July 21, 2017…

July 21, 2017

Joshua McCann, Senior Policy Analyst
Ministry of Economic Development, Employment and Infrastructure
Infrastructure Policy Division
Inter-Governmental Policy Branch
Municipal Infrastructure Policy
Unit 900 Bay Street, Floor 5 Mowat Block
Toronto ON
M7A 1C2

Re:EBR REGISTRY NO. 013-0551 – PROPOSED ASSET MANAGEMENT PLAN REGULATION

The Municipality of Bayham thanks the Ministry of Economic Development, Employment and Infrastructure (the Ministry) for the opportunity to comment on the Proposed Asset Management Plan Regulation.

The key issues and questions the Council of the Corporation of the Municipality of Bayham raise with the Ministry, pertaining to the proposed asset management regulation, would be as follows:

1)Intentions of the Proposed Asset Management Plan Regulation

It appears the Province is attempting to legislate municipal asset related decision making in an attempt to close the infrastructure gap as presented by AMO. AMO recently launched the Local Share Action Plan:

As the front line order of government, Ontario’s municipal governments, deserve the means to provide for communities and deliver a bright future for all Ontarian. Right now, that’s a challenge. Costs are growing, and infrastructure needs are critical. Yet municipal governments lack the tools and authority to secure a stable financial future for our communities.

AMO has spent two years tackling this challenge, dubbed “What’s Next Ontario.” We have conducted two years of in-depth financial analysis and outreach, including dozens of meetings with hundreds of elected officials.

We are now seeking member input on a proposal we’re calling the Local Share, a new 1% sales tax dedicated to help fund critical local services like roads, bridges and transit. The goal is to reduce the pressure on property tax increases and provide municipal governments with a more diverse source of revenues that can help us build stronger communities.

With the focus of the proposed asset management plan regulation on levels of service, an argument can be made the Province is attempting to make municipalities have a frank conversation about the infrastructure gap by legislating municipalities to fit available funding to asset inventory and service levels. The Infrastructure gap is based on asset inventory and service levels. Smaller asset inventories and lower service levels equate to less of an infrastructure gap which weakens the AMO argument for more upper level of government infrastructure funds. The above does not consider that Municipal governments own nearly 60% of Canada’s core public infrastructure and do not have adequate funding sources to maintain and rehabilitate the same.

2)Direct Financial Impact

The regulation is likely to require almost all municipal governments to significantly re-do their current asset management plans to include: new current and future service level analysis and planning for the performance of their assets; greenhouse gas mitigation efforts, electricity costs, non-infrastructure solutions and; approval of plans by a licensed engineer prior to submission to council. At a minimum every five (5) years the proposed regulation will add $50,000 to the Municipality of Bayham Capital Budget. These are funds that will be reallocated from funding tangible assets to comply with the proposed regulation. The estimated number does not include indirect costs associated with the proposed regulation and the reallocation of staff time from other necessary projects or the impact of the same.

For context $50,000 in the Municipality of Bayham is over 1% on the Municipal levy or the equivalent of placing 4 inches of gravel on 3 kilometres of road or paving 1 kilometre of road.

This regulation, if implemented, should be fully funded by the Province so municipal infrastructure is not adversely affected by the same.

3)Reporting Burden

In 2016 AMCTO released a new research paper, Bearing the Burden: An Overview of Municipal Reporting to the Province. For years municipalities in Ontario have been straining under the range of reporting that they are required to submit to the province. This paper provides an overview of the municipal reporting burden in Ontario. Its goal is to provoke a conversation about how to reimagine the reporting relationship between municipalities and the province. Key findings of the reporting include: i.Reporting negatively impacts service delivery and prevents municipalities from innovating and preparing for the future ii.Reporting is excessive and onerous iii.The purpose of reporting is often unclear iv.Municipal-provincial reporting is highly fragmented v.Municipalities think reporting is important

The Municipality of Bayham was a participant in the Bearing the Burden Report and staff would comment the Municipality already submits information pertaining to municipal infrastructure as follows to the Province: i.Annual Audited Financial Statements; ii.Ministry of Municipal Affairs – Financial Information Returns; iii.Ministry of Energy's Energy Consumption and Greenhouse Gas Emission Reporting

- Ontario Regulation 397/11; iv.AMO Gas Tax Reporting; v.OCIF Funding Reporting.

The proposed regulation and Ministry staff comment during the June 27, 2017 webinar on the proposed regulation appears to only gather information for Provincial purposes and does not include data utility. Further it appears the initial outlined reporting is only the first step in a larger reporting regime to be implemented by the Province once the proposed regulation is in force and effect.

CONCLUSION

Section 2 of the Municipal Act, 2001, S.O. 2001, c. 25, as amended, states:

Municipalities are created by the Province of Ontario to be responsible and accountable governments with respect to matters within their jurisdiction and each municipality is given powers and duties under this Act and many other Acts for the purpose of providing good government with respect to those matters.

This proposed regulation has a substantial direct financial impact, adds to the municipal reporting burden and has intents that are not reflective of recognizing municipalities as ‘responsible and accountable governments with respect to matters within their jurisdiction’.

Staff would respectfully propose that if some municipalities are not utilizing asset management effectively the Province establish support programs be put into place to assist those municipalities instead of a regulation that would negatively affect municipal infrastructure capabilities across the sector.

Should additional information be required, please do not hesitate to contact the undersigned.

Regards,

Paul Shipway
CAO|Clerk pshipway@bayham.on.ca

[Original Comment ID: 210195]