Duane Hicks
“The economic bubble has burst and denying that today is not an option.”
That was the message Allan T. Bedard, with the Senior Retirees Against Pension & Elder Abuse, relayed Monday night as he delivered a report asking town council to place a two-year moratorium on any tax or user fee increases, as well as endorse other measures.
With the loss of several hundred jobs at the local Resolute Forest Products mill, and more than 750 pensions “in real doubt of survival” and not indexed to any cost-of-living clause, said Bedard, local economic activity is regressing.
The loss of $1.8 million in tax dollars due to the reassessment of the mill property here is a bitter pill to swallow amongst the majority of ratepayers who, at this time, can least afford to pick up this tax loss being downloaded onto them, Bedard added.
He noted any tax increase would hurt the many on fixed incomes or with low incomes, who have to choose between paying for food, heat, lights, or taxes.
He also said the new assessment done by the Municipal Property Assessment Corp. (MPAC), and mailed out to homeowners, already indicates district residents will be seeing their taxes increase anywhere from 2.72-6.34 percent even before the town raises them by a dime.
With a declining job base, no new jobs in sight, and homeowners of working age pulling up stakes and leaving town for greener pastures, thus increasing the strain on the dwindling tax base, Bedard said it’s time to put on the brakes and create a think-tank that will co-ordinate a healthy strategy for the future.
He added council should hold off on new projects like the proposed Huffman subdivision, only spend on emergency projects, and don’t borrow money from the bank because of the interest rates.
If money is needed, the town should borrow from its reserves and pay itself back with interest.
Bedard also said council should rescind the most recent 3.5 percent water and sewer rate increases, or at least put them on hold for now.
Another recommendation was to develop a Community Economic Planning Group to study and recommend positive strategies for economic stabilization and revitalization.
This would consist of a cross-section of community sectors for the good of Fort Frances and Rainy River District.
Similarly, the town could work with district municipal councils for a common goal of economic stabilization and revitalization.
Bedard also recommended council approach both the federal and provincial governments and ask for their economic managers to come here.
“They’ve done this before,” he noted. “They’ve come in and they’ve assisted areas that were in hardship, depressed areas, and they’ve done at the cost of the federal and provincial governments.”
The economic managers provide open strategies to remove red tape, as well as help access government assistance and funding.
Bedard stressed council has to understand the plight of the residents and local businesses, along with the political consequences of any vote to increase taxes in this difficult time.
“Any tax or user fee increase at this time is counter-intuitive to the reality of our situation,” he said.
Perry responds
Coun. Ken Perry responded to Bedard’s presentation to better explain the town’s current financial situation, as well as show that council and administration have been working diligently to cut costs.
Coun. Perry told Bedard that every department and executive committee reviewed the Fort Frances Seniors Advisory Committee’s request regarding Huffman School, and determined the cost to remediate the vacant building would be in excess of $500,000.
Furthermore, the public school board told the town that the building would cost more than $200,000 a year to run (i.e., water, sewer, hydro, gas, taxes, and insurance).
“At $700,000 this year, you’re looking at a seven percent tax increase just for that,” Coun. Perry said. “And today, you’re asking us to increase taxes zero [percent].
“They’re at different ends of the scale—we can’t do it,” he stressed.
“And we can’t go forward, year after year, and spend $200,000 a year looking after the Huffman building as a Sister Kennedy Centre.”
Coun. Perry said he also is confounded by Bedard’s comments regarding the Resolute tax agreement with the town—somehow suggesting this was a bad deal for local taxpayers.
“While we were dealing with Resolute, the Assessment Review Board [ARB], with no help from MPAC, put a 70 percent reduction in taxes on the heads of Dryden and Espanola. . . .
“The Town of Elk Lake saw a 50 percent reduction for their sawmill in 2004, and are now arguing a further 75 percent reduction since 2005,” Coun. Perry added.
“They are a town of 500 people and the mill there used to remit 51 percent of their tax base.
“In these three towns, no agreement was reached prior to going before the ARB,” he noted.
“Our agreement with our mill equates to a 25 percent decrease and the deal ended Dec. 31, 2012,” Coun. Perry continued.
“We have no idea yet what will happen moving forward, but we can only hope and try and prepare.
“Resolute was asking for 60 percent reduction,” he noted. “It’s our fear that if they had gone forward with that, ARB would have given to them like they did to the other towns and municipalities.”
Coun. Perry said the town’s focus in the 2013 budget has been on no new spending.
“New spending is not the issue. Maintaining what we have is a challenge,” he explained, adding that wages and benefits, many of which are out of council’s control, are rising.
For example, at the Rainy River District Social Services Administration Board, staff will be getting a two percent wage increase and a 27 percent benefit increase.
“Uncontrollable. We can’t do anything abut it but pay it,” Coun. Perry lamented.
Council also has been told that next year, the OPP benefit cost will increase 8.5 percent. And when the wage freeze is lifted by the province, the OPP will be the highest-paid police force in the province.
If the Rainy River District School Board needs an increase, it simply will notify the town and increase taxes. If firefighters go into arbitration, the town will be told what their remuneration will be.
Town union employees are entitled to a wage increase this year, and their benefit package also may increase, added Coun. Perry, also noting hydro and fuel costs won’t be going down anytime soon.
What’s more, the town’s assessment value has increased by almost $8 million while the assessment of the unorganized territories in the district has decreased by more than $16 million.
“This drastically increases our contribution to the DSSAB board on a go-forward basis because we’re just based on assessment, it’s nothing to do with population,” Coun. Perry explained.
But he stressed “there is a partial way out,” and council and administration are working on it.
Administration, for instance, has reduced staffing requirements throughout the town since the new year.
“Further cuts may be made. We could drastically reduce costs by slashing services,” Coun. Perry warned.
“You can’t slash water and sewer, you can’t slash the ability to look after our roads and streets and sidewalks and everything else. So what’s the answer? It’s services.
“We need to look at it,” he stressed. “Not saying where going to do anything, but we need to look at it.”
“Are there any other answers?” asked Coun. Perry. “We could close the Sister Kennedy Centre, have it open three days a week. That would be a good deal, cost us less money.
“We could shut the library down maybe three days a week. Is that what we want to do?
“If we want cut further, that’s what we’ll have to do,” he admitted. “But nobody’s saying we want to.”
Coun. Andrew Hallikas, meanwhile, thanked Bedard for the presentation and the work that went into it, regardless of whether council agrees with it.
“I think the more ideas we have in these tough times, the better,” he reasoned.
“It takes courage to come before council and do a presentation, and I am glad that come,” Coun. Hallikas added.
“You well-represented the Sister Kennedy folks.”
