Who shoulders the brunt of costs when it comes to shared services within the County of Simcoe has created a bit of tension in the council chambers.
During Tuesday’s budget conversation, Barrie Mayor Alex Nuttall asked county staff to explain how the current capital funding agreement for both Barrie and Orillia is currently structured. They are both separated cities, but share in several key services led by the county.
“My understanding is when there are capital items that fall within the purview that the City of Barrie is part of, there is an agreement that exists between the county and the city (related to) the capital projects (and) the City of Barrie funds them over a 10-year period," he said. "That was put in place to stop the spikes of one year you’ve got a $30-million ask and the next year you’ve got zero. I completely understand and agree.
"My question is, when it comes to the building in Orillia for affordable housing (and Barrie’s) capital contribution to that, how is that estimated? When the county looks at debentures and they go and issue debt for Orillia, in this case … what is the standard policy for the county in terms of your debt ceiling and what percentage of the capital works will be debt?” he asked.
The existing agreement between the County of Simcoe and the two cities — which, according to county staff, expired last year and has yet to be replaced with a new agreement — is based upon the shared services agreement that has been in place. County officials say they are still working under that agreement until a new one is in place.
“The cities requested at that time that we defer changing the agreement until the value-for-services audit was completed,” said Trevor Wilcox, the county's general manager of corporate performance.
Any major facility capital is pulled together into a pool and the county then calculates a 10-year payback, Wilcox added. That amount is funded by the county and is then is allocated over the next decade and added on each year to the capital program.
"What you just heard was that the City of Orillia and City of Barrie pay for these projects over 10 years, but the rest of you pay for them over the life of the debenture," Nuttall said. "Which could be 25 years or could be 30 years.
"Every time there’s a capital pull on the City of Barrie, our amortization period is 10 years and your amortization period is whatever the debenture states, meaning that when a project happens, the City of Barrie and the City of Orillia… are overcompensating the bills of the capital projects for the areas in which we are responsible, we are demanded to pay," he added.
It’s the cities that are anteing up more money up front, Nuttall continued.
“If the true cost of it was being allocated equally across the county’s municipalities and the cities, your capital pull on your own resources would be much more significant up front," he said.
Nuttall said he believes there is an “active subsidization program” from the cities to the county that is taking place, which he says he uncovered after asking questions of his city staff.
“I see a real issue with that, because I think it’s pretty fundamental to the capital plan that is being approved and will be pretty fundamental to the capital plan going forward and all of your 10-year plans," he said. "As far I can see, it doesn’t ring very fair at the moment."
Nutall's remarks didn’t sit too well with Wasaga Beach Mayor Brian Smith, who said he believes it’s the other way around, suggesting the county actually dig into the matter deeper.
“It's high time that we do a fulsome look into the separated cities and how our services work with respect to the separated cities, because I would argue that the county on the whole subsidizes, in my opinion, the separated cities," Smith said. "We receive no DCs (development charges), no taxes, unless it's something that the separated cities are wanting services for, such as paramedic services for example.
“I hear exactly what Mayor Nutall is talking about … I don’t agree, but I do agree we need to have a real good look at this," he added. "At the end of the day … the fact this is coming to light here today means it’s high time we look at all services and that agreement and exactly who is subsidizing who.”
Wilcox said to characterize it as “some kind of deposit or funding mechanism” and implying that the county is taking advantage of the cities was “inappropriate,” adding the allocation of capital funds was based upon the shared services agreement previously in place.
The Barrie mayor called out what he considered to be a “point of order."
"It would be uncharacteristic, (in) the debate that would happen in the City of Barrie, for a member of staff to comment on appropriateness or inappropriateness of a member of committee or council to say something in the meeting," Nuttall said.
The chair of the meeting said the point was taken and Wilcox continued to discuss the shared services agreement.
"The members of the agreement wanted to be able to control their piece in their appropriate way," Wilcox said.
Smith put forward a motion directing staff to report on the asset and service mix between the county and the separated cities, which Nuttall said would be supported by the City of Barrie.
“If the members of the committee would like to go down that road, they would have the support from the members of the City of Barrie to do so," Nuttall said. "It’s not really an opinion piece. It’s math and, at the end of the day, the numbers will bear what they bear. That will determine where things actually lie."
Nuttall said the accounting will tell a "fulsome story."
“In any other world, if we were partnering on a project, the reality is I would put in my portion, you would put in your portion and it would be netted out prior to going and getting debt to help build the rest of the building," he said. "That’s just not what is happening here."
