Much noise, little light as Pelham finance questions deferred again

By JIM PITT
Special to the Voice

We here in Niagara are blessed with four levels of government taxing us for various services. The Federal government collects HST and income taxes as well as a myriad of fees (taxes by another name) for everything from passports to duties. The provincial government also collects a portion of the HST as well as income tax and another myriad of fees, from licences to land transfer taxes. The regional government collects a portion, approximately 48%, of our property taxes for various services as well, from police to infrastructure. The Town collects approximately 36% of property taxes for a long list of items from development fees to building permits.

The province also collects a portion of our property taxes for education costs. There are gasoline taxes, booze taxes, tobacco taxes, fishing licences, permit fees and, well, you get the idea. We pay a lot of governments a lot of taxes.

Each of these governments suffers from the same affliction. They all spend more than they take in.

When a level of government seems to be on the verge of over-taxing its citizens, there is little we can do except wait for the next election and vote for politicians with a better focus on taxpayers’ ability to pay.

One of the questions asked at last week’s Regional Audit Committee meeting concerning the Town’s levels of debt was of particular interest. Councillor David Barrick asked the Town of Pelham if it had tax affordability guidelines in place. We do not.

The meeting was rather long and tedious, as these types of meetings usually are. The overall concern is whether the Town of Pelham’s debt load could have a negative impact on the Region’s credit rating. It’s the Region that has co-signed the Town’s loan and it has every right to question its borrower’s ability to pay. If you have dealt with a bank you know that it can be very demanding—after all it’s the bank’s skin in the game.

Councillor Maves seemed to ask the most pointed questions concerning the Town’s finances.

When Pelham CAO Darren Ottaway was asked if the Town would have the highest per capita debt in the Region, he said that we wouldn’t.

Mr. Maves later pointed out, after doing some quick calculations, that Welland, the next most indebted municipality in the Region after Pelham, has a per capita debt of $788.00. Pelham presently has a per capita debt of $1,162 for 2016 which will climb to $2,117 this year, he said. Councillor Maves was told that the Town was sitting on $15 million worth of land to sell, not the $12 million we had been told about since March 2016.

No information was provided other than the land seemed to be worth $3 million more this year than last year.

The questioning around a $3.6 million land deal the Town made last fall was rather confusing.

When asked by Councillor Maves the price per acre and the assessed value, Mr. Ottaway did not have those numbers available. These numbers were also not made available in the 300-plus page binder the Town provided to the Committee this past March. Councillor Maves requested this information, saying that this $3.6 million was a debt the Town had and that was not made clear in 2016, when the Town sought Regional approval for a $36 million dollar loan guarantee. He said he felt that he had been duped by this and considered the $3.6 million a debt that the Town had not reported. Councillor Maves then requested to see the land appraisal and peer review to determine the cost per acre of this $3.6 million purchase. Issues related to trading land for development credits were equally confusing. Councillor Maves mentioned that he had not heard of this practice and neither had any of the developers he had polled. Mr Ottaway said that this practice, although seemingly controversial, was allowed under the law. Questions regarding something called the ARL were also enlightening.

The ARL, or Annual Repayment Limit, is an amount set by the province to limit the amount of debt a municipality can assume. This limits how much a municipality may devote, annually, in principal and interest payments, to long term debt and for payments of other long-term financial obligations. It is set at 25% of certain annual revenues and receipts, less most ongoing long term debt service costs.

This money is taken from property taxes, user fees, etc. Development charges are not included.

The limit goes like this. The Town has revenues of $16,260,814. 24% of the net is $4,065,204. Subtract debt charges and the Town has to limit debt repayment to $3,013,683, or 25%.

Councillor Maves pointed out that although most municipalities in the region have kept this number below 10%, Pelham has gone from 6.8% on $4 million of debt to 18% on $21 million of debt.

He also pointed out that if the total $36 million was borrowed, then the amount would reach the maximum of 25%. The Mayor asserted that Pelham could assume another $36 million of debt on top of the original $36 million. Councillor Maves also mentioned that Pelham’s final financial statements for 2016 had just arrived the morning of the committee’s meeting.

After watching this meeting for a while I was reminded of a television drama in which one character is in a state of denial concerning some destructive behaviour. Friends, family and colleagues sit this character down for an intervention. The intervention is resented by the character and harsh words are spoken, along with many denials that a problem exists. Councillor Maves’ questions seemed to point to a problem. The Town’s responses were in keeping with a character in denial.

A motion was presented and the wording agreed that would see Pelham and the other municipalities in Niagara follow tax affordability guidelines. These guidelines would require all municipalities to hold an evening public meeting to ensure that their operating levy remains below 25% compounded for the 2015-18 term, and that their annual repayment does not increase above 20%. It sounds very similar to the provincial regulation described above.

The questions that need to be answered will have to wait until September as this matter was deferred again by a vote of 5 to 3. The Mayor stated to the media that there is a dark cloud over Pelham and that Pelham is being “bullied” by certain councillors. As for a dark cloud, well it was a rainy spring, but it was sunny and bright on the day of the Audit Committee meeting. And summer—and some long overdue, penetrating sunshine—arrived with the solstice at 12:24 this morning. The days, and days in office, get shorter from here. As for bullying, everyone seemed calm and generally respectful of the process.

From Charette to Visioning: On June 26 – 27, the Town will be holding a “visioning” exercise for those of you interested in the fate of the Haist Street Arena lands. Details are posted on the Town’s website.

A company called Planning Partnerships has been hired to organize and run what can only be called a very prescribed series of input sessions for the townsfolk. This company also did the design work for downtown Fenwick and East Fonthill.

Virtually every event requires pre-registering on your part.

Monday kicks off this “visioning” with 20-minute one-on-one sessions, either personally or by phone between 9 AM and 4 PM. There will be small group design sessions, a meet and greet with the team and a “walk shop” to see the site conditions. From 3 PM to 5 PM and 7 PM to 9 PM on Tuesday, design sessions will be held with Planning Partnership to prepare a concept.

Roving Information sessions will occur in early July to share the results.

A public workshop will be held in late July to review the emergent and preferred plan.

A Town Council meeting in September will view the final presentation.

So if you feel like being led around by your nose in this cynical ploy to avoid a general meeting with the residents of the Town, then this is the place for you. But don’t forget, you must pre-register. Bring crayons.

Notice that the decisions are made in July. Happy summer holidays. This will be following the first “visioning” workshop for the Fenwick Secondary plan on June 22 at 6:30-9:00 PM at Fenwick Fire Station.

Two major Town meetings inside of a week. My goodness the Town is in a hurry to move forward.

There’s nothing like a $36 million dollar-plus project to pay for to get those revenue streams flowing.

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