Deficits and Levy vs. Development Charge Debt

Since that’s a lot of talk about debt lately, I thought I’d write about it here.

While the Provincial and Federal governments and businesses can run deficits, Towns and Cities cannot.

Deficits occur when a Federal or Provincial government spends more on their services and projects during their fiscal year than their revenue for that year. Adding up this overspending is called an accumulated deficit which becomes Federal / Provincial debt. And, that Federal and Provincial debt includes both operating costs (program spending) and capital expenditures.

Sometimes businesses can do the same. A small business could continue to operate for a while, accumulating their weekly loses into a relatively large deficit. This type of spending can last as long as their directors or creditors allow.

On the other hand, Towns and Cities must run balanced books each year. We cannot budget for a deficit nor a surplus, nor can we accumulate deficits.

So, how do we mitigate unexpected expenses or pay for large capital projects? With reserves and municipal debt (called debentures).

Sometimes we accumulate specific funds over a few years in a reserve to help pay for something in a future year. For example, we might set $100,000 aside for a few years so that we can buy a $400,000 fire truck in year four. Or, we established a snow clearing reserve to cover excess operating costs for winter control methods (if required).

For multi-million-dollar community assets, however, it might not make sense to save up for decades in advance.

For example, does it make sense to pre-charge residents for a number of years to save up for a multi-million-dollar water project when the asset will be used over 70 years? Why should people who move or pass away prior to a project’s construction pre-pay for an entire project? Wouldn’t it be better to allow folks benefitting from the project pay as they use it?

One could make the same case for a 50-year asset like a community centre or a 25-year asset like a downtown redevelopment. It’s often in these types of cases that “smart debt” – a debenture period of less than the life of the asset – makes sense. And, since municipal debentures lock in the interest and principal payments for the entire life of the loan, they provide certainty on pay back amounts. Once approved, interest rate hikes or changes do not impact these locked-in debenture payments.

And, many find this approach beneficial during periods of low interest rates and infrastructure grants from other Governments. For example, a portion of Pelham's debt includes our share of Downtown Fonthill’s revitalization and Fire Station #2 construction after taking advantage of more than $4.1 million of Federal and Provincial stimulus funding. If we didn't use this type of smart debt to pay for those projects, we would have left that $4.1 million (representing 66% of the project costs!) on the table for another community to use. We used the same approach for Haist Street reconstruction and for our nine new, fully accessible playgrounds.

Finally, much of the Town's long term debt is to help support new development and is, therefore, not funded by existing residents and businesses.

You may know that Development Charges are applied on new developments – from new homes to new commercial buildings – to help pay for the facilities and capital projects that are required to support that new development. For example, if a road needs to be widened, a new water line installed (like on Rice Road), a Fire Hall expanded, or a new trail system built, that new development needs to pay for those new items. Development Charges allows “growth to pay for growth.” And, that’s good news for current residents and businesses.

But, sometimes those facilities or improvements need to be built or installed ahead of the growth – like that new water or sewer line or new Fire Station – to help serve and stimulate the growth. In fact, this approach was encouraged by the Niagara Homebuilder's Association and others at the Region this month as Regional Council considered a new Development Charge bylaw. In these cases, the Town might build the project but add the debt to the Development Charges account; in this case, those Development Charges pay for both debt interest and principal and the new development projects get build ahead of time.

Since we have been preparing for growth for a while, more than 55% of Pelham’s long-term debt is for these Development-Charge-funded projects. (And, these are some of these type of DC-funded debt projects in the Region's new Development Charges bylaw too.) To be clear: more than one-half of our long-term debt will not be paid back by existing residents and tax-payers, but, rather, by new development.

Pelham Council and I continue to ensure that we only minimally impact you and other property tax-payers while we continue to improve our infrastructure and increase the quality of life in our Town.

You may contact Mayor Dave at mayordave@pelham.ca or read past columns at www.pelhammayordave.blogspot.ca.

Thanks for Another Amazing Summerfest!

On behalf of Council, thank you to the 2017 Summerfest Committee, Town Staff, service club and other volunteers for your hard-work and dedication and to the many generous sponsors who made this year’s four-day Summerfest an amazing success – with the highest attendance yet!

Pelham Summerfest 2017 (Photo: Cameron Young)

First, I greatly appreciate the work of the Summerfest Committee, including John Wink, Chair; Councillor Gary Accursi; Bill Gibson, Active Transportation Committee rep; Candy Ashby, Pelham Business Association rep; Matthew Leask and Michelle Stewart, Pelham residents; and Sofia Labricciosa and Mackenna Belding, Mayor’s Youth Advisory Council reps! The committee met for since last Fall to plan and finalize every detail and they worked very, very hard all weekend long to ensure a successful festival. Thank you very much!

Second, thanks so much to Town Staff! Thanks to Vickie van Ravenswaay, Sally Jaeger, Jodi Hendriks and other staff who helped organize the overall event and worked with the Committee to ensure success. I also appreciate the many Town staff who volunteered in one capacity or another – from setting up, to serving beverages, to cleaning up – throughout the four days; thanks for giving your time to our community. And, thanks to the (mainly) Public Works staff who worked during the Festival on logistics, garbage and recycling duty, and ensured the safety of participants and all the major clean-up!

