The following comments from the Muskoka Ratepayers were sent to Township Council after the release of draft 1 of the Township budget.
- The Park’s Department Capital budget includes $420,000 for the replacement of the Portage Street dock which has a relatively low frequency of use. It is OK to budget this project but much public consultation is needed to justify the expense and to seek possible alternatives.
- The total Community Centre Operating Budget is $548,700. The Capital Plan budget for Community Centres calls for the Township to spend an average of $175,000 per year. However, there is very little recreational programing provided in these 13 buildings. There is only $31,300 in non-tax revenue earned at these facilities. We suggest that a committee be formed to review and make recommendations as to the future of community centres so that the taxpayers benefit more fully from this major expense. Perhaps interested community groups should be encouraged to “adopt” their community centre and raise funds to support the operation.
- Our arenas are another expensive part of the budget. The Capital budget averages over $600,000 per year for the 2 arenas. We spend an additional $741,300 annually in operating costs. There is only about $150,000 in annual revenue to offset these expenses. Perhaps the Township could form a committee similar to the one for community centres with a similar mandate.
- Insurance costs budgeted under the Clerk’s Department shows a major increase yet the only explanation is that it has been underbudgeted since 2018. The taxpayer deserves a full explanation as to why insurance costs are rising so rapidly. Is the Township buying more insurance than we need? What is the breakdown in what is covered under our policies?
2020 Budget 2019 Actual 2018 Actual 2017 Actual $836,600 $788,600 $619,523 $581,230
- Legal Costs budgeted in the Clerks Department show a major increase with no explanation. An explanation should be provided as to why legal costs are budgeted to be so high in 2020 compared to previous years.
2020 Budget 2019 Actual 2018 Actual 2017 Actual $294,100 $128,100 $155,520 $124,008
- By-Law Enforcement could be managed as a revenue source instead of being a major expense. Income from fines was only $3,535 in 2019.
- The Health Hub continues to be shown as an expense. Compensating rental income should be shown somewhere in the budget. The original intent was that this facility would at worst operate at a break-even point.
- The Planning Department expense budget gives some insights into the costs associated with challenges brought to the Township by unanticipated development activities. Recently we have experienced an unfortunate series of costly Council decisions related to projects such as Swift River, Legacy, and Minett resort development, and others. Council did respond to the concerns raised by citizens but this has been costly. In these cases, the hearings have resulted in major legal expenditures as well as absorbing large amounts of Planning Department staff time (and perhaps in greater insurance premiums as well). In the end, the outcomes of all of these proposals has been for them to proceed. Council must be more cognizant of the financial implications of their decisions. They must weigh the probable outcome of possible appeals before a decision is made. Here are excerpts from the Planning Department budget.
2020 Budget 2019 Actual 2018 Actual 2017 Actual Consultant Fees – LPAT Hearings $30,000 $23,045 $0 $0 Legal – LPAT Hearings $70,000 $42,947 $79,531 $20,438 Minett Joint Steering Committee $40,000 $95,574 $19,666 $0 Total $140,000 $161,566 $99,197 $20,438
- It is not clear why comparisons are made between the 2019 “Budget” and the 2020 Budget (apples to oranges) rather than comparing the 2019 “Actual” with the 2020 Budget (apples to apples).
- The practice in previous Township budgets has been to include a 5% contribution to reserve. The 2020 budget seems to have increased the percentage and allocated it among several of the departments without an explanation as to the rational for this treatment. We suggest that Departmental budgets be shown with a sub total of actual and planned expenses which excludes reserves. That way a more meaningful comparison can easily be made by the reader. The addition to reserves could be a separate line item shown in the Capital budget section rather than allocating it to separate Departments.
- Table 3 in the Township Budget (draft 1) is meant to highlight “contributing factors” in departmental budget fluctuations between 2019 and 2020. However, the figures it highlights compare the 2019 budget with 2020 budget. As is mentioned in paragraph 9 of our earlier comments, it may be an interesting comparison but it doesn’t have much meaning. Throughout the budget, each department also makes comments comparing this year’s budget with last year’s budget. A comparison between 2019 projected actuals and 2020 budgets would be more meaningful. In most years the budget is drafted before the year end actuals are available. In these cases, it would be of more value to compare the budget number with a forecast of what the year-end number will be.
The attached spreadsheet shows a budget recap which makes the comparison mentioned above. In this comparison we have used the figures given in each department’s budget and assumed that the numbers given as 2019 actuals are correct. We have highlighted in pink the departmental percentage changes that are higher than the overall average. Some of these departments may deserve further scrutiny for potential savings or for more lucid explanations. The changes highlighted in yellow call attention to departments where the reserves make a particularly significant impact. These departments should also be looked at carefully. Reserves can have the effect of distorting year to year comparisons. Reserves can also make analyzing a budget more difficult than it needs to be both for outsiders as well as non-accountant councillors and employees. (note that a downloadable copy of this spreadsheet in pdf format is available by clicking – Budget Spreadsheet