Good afternoon

        I always enjoy a good discussion.

        It is not simply a matter of economies of scale and overall cost effectiveness as you might think, otherwise there would not be OPP detachments that pay less and others that pay more than Midland. Police costings are based on calls for service and population which influence the number of officers needed. Since 90% of budgets are wages, unless Midland has more officers than needed, the savings cannot be significant because another police agency would need the same number of officers to answer the calls. This is why I mentioned the Statistics Canada report that indicates we are at the low end for number of officers.

        When one compares OPP detachments that are similar to Midland (removing the cost of court security for an apples to apples comparison), the $750000 originally quoted simply does not hold water.

        Note: Many services that went OPP had a very high number of officers to population. In one example the ratio of officers was much higher than Midland. If we had the same ratio as that service we would have 45 officers instead of the 26 we are operating with. In that case I could see where the savings came from.


        Mike Osborne
        Chief, Midland Police Service

        • Chief Osborne,

          If you are as comfortable as you appear to be that Midland Police service, as it currently is configured, has the *optimal* level of service and number of officers, and admin, then you would surely welcome a tender from the OPP to provide the same level of service.

          In any organization, economies of scale typically result from reducing the ratio of admin to front line workers and can be affected by such things as geography, density of population etc.

          It would cost nothing for the Midland Town Council to request a bid from OPP. It can’t be that difficult for a competing bid to be prepared, given the historical data you would be able to furnish in terms of calls etc.

          So, why not support a request for tender?

  5. I suggest you look at the BOMA municipal report for 2011. There are many good benchmarks and a pretty thorough presentation package. Most municipalities (including Penetanguishene) participate. I’m not sure why Midland doesn’t.

  6. Midlandcommunity.ca | December 16, 2012 at 12:21 pm | Reply

    Hello Mike,
    Thank you for your input and for adding another voice to the discussion of some significant issues facing our town. We agree dialogue and information will help Midland’s citizens and elected representatives deal with the challenges facing us.
    We should clearly say at the outset we recognize the Midland Police Service is a talented and dedicated group of professionals as is our local OPP detachment that shares police work in our broader community.
    We should also add that we are having trouble understanding some of the points concerning the cost competitiveness of the Midland Police Service. Perhaps in your role as Chief you have access to some data we do not have available, but the 2011 Financial Information Reports (FIRs) filed by all Ontario municipalities appear to show the Midland Police Service has high costs compared to a randomly selected group of Ontario communities.
    The following chart shows what we are referring to:

    Municipality Agency Population $ before revenue per person $after revenue per person

    New Tecumseth (Alliston) * OPP 30,234 162 158
    Penetanguishene * OPP 9,354 184 183
    Orillia OPP 30,586 245 239
    Brockton (Walkerton) OPP 8,875 276 249
    Collingwood OPP 19,241 262 259
    Orangeville Local 27,975 299 272
    Port Hope Local 16,214 326 290
    Midland Local 16,295 341 298
    Stratford Local 30,886 313 302
    Belleville Local 49,454 330 316
    Court Security Provided Unless Marked *

    The 2011 FIR data for these municipalities shows Midland as the highest spending in the group at $341 per capita. Net of revenue, Midland still has higher costs than most others including 3 OPP contracts that provide Court Security like Midland does. Net policing costs under those 3 OPP contracts average $249 per person compared to $298 per person in Midland.
    We agree with your general statement that policing is very expensive everywhere. Having said that however, costs do vary and there seem to be some scale efficiencies the OPP enjoys compared to smaller municipal forces. We expect scale efficiencies were one reason encouraging the recent bid for the Penetanguishene police contract.
    But beyond possible scale efficiencies, we hope there is also a real opportunity to think outside the box and create a made-in-Midland solution for our challenges in emergency services.
    Another interesting comment you make that often gets brushed over is your statement that “90% of your budget is wages and benefits”. How annual wage and benefit increases are determined needs a close look with much more weight placed on what the local community can actually afford. Additionally, when looking at compensation, one should look beyond obvious comparators such as other police services and should have a keen eye on wage growth in the private sector. We are all part of a much bigger community and the private sector, particularly small business, is what generates the wealth necessary to pay for public services at the end of the day.
    Perhaps when you take your seat at the International Summit on the Economics of Policing, you can make the point that the concept and practice of interest arbitration in Ontario is seriously flawed and a threat to the sustainability and well-being of the broader community.
    We look forward to talking with you about this or any other ideas for providing good services to the citizens of Midland at affordable prices.

    • Interesting statistics. I haven’t examined them myself in detail, but what jumps out at me is that MPS, in addition to having the highest per capita cost before revenue, has the highest revenue per capita of $43. Here’s your column restated in terms of revenue.

      New Tecumseth (Alliston) * OPP 4
      Penetanguishene * OPP 1
      Orillia OPP 6
      Brockton (Walkerton) OPP 27
      Collingwood OPP 3
      Orangeville Local 27
      Port Hope Local 36
      Midland Local 43
      Stratford Local 11
      Belleville Local 14

      What this suggests to me is that one is more likely to get a ticket when travelling through Midland (not great for visitors and tourists – best to avoid there as a destination), and that investing in more traffic cops to generate revenue is a money losing proposition.

  7. Please take a few minutes to watch this sounds very familiar at the local level


    • Stewart Strathearn for Midlandcommunity.ca | December 18, 2012 at 11:08 am | Reply

      Thanks Mary for the piece featuring Ed Asner. He’s truly a great artist playing a dramatic or comedic role, albeit factual or fictional- you be the judge. We all know Mr. Asner as a great performer and American patriot. Watching Mr. Asner’s piece makes one glad to live in Canada where we enjoy a significant social safety net created by such great men as Tommy Douglas (Unionized Civil Service), John Diefenbaker (1st Bill of Rights) and Lester B. Pearson (National Medicare). Indeed all three, from very different political universes worked to bring us Medicare. We enjoy a banking system we all love to hate but that protected Canadians from the fiscal collapse of which Mr. Asner speaks.

      We trust this debate in Midland is viewed as one on how to ensure a most efficient use of taxpayer’s dollars to provide services through sound financial practices at Town Hall yet always cognizant of the social needs of citizens. It is our contention that taxes increasing at the rate of 100% over 12 years and salaries consuming 70% of Town spending is not sound financial practice and not conducive to Midland’s long-term needs or well being. We also contend that high local taxes hurt the needy in our community most. Were Mr. Asner here, we are pretty sure Mr. Asner would agree despite what his character says in the ‘Man Who Saved Christmas’.

      A very Merry Christmas to Mary and to all.


  8. A very well crafted “look over there!!!!” response from midland community.ca. Have a merry Christmas as well.

    Just curious what midland community would consider a reasonable percentage for salaries to be, If 70% is not acceptable?

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