Third, thanks to the very many members of the Town’s service clubs – including the Fonthill & District Kinsmen and Kinettes Clubs, the Fonthill Lions and Lioness Clubs, Fenwick Lions, and the Fonthill Rotary Club – for helping serve beverages and greeting patrons. We couldn’t have done it without you!

Fourth, thanks to the other members of the community who also volunteered! Thanks to members of the Pelham Fire Service, the Pelham Active Transportation Committee, St. John’s Ambulance, members of Town Council, and the many, many other community volunteers.

Fifth, thank you to the many Sponsors and Friends of Pelham Summerfest including our Gold Sponsors: Ball Construction, Brock University, Fonthill Bandshell, Fonthill Dental, Halco Mobile, Lafarge Canada, McAvoy Belan & Campbell, Meridian Credit Union, Niagara Peninsula Energy, and RBC Royal Bank. And, thanks to our amazing Media Partners including: Country 89; Giant FM; MyPelham.com; Niagara This Week; Pelham News; the Standard; and the Tribune.

Finally, thanks to the more than 40,000 people – the largest number ever – who enjoyed the Seventh Annual Pelham Summerfest over the festival’s four days. Your attendance and community spirit made it a huge success and shows why it’s one of Festival Events Ontario’s Top 100 Events.

On behalf of Council, I appreciate the vision, dedication, and tremendous work by so many volunteers and staff to celebrate our vibrant, creative, and caring community. Thank you and congratulations on a resounding and overwhelming success!

You may contact Mayor Dave at mayordave@pelham.ca or read past columns at www.pelhammayordave.blogspot.ca.

Mayors Meetings

A member of the community has recently raised questions about a June meeting of some of Niagara's Mayors and Chief Administrative Officers (CAOs).

The CAOs, the Treasurers, the Planners, the Public Works officials and other Staff of the local area municipalities and the Region meet periodically to share ideas, best practices, and discuss opportunities for working together better.

I recall three times in the last 6 years where the Mayors and CAOs met. Once at City Hall in St. Catharines and hosted by former Mayor McMullan (prior to 2014); once in Niagara on the Lake at White Oaks about 7 months ago; and recently at the Town Hall in Fort Erie. (Please note that I did not host or call the meeting, as one suggested.)

As the notes of the last meeting show, the discussions are about ways in which we can work more collaboratively together. (Please click here to review the notes from that June meeting.)

For example, when the City of Welland CAO reiterated the public presentation he recently made about Regional Development Charges, the direction of the discussion with the Mayors and CAOs was about the impact on local area municipalities.

Then, it was the Regional Economic Development Officer who presented information about the Community Improvement Plans and the Region’s hope of working with the municipalities for more collaboration. It is noteworthy that this discussion was initiated by the Region to further something called “Team Niagara” – better collaboration across Niagara.

Next were discussions regarding Intermunicipal Transit and Airports. Again, joint areas of interest.

Then there was an important discussion regarding shared services and administration. The CAOs are working on increasing ways for the Cities and Towns to share specific services to find efficiencies and work together. These could reduce costs – because of economies of scale – or help with economic development across Niagara. Some examples were cited. I suggested that the CAOs make recommendations to local Councils for the various areas in which we might work closer together.

Finally, since my elected colleagues had already heard me at the Region address Pelham Council’s jurisdictional concerns of Regional Council getting involved in the affairs of Niagara’s Cities and Towns, the Town’s CAO addressed this jurisdictional concern from an administration perspective to other CAOs.

The Niagara Mayors have met occasionally, on our own, through the years. I understood from former Mayor Goulbourne (Welland) that the Mayors met often during the 2003-06 term. I understand that during the 1997-2000 and 2000-03 terms there were meetings of the Mayors.

The Southern Mayors (Pelham, Welland, Port Colborne, Wainfleet, Fort Erie, Niagara Falls) have gotten together more frequently recently – 2-3 times per year – to plan our joint presentations to the joint Chambers of Commerce.

The Mayors of Welland, St. Catharines, and Niagara Falls and the Regional Chair and CAOs have met extensively (every 3 or 6 weeks) over the last year-and-a-half to help coordinate efforts on Intermunicipal Transit.

People expect Niagara’s Cities, Towns, and Townships to share best practices, the find efficiencies, and to work together. These types of meetings should continue to help all to meet those goals.

“Ahead of schedule and under budget”

A couple of weeks ago, Bill Gibson, Chair of the Pelham Community Centre Oversight Committee, presented an upbeat update to Council.

Looking East into Accipiter Arena (from second floor)

You will recall that Council addressed suggestions from the public for proper project supervision by establishing Community Centre Oversight Committee. The committee includes two community members, one Council rep, and the Chief Administrative Officer. This committee works to ensure that the Town receives value-for-money in every aspect of the project, the project gets delivered on time and on budget, and to provide the community with consistent and timely updates.

Mr. Gibson provided updates on the two tender packages, project milestones, and finances.

