Arnprior town treasurer Jennifer Morawiec presented a report to council Jan. 28 detailing efforts to bring some order to the town's finances.
It was a mess.
Even councillors expecting to hear bad news about the Town of Arnprior’s financial practices were startled by the depth of the problems and the amount of money involved.
In a report to council Monday, town treasurer Jennifer Morawiec outlined a litany of woes and the steps being taken to get the town’s finances back on track.
One of the more startling revelations was the fact the Town had not received $1.6 million in Ontario Municipal Partnership Funding because of a delay in submitting its 2010 and 2011 applications. The reports were issued by the new administration in late October and the money was received in December.
It was the biggest chunk of the $1.85 million recouped by the town in the last few months, with $400,000 still to come in from the first $2.25 million owing targeted by administration. Morawiec is anticipating $400,000 will be received soon, now that the town’s 2011 county and school tax reconciliations have been completed.
So the town has made “huge, huge steps,” said CAO Michael Wildman, noting that tackling financial issues to bring openness transparency and efficiency to the processes was his number one priority when hired in August.
Some of problems have been “festering” since the 1980s, he said.
Morawiec reported the problems found in the four months she has been on the job included such things as significant delays and backlogs in required tasks, failure to act on tax and water bill collections, inadequate documentation, outdated policies, and failure to address software glitches. Bank reconciliations were 18 months behind, but have been brought up-to-date thanks to help from temporary staff.
Money owing the town increased by $180,000 from 2011 to 2012, so administration is taking steps to reverse the trend.
The financial report is a key element in the new administration’s efforts, on behest of council, to overhaul the way things are done at town hall. The changes, outlined in the strategic plan approved Jan. 14 (see Page 6), also include new water billing and procurement policies and an overhaul of council’s advisory committee system
“We knew we had issues,” said Mayor David Reid. “But this is more than we anticipated.”
He said it has taken time for the council elected in 2010 to get a handle on the situation, but with a new CAO, treasurer and deputy treasurer in place and more new officials on the way, “I’m very confident we’ll be able to turn this around … this is a good start (see his full statement on Page 8).”
Reeve Walter Stack said he is not surprised there were problems, but said it is disturbing that there are so many issues involving millions of dollars. Calling it a “reflection on the past administration,” he said the financial troubles are a burden on all the town’s taxpayers who are paying their fair share.
Stack suggested council look at a zero-based budget process this year, to ensure all items are justified. “We need to get a handle on where we are,” he said.
Coun. Lynn Grinstead said that while she expected some problems, “this is far beyond the realm of what I expected.”
In response to her question as to what type of accounts are behind, Morawiec said it is in a large number of areas from property taxes and water bills to miscellaneous items.
But if you owe the town money, look out.
She explained that the town is putting in new collection policies and best practice methods in attempt to collect as much of the money owing as possible. “Finance staff will continue to pursue collections to the fullest extent possible, and will investigate measures to prevent recurrences of a similar nature,” her report said.
As of Dec. 31, an unaudited report indicates the town’s accounts receivable balance is close to $4 million. That includes $2.3 million in property taxation, $1.1 million in water/wastewater bills, $252,000 in general accounts and $125,000 to the Nick Smith Centre. When asked about the latter, Morawiec explained that the money is owing to pay for ice time and other services.
Reid said that some people get into arrears on no fault of their own, so the town needs to work with them on payment plans. But for some delinquents, there is no good reason and not making them pay up is unfair to the rest of the citizens, he said.
“If we don’t collect (from them), we have to get it from the people who are already paying their taxes.”
That’s why it’s “very important” that the changes be implemented as soon as possible, he said, praising staff for the progress made over the past few months.
Morawiec reported that while a number of the improvements will take significant time to see full resolution, progress has been made in “re-engineering” the finance department and several initiatives are well under way to establish proper procedures, address outstanding items and find efficiencies.
As for the effort to collect money owed the town, memos will be issued in February to all parties with outstanding balances notifying them that penalties and interest will begin to accrue and some may be forwarded to collection agencies.
Where possible, accounts receivable are being added to the tax roll.
The town has issued letters threatening to put 16 properties up for tax sale as their taxes are more than three years in arrears. The properties account for almost $1.5 million or 64 per cent of the $2.3 million in outstanding taxes. The town will also relook at past failed tax sale efforts to see if the process can be revived.
A new water and wastewater billing and collection policy will help the town finally get that touchy area under control by cracking down on long-term delinquents. The policy sets out collection procedures, clear payment timelines, steps to disconnect the water supply, and disconnection and reconnection frees.
A letter will be sent out to all property owners in the February tax bill reminding them of their payment responsibilities and the town is compiling a list of outstanding accounts that administration feels will need bailiff services to collect.
The town will also work with property-owners receiving leak adjustments to determine what steps are needed to fix the problem.
Morawiec reported that all outstanding Manulife bills have been issued and where needed payment plans set up. “So all our retirees are looked after,” asked Coun. Dan Lynch, who was answered in the affirmative.
The parks and recreation department has made a new hire so it can better arrange staff schedules, so to become are compliant with the province’s Employment Standards Act.
Some staff have not been properly applying the town’s overtime policy, which has been clarified. However, the administration is seeking a legal opinion before taking any corrective measures.
Staff issued about $233,000 payment-in-lieu-of-taxes notices in the last two months of 2012 and Morawiec said she is happy to report that $226,000 has been received.
The new deputy treasurer is streamlining the town’s accounting system and is arranging for more training for staff.
The administration is also planning to improve and streamline polices and practices regarding reserve funds, the gas tax and property registration. It has also recommended significant revisions to the town’s procurement policy, which was discussed later in council’s meeting Monday and will be up for a final vote Feb. 11.