When any department in Centre Wellington wants to complete a special project, that project goes through the treasury department.
For example, the recommendation on July 7 to repave South River Road this summer using a provincial grant would have come through the Public Works Department in the old days. Instead, it was Treasurer Wes Snarr who filed the report and made the presentation, although he is quick to point out that his department consults constantly with all the others.
A similar system is in place at the Wellington County level of government, too, and for a simple reason. What government does costs money, and the Treasurer’s department needs to be aware of where the money is going.
There is much work for Treasury and other departments in Centre Wellington Township, and all of them are going through a strategic planning exercise. The Wellington Advertiser is doing a series of interviews with all department heads to get a sense of where each one foresees the department over the next ten years. Council is completing the exercise, and is designing the strategic plans so they can be reviewed every five years and be changed if that is required.
“When a project comes to council, they need to know how the project will be funded,” Snarr said.
The township has been very successful over the past several years in obtaining grants from the provincial and federal governments, but, as Snarr noted, “Every grant has a different twist to it – different criteria. Some are competitive. Some are merit based.”
And, he said, ‘The application process here is a team effort. We like to think our grant applications are of a high calibre.”
All municipalities are hoping for a good application. It can be the difference between building a sewage treatment plant or water tower, and stagnant growth until money is available from elsewhere.
The finance department is responsible for maintaining all of the townships cash resources in a fiscally responsible manner. It provides advice and support to all the departments. For example, information technology is a part of the finance department.
There is a lot of money to look after, although councillors, when debating budgets, invariably find there is not enough cash to do all that they want to accomplish. In 2008, the operating budget in Centre Wellington is $24-million, and the capital budget (the one that is used for paving roads, building bridges, and purchasing equipment, for example) is $11.7-million.
Simply collecting taxes has been a growing chore, as Snarr noted. In 1999, the year of amalgamation, the township sent out 7,600 tax bills for properties. This year, there were 9,310, an increase of 22.5% over the past decade.
Last year, the total the finance department billed ratepayers was $34.1-million. Of that, $7.9-million was collected for the township, $17.7-million for Wellington County, and another $8.5-million for education.
Snarr said working with the other departments is important. One of the budget sections deals with equipment replacement. That means every vehicle from, for example, Public Works, has a date for replacement. For snow plows, the expected life is ten years. for pick-up trucks, it is six to eight years. But for the Fire Department, it can run 15 to 20 years.
There are 11 snowplows owned by the township, with single axles used in urban centres for their manoeuvrability, and double axles in the rural areas.
When it comes time to doing budget, Snarr noted, “There’s quite a bit of work done at the staff level.” That work is provided to council, which then decides what to spend, and what to reject.
Besides placing all the audited statements for the township on the website where people can look at it, the department is forced by the province to provide financial information returns, and, finally, a newer and bigger one, Municipal Performance Measures.
Snarr said that last one can depend on a number of factors, including if a council is pro-active, its financial capability, and its rate of growth. He noted that comparing municipalities by their size or population no longer works in that case. “Municipal comparisons aren’t really meaningful. It depends more on the direction it is going in.”
One of the key parts of the strategic plan for the finance department is to “improve its procurement practices in a legal framework. The goal is cost containment,” he said.
Snarr explained that the new Municipal Act of 2002 forced municipalities to have a procurement policy in place by 2005, and Centre Wellington did that on Jan. 1 of that year.
The township buys hundreds of items every year, ranging from trucks to chemicals for its water supply, to pencils, papers, and computers.
Snarr said the township is part of the Guelph Co-operative, and a member of his staff is the co-chairman of that buying group. Guelph and Wellington County and the two local school boards are also part of that buying group, and the theory is they have more purchasing power and can get better deals buying jointly than they can alone.
“The marketplace has responded favourably to our bid documents and bid processes,” Snarr added. “It ensures our ratepayers are receiving the best value for the dollars spent.”
One issue that council has had to deal with is that of local preference over bids from outsiders. Not long ago, councils used to give preference to local suppliers. No longer. All compete on an equal basis, and, generally, the lowest bid to supply a good or service wins.
