| Apr 07, 2005

Feature article,April 7, 2005

Feature article April 7, 2005

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Province announces new plan for transfers to Municipalities

by Jeff Green

Its a case of good news today, but suspicion and nervousness for the future as rural municipalities evaluate a funding announcement last week by the Ontario Ministry of Finance.

The long-standing question of whether the Province would live up to funding commitments made for the 2003 and 2004 fiscal year has been resolved, and this was welcome news for municipal politicians.

In South Frontenac, there will be a one-time payment of $393,000 for 2003 and 2004 costs; in Central Frontenac the total is $357,000, but in North Frontenac it is only $35,000. Addington Highlands will receive $51,000.

Ensuring that the Province paid the outstanding bills was both a matter of principle and of course an important financial issue for us, said Central Frontenac Mayor and County of Frontenac Warden Bill MacDonald.


Still, MacDonald will recommend that Central Frontenac Council keeps the new money in reserve until they determine what the medium to long term implications of a new funding formula are.

Under a new funding transfer program, called the Ontario Municipal Partnership Fund, announced the same day, the townships will receive a significant increase in 2005.

The old program, called the Community Reinvestment Fund, was set up to compensate municipalities for costs incurred to provide services that had been downloaded to them from the Province, such as social housing, Ontario Works, land ambulance, and policing.

The Ontario Municipal Partnership Fund is different. It contains four components, two of them relating directly to downloaded services, one which relates to the limited tax base in rural municipalities, and the fourth which gives grants for northern and rural communities in recognition of their unique challenges according to a Ministry of Finance Media Release.

Working through the documentation provided by the government for each township has proven difficult for municipal officials in the few days since the new formula was announced and figures were provided.

Township of South Frontenac Treasurer Debbie Bracken said The problem is there are still a lot of grey areas in the new formula. It would have been nice if they had sat down with us and explained what they were planning to do before presenting numbers to us.

For 2005, the municipalities will receive an increase in funding that amounts to about $80 per household more than they received last year.

In South Frontenac, that means $1.1 million (an increase of $752,000 over what was received last year); in Central Frontenac $1.34 million (an increase of $311,000); in North Frontenac $350,000 (an increase of 262,000); and in Addington Highlands $969,000 (an increase of $218,000).

This looks like a boon for municipal coffers, but municipal officials are concerned with whats missing from the new formula.

Bob Sweet, the chair of the Eastern Ontario Wardens Caucus, a group that lobbied hard for changes, notes, There is no recognition of the spiralling costs of land ambulance, or the funding pressures the Counties face with their thousands of social housing units, nor any support for our decaying roads and bridges in the new arrangement.

Bill MacDonald noted that the arrangement as far as policing is concerned is much more expensive for municipalities than it was supposed to be under the old formula, although the Province never did live up to their end of that bargain.

Under the old model, the cost of policing to municipalities was supposed to be capped at $90 per household, although MacDonald said, In reality Central Frontenac was paying more like $130 per household.

The new formula calls for municipalities to pay all costs up to $150 per household, and poorer rural municipalities will be rebated for 50% of the costs over that figure.

The documentation that accompanied the announcement included wildly different figures for the costs of Policing in different municipalities. For instance, the costs of policing in Addington Highlands is listed at $261 per household, Central Frontenac at $207, North Frontenac at $69, and South Frontenac at $179.

Addington Highlands and South Frontenac have policing contracts, so it is hard to compare their costs with those in Central and North Frontenac, but Central and North Frontenac have identical arrangements and are served by the same detachment, so one township paying three times what the other is paying on a per capita basis is hard to understand.

In fact, the figures used in the Allocation Notice that has been sent out to townships didnt add up for South Frontenac Treasurer I wasted a couple of hours trying to make sense of it, and then decided to wait until they organized some technical briefings, she said, pointing out, for example, that the number of households in South Frontenac are pegged in the document at 9,193 when the current figures for 2005 are over 9,300.

All of these unknowns have led Bill MacDonald to say he wont recommend including any of this money in the 2005 budget deliberations of Central Frontenac.

For one thing, we havent seen any money yet. I would recommend we be very cautious, because we have no guarantee whats going to happen next year. MacDonald summed up his attitude towards the provincial announcement by saying, We havent chewed this long enough to know what the taste is.

Municipal politicians, and municipal treasurers, will be looking to filling in some of the gaps in their understanding of the Ontario Municipal Partnership Fund before they begin either spending the money or lowering taxes.

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