The first tender package included pre-grading site work, building excavating, site servicing, foundation, structural steel, elevator and stairwell shafts, sprinkler system, roof deck, and hollow core slabs. Tender package two covered the concrete floors, reinforced steel (for masonry and slabs), interior/exterior masonry, spray insulation, roofing, insulated metal siding, zinc paneling, metal doors and frames, finish hardware, glazing, drywall/acoustics, dash boards, and seating. These two tender packages account for 77% of the total project.

Atrium Lobby (facing South)

Working as the construction manager, Ball Construction did not just tender the entire project. Rather Ball works with the committee, the architect, and the various contractors to manage the project’s timing and construction.

The presentation indicated that this value engineering process, led by Ball Construction, and the work of the committee, “has resulted in a project that, as of this date, has in excess of 75 percent of all sub contracts awarded (including work completed) which results in the project being ahead of schedule and under budget, including the 9,000 square feet of additional space.”

The presentation made clear that it was Ball Construction that suggested adding 9,000 square feet to the community centre in June 2016 to increase accessibility in hallways, common areas, and areas with heavy foot-traffic. They based this recommendation on their experience building more than 30 recreational / community centres in Ontario. Because it was so early in the process, the architect changed the plans well before issuing final drawings. Further, Ball signed on to the $32.5 million construction price cap in September 2016 – which includes these changes. Finally, since Ball tendered the project with these improvements, there will be no additional costs to improve the Centre.

Activity Centre (double gymnasium) looking South

The work is on target to enclose the building by the end of December, and for the project to be “substantially complete” by June 2018.

This construction update, the recent fundraising announcement – “Thanks a Million, Pelham” – and the recent signing of 5-year, binding agreements with major user groups demonstrates great progress!

Council and I look forward to the Pelham Community Centre becoming the place for residents of all ages to gather and enjoy a wide-variety of recreational, social, health and community activities for many, many years.

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Accipiter Arena - July 2017

Duliban Insurance Arena & Walker Industries Viewing Galleria - July 2017

Activity Centre (double gymnasiums) - July 2017

Dr. Gary & Mall Accursi Multipurpose Area - July 2017

To see recent videos and pictures the Pelham Community Centre construction process, please visit www.pelhammayordave.blogspot.ca. You may contact Mayor Dave at mayordave@pelham.ca.

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14 July 2017 Correction: The initial post cited Mr. Bill Gibson as Bob. I apologize to Bill for the error, but greatly thank him for his service as Chair! D

Happy Canada 150, Pelham!

Happy Canada 150!

Saturday became our opportunity to celebrate being Canadian and to celebrate our great nation’s special birthday! But we also took the opportunity to celebrate and to appreciate all wonderful features about our Town.

Our Town parade showcased many of the elements that make our community special – from the commitment of the Pelham Fire Service, to our numerous sport teams, to our dedicated volunteers, to our many devoted service clubs.

We live in a peaceful, safe community with great schools, and many recreation opportunities. We enjoy clean water, wonderful libraries, and a great mix of fully-accessible neighbourhood and community parks.

We appreciate our dedicated police service, devoted volunteer firefighters, and expert emergency personnel who protect you and I from harm. We have fair access to good and affordable healthcare.

And, as we marked Canada Day, we also embraced our history and our collective individuality.

After surveying where the ancestors of more than 150 Pelham residents were in 1867, the Historical Society unveiled “Pelham Roots Go Deep” display. The display graphically shows – with locations as the roots of the Comfort Maple – the multitude of countries and areas that make up our past.

We also unveiled Pelham’s 150 Mosaic Mural – a combination of more than 400 individual tiles painted by residents of all ages and skill levels and signifying an important element of Pelham or themselves. Artists Lewis & Paul Lavoie and Phil Alain then rearranged the tiles to depict the Comfort Maple. This art work will be displayed in the new Pelham Community Centre next year. (To see the mural, please click here.)

Thanks to the many contributions to make Canada Day in Pelham so special!

Thanks to the Rotary Club of Fonthill & District for the free children’s activities; to the Fonthill Lions & Lioness Clubs for great food – including poutine; to members of Niagara Regional Police Service who directed traffic; to St. John Ambulance who were at the ready to help as needed; to Kirk on the Hill and AK Wigg School and Pelham Evangelical Friends Church for parade logistics. We also deeply appreciate our many generous sponsors, including Heritage Canada; Fonthill Volunteer Firefighters Association (for donation to the amazing fireworks); Niagara Peninsula Energy; Sawmill Golf Course; and Sobey’s Fonthill (for the delicious Canada Day cake).

Finally, thanks to the Canada Day organizing committee, including Fred Arbour, Rhys Evans, Marylou Hilliard, Sue Kicul, Bill King, Steve Pellerin, and Lance Wiebe, and to Town recreation and public works staff for all logistics.

As you and your family and friends continue to commemorate our country’s 150th Birthday, let us celebrate, and let us be thankful for our Town of Pelham and for our great nation. Happy 150 Canada!

Please read past columns at www.pelhammayordave.blogspot.ca and contact Mayor Dave at mayordave@pelham.ca.