Deputation- Midland Town Council- Sept 27th/2012

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My name is Roy Ellis and I’m speaking on behalf of Midlandcommmunity.ca.

As you are aware, we are an organized, well informed group, some 600 members strong, from all backgrounds and walks of life, and have been actively involved in community affairs for some two years.

This may well be a watershed year for Midland. The decisions you make as a Council this budget cycle may either move us toward a sustainable future or to future misery and stagnation.

Tonight we offer no new graphs, no new comparators, no slick power point presentations, simply a few reminders of what needs to happen to course correct the good ship Midland, the Town we all love and support.

A reminder of current affairs:

–      Over the last decade Midland residents have endured a local tax increase 4 times the rate of inflation – approximating an 82% increase for the average household

–      KPMG Consulting forecasts a further 34% spending increase over the next 5 years if the current course continues

–      Over the last decade or so, our population growth has virtually stalled at a mere one-half of 1% a year

–      Our population is in large part comprised of seniors, many we know to be on fixed incomes, which do not keep pace with annual cost of living increases

–      We have the second lowest average property values in all of Simcoe County – only Tay Township is lower

–      Our median income per household is the lowest in all of Simcoe County and is 27% below the County average – this speaks directly to our residents “ability to pay”.

The reality and consequence of this is that those in our community with the least ability to pay are being impacted the most by high taxes and will benefit the most from tax reductions.  Reducing taxes will help spark economic development, further assisting the economically disadvantaged.

These are undeniable facts that are well-documented and you are charged with the collective responsibility to course correct and provide the residents of Midland a brighter and sustainable future.

We appreciate that this Council has been in office for some 2 years and this legacy of high taxes is not yours alone. In fact, the first year in office you served up an increase in per household taxes in the 2% range, followed by a more responsible 0.6% increase last year. It should be noted however that a windfall in assessment growth helped achieve these results. Earlier this year, MPAC cautioned you that Midland will realize virtually no new net growth in the foreseeable future.

To your credit, you did alter the course the good ship Midland was on – heading South quickly towards a shipwreck. She is now stalled in Midland Bay orientated East – West and looking for needed direction from you.

To further illustrate your wisdom, you went outside and retained KPMG to give you suggestions, ideas, benchmarking, new insights and aha moments, so you can make informed and necessary decisions about Midland’s future course.

KPMG in turn showed you potential savings of up to $1.5 million without addressing Payroll and related costs which account for about two-thirds of the annual operating budget.

We’re not privy to your closed meeting discussions, but Payroll and related costs is clearly the elephant in the room that nobody is eager to talk about or deal with.

Let me share some additional stats that go directly to why Payroll and related costs are becoming an anchor around our necks and represent so much of today’s operating budget:

Over that same visionless decade I referred to earlier, staffing levels increased a whopping 39%, and town’s Payroll spending per household rose an unconscionable 93%; all this against a backdrop of modest population growth of just 5%.

To put this cost in perspective, each year when we awake on January 1st the town and its residents are saddled with an additional $600,000 in Payroll and related costs based on agreements now in place and past practices that lacked relativity and discipline. This my friends is a cost that compounds annually, sort of like the gift that keeps on giving.

Earlier this year, Councillor Canning suggested Town staff prepare three budget scenarios portraying a 2% spending increase, a 0% or flat budget and a -2% budget. Council at large supported Councillor Canning’s motion which we find both necessary and refreshing. This modelling exercise should allay the fear-mongering that often accompanies a directive calling for restraint and a new way of thinking.

KPMG later advised that achieving the target of a -2% decrease in town spending would require a reduction of $1.1 million in overall spending from the previous year.

Now for the encouraging news. KPMG through its ongoing review of Midland’s budget, have identified up to $1.5 million in potential savings; the caveat of course is one needs to have the conviction to execute on the findings.

These identified savings coupled with a hiring freeze, encouraging early retirements and modest or no wage increases for Council and staff will certainly take us where we need to go in the short term. This immediate intervention will allow for a longer term strategy to be put in place that contemplates and demands different service delivery models likely including reassignments of responsibilities and staff re-deployment or reductions through various means.

In summary, we acknowledge you are more likely to achieve sustainability over the long haul by growing rather than by cutting back. However, it’s not an either/or situation. If we are ever to grow at the rate necessary to support our current and projected infrastructure costs, the right conditions must first exist and that means getting our levels of local taxation under control. We remain fortunate that our commercial and industrial tax base is still relatively healthy compared to benchmarked communities. However, should this change – the business climate worsen with a further exodus of manufacturing and retail jobs, that gift can become a curse as more of the tax burden shifts on to the backs of residents.

With Midland’s beauty and what KPMG called ‘Cadillac services’ on several occasions, one might think people should be lining up to live here, buying up new homes and swelling our population base.

Sadly, they’re not. This is our new reality. So the notion “if you build it, they will come” was something we only saw in the movies, but never in reality. Once again, we suggest it’s time to change the way we think about attracting new residents and new development.

In closing, Midlandcommunity.ca appreciates this opportunity to present to Council.  We truly recognize that this is difficult and painful work. Nevertheless, it is work that must be done in order to steer the good ship Midland Northbound once again and back on the right course.

Thank you.

Roy Ellis on behalf of MidlandCommunity.ca

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