“If there’s local preference, what incentive is there for a local supplier to provide the best price?” is how Snarr sees it. “In procurement, you have to follow an open and transparent process.” He noted that all bids to supply goods and services are posted on township websites, and suppliers are free to make an offer.
“The township has saved significantly since implementing its purchase policy,” Snarr said.
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Government demands
The provincial government is forcing municipalities to do more accounting of what they own. The township is being forced to implement fixed asset accounting, which means it has to list everything it owns, what its value is, what its maintenance and replacement costs are. As well, all Canadian municipalities must record and report all historical costs of property, accumulated, amortized, and its net book value.
“The challenge right now is inventory,” Snarr said, noting that it includes all roads, bridges, underground pipes, office equipment, and so on. His department must determine those historic costs and remaining useful life.
Snarr said as the township builds and purchases new properties, the historic costs will be available immediately, but for everything it owns already, “In most cases, the records don’t exist.”
He said the goal is to find a substitute for those historic costs, and use those figures until everything is caught up. The department started the work a year ago, and it must be ready for the 2009 budget. Those talks start this fall.
He also noted that, historically, the cost of, say, a works garage, would be on the municipality’s books until it was paid off, and then treated as an expense. “The historic costs were not captured, on balance,” he said.
The township is also implementing new software to handle its asset management. It will document the value of, say, the shell of a building, the roof value, and the cost of air conditioning, heating, and ventilation. The finance department will be expected to track what is done on maintenance, and when it needs to be replaced.
Snarr said that will be better than “someone carrying [the information] in his head.”
He said a great deal of that work will be completed by the end of this year.
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Big challenge
Snarr said one major challenge for Centre Wellington and his department is managing the forecast growth that is coming as a result of the Places to Grow legislation, which puts Centre Wellington right in the path of developers leaping outside the Greater Toronto Area.
He said the township has been working with developers to make sure that current residents do not have to pay for growth related costs. “At the same time, they have to be fair to the developer.”
He said development charges will be an important factor, but so is the timing for spending what is collected.
He noted, too, there are soft service issues versus hard services. For example, sewage plants have to be completed before growth, but things like new arenas will be built as growth forces the demand for them. Snarr said the tricky part will be assigning costs for the upgrade of a road that has always been there, and determining how much growth contributes to its need for repairs.
He also noted that the slots cash has become a major bonus for the municipality. The township is now receiving $1.6-million per year for hosting the slots at the Grand River Raceway, and that appears to be climbing every year. He noted that a one per cent increase in taxes nets the township $75,000, and said, “Do the math.”
As for grants, he said the township will seek as many as it can get.
“We live in hope.”
He stated that in 2007, the township spent $3.4-million and had 28 bids to supply goods and services. He said the year the sportsplex was built in Fergus, that figure was over $13-million.
As for a sports facility paying for itself, he noted, “I don’t think that any municipality has a sports facility that’s self-funding.”
Government versus business
Snarr noted that a great many people believe that a government should be run just like a business is run, but he sees that as being impractical.
“The accountability model in business is you spend money to make money. The ultimate test is the bottom line.”
But, in the public sector, the funds that are raised from ratepayers are used to provide services, “so, the issue is what services are to be provided, at what level that the electorate wishes – and that’s a political issue.
Snarr said the township provides 90 different services. The public support ones include transportation, health and environment, community and public safety, economic development, community development, recreation, and human rights.
There are 59 of those in Centre Wellington. They include cab driver licencing, septic tank permissions, disaster recovery planning and coordination, business attraction support, bylaw enforcement, community centre access and maintenance, and supplying marriage certificates. Each of those services fall under one of the main categories, and there are lots of services under each category.
The internal services do not have separate headings, but they include policy and bylaw development, accounting, risk management, human resource planning and monitoring, employee training and development, facility management, and information technology planning and monitoring.
There are 31 of those types of services in all in the internal support section.
“Compare that to the private sector with three product lines,” Snarr said. “There’s a complexity to municipal operations that isn’t always apparent.”
